Prior studies have shown that millennials are better than previous generations at saving for retirement and even putting money away for their children’s education. As this generation begins to purchase homes and start families, as well as care for their aging parents, they are planning for the future in an impressive way.
A recent study conducted by Trust & Will analyzed how nearly 23,000 millennials engaged in the estate planning process and surveyed 323 about their plans for the future. The study involved only people who created an estate plan with Trust & Will during 2021, so there is some bias, but its findings are still interesting and provide some good insight into what millennials are thinking about in terms of their financial futures.
1. What Estate Planning Products Are Millennials Choosing?
The vast majority of people included in the Trust & Will study chose to complete an estate plan that uses a will. In fact, 75 percent of millennials opted for a will as their estate plan. This plan fits the needs of many people by allowing them to distribute assets efficiently and appoint guardians for both children and pets. Furthermore, a will makes it easy to identify healthcare wishes and outline final arrangements.
However, 19 percent of millennials in the study chose to create a trust, which provides more control over how assets are managed both during your lifetime and after you die. Another important point from the study is the fact that it is not just wealthy millennials who are engaging in estate planning. Of all the people included, only 16 percent had a net worth greater than $1 million.
2. Why Are Millennials Creating Estate Plans Now?
Another important and interesting finding from the study was the reason that prompted millennials to begin estate planning. While this generation is getting older, millennials are still between their late 20s and early 40s and most are many decades away from end of life.
In 2020, the pandemic prompted people to begin thinking about the unexpected. Millennials felt like they needed to get their wishes down on paper just in case because the world was confronting mortality in an entirely new way.
Moving into 2021 when people were more used to the pandemic, the reasons for estate planning became more personal. More than a third of people in the study cited having a child as the motivation for estate planning. Other reasons included purchasing a home, experiencing a death in the family, and having an increase in income.
3. Who Are Millennials Including in Their Estate Plans?
According to the study, millennials also have a shifting idea of what constitutes family. While the majority of people appoint blood relatives to serve as guardians for a child or pet, or to act as trustee, executor, or beneficiary, nearly a quarter of people included someone who was not related by blood.
Moreover, pets have become a part of the family more than ever. Perhaps surprisingly, more than half of people included in the study said that they had a pet. Of the people who responded that they had a pet, nearly 80 percent of them chose to designate someone to act as guardian of the pet in the event of their death.
4. How Do Millennials Want to Be Cared for at End of Life?
Many millennials are also already thinking about their wishes for the end of life. Nearly 40 percent of the people included in the study chose to complete documents related to healthcare choices at end of life. These documents make it much easier for loved ones to make decisions in moments of high stress by outlining exactly what you would want in certain circumstances.
Altogether, 57 percent of those millennials who completed documentation said they would only want care “where benefits would clearly outweigh burdens” and only 35 percent said they wanted to receive “any care that would improve their condition.” Interestingly, only 18 percent of people said they would receive “care in all cases.” Also, more than 80 percent of people included said that they would like to donate their organs.
5. What Causes Are Millennials Choosing to Support in Estate Plans?
For the most part, millennials engaged in estate planning to ensure that their loved ones are cared for after they die. However, millennials are also already choosing to leave part of their estate to various causes. Of those included in the study, 9 percent chose to establish a bequeath, which is impressive considering the age of this generation.
Also, no correlation existed between net worth and the decision to leave a bequest. People of a wide variety of income levels included donations as part of the estate plan. While many different charities were identified, there were a few that were more common than others. Some of the most commonly-identified charities included Planned Parenthood, The Trevor Project, Girl Scouts of the USA, and St. Jude’s Children’s Research Hospital.