Q. My daughter, Abby, is 30 and newly married. Similar to many of her friends, Abby and her husband decided to do their estate planning because the coronavirus got them thinking about their mortality. It got me and my husband, who are baby boomers, to thinking too. What are some of the things people of different generations care most about when it comes to estate planning?A. Congrats to your daughter and her husband on their nuptials and for taking the important step of getting their estate planning documents in order!
In the past, for many Gen Xers and Millennials, estate planning may have been the last thing on their mind. That was until the pandemic forced us to take a look at our mortality, get our priorities straight, and plan for the unexpected. In fact, since the beginning of the COVID-19 pandemic, the volume of younger individuals seeking estate planning solutions has more than doubled as the realization of the impact of the virus has come to a head.
What Millennials Believe to Be Most Important When It Comes to Estate Planning
You asked what different generations see as most important when it comes to estate planning. A recent study examined millennials’ preferences for estate planning.
These are some findings from the study, which evaluated the preferences of 20,000 millennials who completed estate planning documents:
• More than three quarters (78%) set up a will in 2020;
• Nearly a quarter of millennials cited “2020/The Pandemic” as the primary reason for creating an estate plan;
• Most millennials created an estate plan after the birth of a child (38%);
• Nearly all (78%) of millennial pet owners appointed a guardian for their pets;
• Millennials who selected to bequest a gift to charity most frequently chose St. Jude’s Children Research Hospital, Planned Parenthood, and the ASPCA as beneficiaries.
Millennials are Planning for End-of-Life Also
The study mentioned above also explored end-of-life planning. Over a quarter (26%) of millennials specified they want to donate their organs. The most common option for body disposal after death was cremation (47%), followed by a traditional burial (25%). More than a third of millennials (35%) prefer a celebration of life ceremony over a traditional funeral. Millennials also included specific song requests for memorials, including various artists such as Whitney Houston, Bob Dylan, and Jack Johnson.
Gen Xers are Planning for Their Digital Afterlife
As Gen Xers enter into their 40s and 50s, they are of course paying close attention to finances, investments, insurance policies, legal documents, living arrangements, and healthcare. As their children are growing up, they are establishing goals for their retirement and legacy planning while ensuring the steps they take lead them to retirement success.
When organizing their affairs, Gen Xers have a vast array of issues to contemplate. Estate planning today often includes protection of one’s assets from the potential claims of creditors as well as personal income tax planning. Advancements in technology and the emergence of digital assets also need to be considered.
Besides planning for their loved ones, their retirement, and what would happen if they become incapacitated, these are some of the key planning issues that Gen Xers are considering today:
• A virtual afterlife. Social media has significantly changed the way we live and communicate with others. Many people take great care to control their image on social media sites such as Facebook, Twitter, Instagram, and LinkedIn. Because of this, deciding who should have access to your social media accounts after death is an increasingly sensitive and significant issue. As more information is stored on the Internet, Gen Xers are contemplating their “virtual afterlife” and including a plan detailing who should have access to what information.
• Digital assets. In addition to information stored on a personal computer or “in the cloud,” such as pictures, videos, or music, “digital assets” include e-mail accounts, domain names, account registrations and bitcoins, to name a few items. In the past, a person had only to check the mail to find the assets in a deceased relative’s estate. But as banking and bill payments have become virtual, it has become increasingly difficult for executors to determine the extent of a person’s assets after he or she dies. This needs to be planned for and passwords need to be accessible with access to accounts designated in estate planning documents.
Baby Boomers Have Other Priorities
Baby Boomers represent about 22% of today’s population. Born between 1946-1964, baby boomers are quickly approaching retirement age. In fact, with 76 million boomers on the cusp of retirement, the idea of estate planning is more important than ever.
For baby boomers, estate planning does more than pass money and possessions along to their millennial and Gen X children, estate planning will also protect their lifestyles. Estate planning shapes their end-of-life care and who can make decisions on their behalf.
As Boomers enter their 60s and 70s, they are more focused than ever before on managing their family legacies. The 2018 U.S. Trust Insights on Wealth and Worth Study found that 67% of individuals over age 50 want to use their wealth to invest in their children and grandchildren. Further, many are doing more for their children than their own parents did for them. Boomers who have managed their finances in an organized manner want to be sure that their intent and hard work don’t go to waste.
Besides planning for loved ones, baby boomers have grown accustomed to a certain lifestyle. In addition to protecting and transferring wealth, estate planning will ensure that boomers are able to maintain the lifestyles they’ve created for themselves. While what to do with your financial assets is a major part of estate planning, it is not the only thing you need to consider. Estate planning for boomers often includes:
• What to do with family keepsakes: Family keepsakes can be a big deal and can sometimes lead to more fighting and arguments among family members than financial inheritances.
• Long-term health care needs: Longer lives and rising health care costs are serious concerns when you are putting together your estate plan. Planning for nursing home expenses will ensure that you are cared for in your golden years, without depleting a lifetime of savings.
• Special needs planning: If you have children or a relative with a disability or special needs, specific plans for care are necessary for your estate planning to ensure that they are cared for when you can no longer do so yourself.
For more details about estate planning during every stage of life, please read our article on the topic here.
Estate Planning is Important for Everyone
We here at the Farr Law Firm have strategies in place to help all types of people at all ages to plan for themselves and their loved ones. By planning in advance, each person can retain the assets it has taken a lifetime to accumulate and the peace of mind that their family’s needs will be adequately and properly addressed. If you or members of your family have not done Incapacity Planning, Estate Planning, or Long-term Care Planning, or if a loved one is beginning to need more care than you can handle, please contact us as soon as possible to make an appointment for an initial consultation:
Estate Planning Fairfax: 703-691-1888
Estate Planning Fredericksburg: 540-479-1435
Estate Planning Rockville: 301-519-8041
Estate Planning DC: 202-587-2797
About Evan H Farr, CELA, CAP
