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Financial Planning > Trusts and Estates > Estate Planning

Demand for Estate Planning Booms Among Millennials

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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.

According to the study, the pandemic and work-from-home policies spurred many families to adopt a pet. More than half of millennials in the sample have a pet, and 77% of pet owners have designated someone to act as a pet guardian.

The study suggested that millennials are steering away from tradition to create modern, personalized legacies. On average, millennials now list seven people in their estate plans. 

Moreover, their closest circle may not include blood relatives. Twenty-four percent of those surveyed said they had chosen a non-family member as a guardian for their children or pets or to act as an executor, trustee or beneficiary. 

The study also revealed trends in end-of-life planning. Some 40% of participants said they had completed their health documents, including a HIPAA authorization form, and 57% had elected to receive care only if benefits outweigh the burdens.

Millennials appear to be moving away from traditional end-of-life arrangements. Forty-eight percent said they want their body to be cremated, while only a quarter opted for a conventional burial. Eight percent want their body to be donated to science. 

The millennial generation is passionate about causes that matter to them and donating to nonprofit organizations, according to the study. As in last year’s study, the top charities for bequests are St. Jude Children’s Research Hospital, Planned Parenthood and Girl Scouts. 

This year’s study found an increase in planned gifts to The Trevor Project, which provides crisis support for LGBTQ+ teens.

(Photo: Shutterstock)