With 2020 being one of the most unprecedented years in history — a global pandemic, a presidential election, and a battle for social justice — both Americans and American businesses have been impacted in a number of ways. So we examined the estate planning industry to discover whether or not Covid 19 and today’s political climate has affected consumer behavior, specifically that of millennials.
Has Covid-19 caused millennials to prioritize creating their Wills or Trusts at a higher rate due to the uncertainty surrounding their health? Have millennials chosen to leave gifts to charities they care about due to the social change taking place? Does a millennial’s political affiliation have an impact on their estate planning choices? How are millennials planning for their end-of-life? Based on research conducted by Caring.com, we know that over 60% of Americans do not have a Will in place. But are current events reducing that number and impacting other areas of the Estate Planning industry? To answer these questions and uncover the “why” behind millennial behavior and decisions relating to Estate Plan preparation, we analyzed data from nearly 20,000 individuals aged 25 to 40 who reported creating their Wills or Trusts in 2020.
What Estate Planning Documents are Millennials Choosing and Why?
Not surprisingly, the most commonly completed Estate Planning document among millennials surveyed was a Will — 78% of millennials completed a Will-based Estate Plan compared to 16% who opted for a Trust and 6% who sought only an Appointment of Guardianship.
This makes sense for several reasons: for one, Wills are arguably the most well-known estate planning document. Not only does a Will allow people to distribute their assets and specify their final arrangements, Wills also allow people to appoint guardians for their minor children. And since the majority of millennials surveyed (75%) reported having children, it’s logical that they opted for more Will-Based Estate Plans. (A large majority of pet parents also appointed guardians for their furry friends!)
So what are some other reasons millennials are choosing to prioritize their estate planning now more than ever (other than to appoint guardians for their children and pets?)
While “having a child” was the number one reason the respondents said they decided to create their estate plans (37%), “2020” or “The Pandemic” came in second with 17%. This suggests that the unrest experienced in 2020 was a substantial trigger for millennials to consider their end-of-life and Estate Planning. “Buying a home” and “marriage or divorce” were further down the list of reasons at only 6% respectively, behind “general life planning” (13%).
Where does The Studied Millennial Cohort Live?
The cohort of millennials surveyed for this study included individuals from all 50 states. We did this to answer the questions: does a millennial’s location have any impact on their estate planning document choices. The answer: yes, location played a role.
California and Texas were the two states that had the highest percentage of Trust completions.
Idaho, West Virginia and Mississippi were the states that had the highest percentage of Guardianship Appointment documents completed.
A state’s typical political affiliation also seemed to play a role in the estate planning documents of choice among millennials:
Millennials in states that tend to elect democrats at the statewide level (blue states) completed 6% more Estate Plans than millennials in states that tend to elect republicans at the statewide level (red states).
Millennials in Blue states completed 28% more Trusts than millennials in red states.
Millennials in Blue states completed only 2% more Wills than millennials in Red states.
The above data all suggests that a millennial’s location may have an impact on his or her choice of Estate Plan, particularly if he or she prefers a Trust-Based Estate Plan.
Why do Millennials Care about Estate Planning?
According to the data, some of the top reasons millennials seem to be prioritizing their estate planning is so that they can distribute their assets & designate appointments, give back to charities they care about, plan for their end of life, and specify their final arrangement wishes.
7% of those studied opted to leave a portion of their estate or a specific dollar amount to charity. The top five charities surveyed millennials left money to in 2020 were: St. Jude’s Children's Research Hospital (23%), Planned Parenthood (8%), ASPCA (6%), Girl Scouts of the USA (6%), and the American Cancer Society (4%).* There also appeared to be an increase in bequests to social justice charities. For example, 1% of millennials left money to The Black Lives Matter Foundation.
This suggests that not only do millennials care about “giving back” but also that the social unrest of 2020 likely played a role in charity bequest choices.
Also noteworthy were the final arrangement and health care related wishes requested by millennials. Some key insights include:
50% of millennials left specific directions in their Wills regarding their funerals.
38% completed their health care documents which most frequently include a HIPAA authorization form, advanced healthcare directive, and power of attorney.
26% opted to donate their organs
In addition, 50% of millennials only want to receive “extreme” medical care only if the benefits outweigh the burdens. This suggests that millennials are placing a greater importance on their quality of life.
Turning to final arrangements, the most common final resting place choice among millennials was cremation, and 8% chose to donate their bodies to science. This leads us to believe that millennials are moving away from tradition (i.e. burials, and traditional funerals).
Lastly, among those who left additional wishes in their Wills regarding final arrangements, a common request was to have specific music played at their ceremonies. Some of the top asked for songs included:
“Harvest Moon” by Neil Young
“Do You Remember” by Jack Johnson
“When I Get Where I’m Going” by Brad Paisley
“Imagine” by John Lennon
“You’re Going To Live In Me Forever” by John Mayer
“He’s Always Been Faithful” by Sarah Groves
“Daddy’s Hands” by Holly Dunn
“I Will Always Love You” by Whitney Houston
“Butterfly Kisses” by Bob Carlisle
“Top Of The World” by The Dixie Chicks
Listen to our top memorial songs playlist, here.
After analyzing data from nearly 20,000 millennials aged 25 to 40 who reported creating their Estate Plans in 2020, it’s clear that the events of 2020 (A global pandemic, election, and fight for social justice) led many millennials to create their Wills or Trusts.
We plan on revisiting this data every year to see how trends and behaviors among millennials change over time.
Our goal here at Trust & Will is to remove that uncertainty and help people prepare for the unexpected. It shouldn’t take anyone years to take action on such an important life task. That’s why our goal is to continue educating people not only on the importance of Estate Planning but also just the basics. Helping people understand things like the difference between a Trust and a Will, the probate process, what’s covered in healthcare documents, and what could happen if you pass away without a Will, gives them the tools they need to make critical decisions.
Ready to prioritize your own estate planning? Get started with us today!