What You Need to Know
- Three-fourths of respondents have a will-based estate plan, making their wishes about health care and final expenses known.
- Estate plans aren't just for the wealthiest millennials: 71% of respondents had a net worth of $500,000 or less.
- Respondents were motivated to make a plan by having a child, losing a loved one and buying a home.
Three-fourths of millennials in a new study have completed a will-based estate plan, enabling them to appoint guardians for minor children, as well as pets, and make decisions about health care wishes and final arrangements, Trust & Will, a digital estate planning platform, reported Tuesday.
Only 19% of participants opted for a trust, which helps those with more complex estates manage and distribute assets in their lifetime and after death.
Estate planning continues to see an uptick as millennials overtake baby boomers as the largest generation caring for young children and their aging parents, joining Generation X as a “sandwich generation.”
And it’s not only the wealthiest millennials who are establishing estate plans. Seventy-one percent of the study sample had a net worth of $500,000 or less, while just 16% had a net worth of more than $1 million.
“Millennials are building their own families while also caring for their aging parents amid a global health crisis, prompting more caregivers to plan for the future,” Cody Barbo, founder and chief executive of Trust & Will, said in a statement.
“Even though millennials are taking the lead on writing wills and establishing trusts to set up their families’ financial health, the majority of American adults still do not have any plan in place.”
In a proprietary study, Trust & Will analyzed data from 22,850 people 25 to 44 to explore specific insights and behaviors of the millennial generation around estate planning. The firm also surveyed 323 individuals in this cohort in November to ask them about the process of creating their estate plans.
Customized Plans Trump Traditional Ones
The study explored the reasons millennials create estate plans. Thirty-four percent said they were motivated to do so by the birth of a child. Eleven percent cited a death in the family, and 9% the purchase of a home.