Planning Through The Pressure

The Millennial Approach To Estate Planning

From financial strains to future gains– how a generation is preparing for the the unpredictable

While 62% of Millennials haven’t done any estate planning, the vast majority (81%) believe they should have a Will at this stage in their life. View the complete report here.

SAN DIEGO, April 9, 2024 /PRNewswire/ — Trust & Will, the leading digital estate planning and settlement platform in the U.S., releases the findings of its fourth annual Millennial Estate Planning Study, providing insight from nearly 15,000 Millennials on end-of-life and estate planning preferences. Amidst a tornado of economic pressures, including sky-high mortgage rates impacting home ownership goals, caring for both children and aging parents, macroeconomic uncertainty, and promises of a forthcoming ‘Great Wealth Transfer,’ millennials are planning for both their current and future lives, but also remain concerned about their ability to build and pass on wealth to future generations.

During the most demanding years of their lives, the study found that millennials prioritize work and caregiving but deprioritize the simple actions necessary to protect their assets and legacy in the future.

Key findings from Trust & Will’s 2024 Annual Study, “Planning Through the Pressure: The Millennial Approach to Estate Planning,” include:

  • An overwhelming 62% of millennials do not have a Will or Trust; more than half (56%) do not know what would happen to their assets if they died without an estate plan.
  • Even as the ‘Great Wealth Transfer’ descends upon us, a third of millennials (34%) do not know if their parents have an estate plan; 13% said they knew their parents did not have a Trust or Will.
  • Despite the predictions of the forthcoming “Great Wealth Transfer,” less than half (43%) of Millennials expect to get an inheritance in their lifetime. Out of those who do, only half say they will rely on it as part of their overall financial plan. 23% of Millennials are still not sure if they are receiving an inheritance.
  • Millennials care about their digital legacy but also value privacy. One in three said they’d prefer memorialization of their online profiles. However, 39% of millennials do not want their families to have access to their emails, direct messages, and texts after they’re gone. Comparing generations, Gen Z is even more private; 56% don’t want family members to gain shared access to their accounts after death.
  • 83% of millennial pet owners assigned a guardian specifically for their pets, a significant uptick from 71% of pet owners the year prior.
  • Charitable donations are a core part of estate planning for millennials: St. Jude’s Children’s Research was the most popular charity for bequests.

Millennials May – Or May Not – Inherit Trillions During The ‘Great Wealth Transfer’

Millennials are in a unique position as they inch closer to what experts and economists have dubbed the ‘Great Wealth Transfer,’ one of the largest transfers of assets from owners to inheritors in modern history, with an estimated $72.6 trillion expected to transfer between generations. 62% of millennials do not have a Will or Trust and, as a result, will have more barriers to a seamless transfer of wealth when the time comes. Furthermore, only 43% of millennials expect to get an inheritance in their lifetime, and out of those who do, only half say they are relying on it as part of their overall financial plan.

More than a quarter of Millennials (34%) still need to learn what their parents’ estate plans are and if they exist. Despite not knowing their parents’ specific plans, 58% of millennials disclosed that they had discussed estate planning with older generations in their family at some point, including when they were growing up. An outlier in this year’s research indicates there is an uptick in estate planning with younger generations: 33% of Gen Z already have an estate plan, catching up with older cohorts.

Despite the rapid adoption of AI, it has yet to enter the estate planning arena. When asked if they would use artificial intelligence, such as a chatbot similar to ChatGPT, to help them write a Will, perhaps unsurprisingly, the answers aligned with age: about one in three Gen Z and millennials said they were likely to use the assistance of AI, compared to only 19% of boomers.

Millennials Are Both ‘Frozen’ And ‘Sandwiched’

When it comes to millennials’ family lives and their financial planning, the picture is not a simple one. Regarding homeownership, Millennials are solidly frozen in place and locked out of the housing market: 55% said the housing crisis and interest rates have prevented them from buying property, a higher share than any other age group. Many millennials have predicted that they will never own a home, significantly affecting generational wealth transfer.

The sooner Millennials - and their parents - normalize talking about end-of-life plans, the easier it will be when the time comes...

While being locked out of homeownership, millennials simultaneously make up the largest share of the so-called “sandwich generation,” a cohort taking care of both their children and their parents: 39% of those surveyed say they have had to take on this double duty. 58% say that being part of the “sandwich generation” will affect their ability to pass on wealth.

This squeeze is unfortunate because millennials want to pass on their wealth: 74% say it is important to them to do so. Previous research has consistently shown that having kids is the main reason Millennials create estate plans. In 2023, 73% of Trust & Will’s millennial members had children.

“There is no simple story to tell regarding the unique financial situation of millennials. They want to set themselves up for success, advance in their careers, and have work-life balance, but our generation as a whole has faced significant headwinds our entire adult lives, starting with the 2008 recession, through the pandemic, and its aftermath. The headlines tell us that a ‘Great Wealth Transfer’ and inheritance is coming, but most families are still not planning for their future and having these important conversations,” said Cody Barbo, Founder and CEO of Trust & Will. “The squeeze they feel from nearly every aspect of their life has them putting off the simple planning that would codify their legacy and protect their family’s future. The sooner Millennials – and their parents – normalize talking about end-of-life plans, the easier it will be when the time comes.”

Millennials Want Their Lives To Have A Meaningful End

Millennials have strong opinions on their final arrangements. Cremation remains the most popular choice (50%), followed by traditional burial (23%). The number of millennials who prefer to donate their body to science has dropped from 13% to 8% in the last year. 41% of millennials want a memorial instead of the traditional funeral favored by previous generations. Illustrating the need for an estate plan and advanced directives, 30% of millennials expect their trustees to make end-of-life decisions on their behalf.

Many members also request specific songs for their end-of-life commemorations; the most popular funeral song requests are “What a Wonderful World” by Louis Armstrong; “Somewhere Over the Rainbow” by Israel Kamakawiwo’ole; and “Let it Be” by The Beatles.

Millennials are more likely to donate to charity, even if their net worth is relatively low. A recent Vanguard Charitable Harris Poll showed that 54% of millennials include charitable contributions in their annual budget, a 10% increase over the previous year. Millennials also designate significant sums to charity in their estate plans. The average bequest is $37,519, and the top five charities named by Trust & Will members in 2023 were St. Jude Children’s Research Hospital, Best Friends Animal Society, The Nature Conservancy, American Society for the Prevention of Cruelty for Animals (ASPCA), and Tunnel to Towers Foundation.

For the full findings and to download a copy of the report, visit here.

 

 

 

Methodology
Trust & Will analyzed proprietary data from 52,505 individuals who completed their estate plans between January 1 – December 31, 2023, 14,300 of whom were aged 25-44, to explore specific insights and behaviors of the millennial generation regarding estate planning. For general population data, Trust & Will worked with OnePoll to survey a nationally representative sample of 1,000 Americans aged 18 and older. This survey was conducted from January 17-19, 2024. Trust & Will revisits this data each year to see how millennial trends and behaviors continue to change over time.
About Trust & Will
Trust & Will is simplifying estate planning and settlement with attorney-approved, legally valid documents and processes designed to adhere to individual state guidelines. Since 2017, we’ve helped hundreds of thousands of Trust & Will members leave their legacy with an affordable way to create an estate plan or settle the estate of a loved one. Our platform uses bank-level encryption that protects customer data and complies with the highest security standards, including SOC 2 and HIPAA. Trust & Will is a certified B Corporation and is the official estate planning benefit provider for AARP members, along with several leading financial institutions, who all believe in our mission of helping every family leave their legacy. To learn more, visit trustandwill.com.