Economy hits millennials’ ability to build, transfer wealth

Ongoing economic turmoil has severely impacted millennials’ ability to build and transfer wealth, according to a new survey.

About 45% of 20,000 millennials – those born between 1981 and late 1990s – surveyed by Trust & Will, a digital estate planning platform, said that the housing crisis and rising mortgage rates had prevented them from buying property, and conditions will affect their ability to pass on their wealth.

“The past year has been tumultuous for many, and we’re seeing the effects on millennial mindsets when it comes to estate planning.”Cody Barbo, founde and CEO, Trust & Will.

“The past year has been tumultuous for many, and we’re seeing the effects on millennial mindsets when it comes to estate planning,” said Cody Barbo, founder, and CEO of Trust & Will. "However, we also are seeing a shift in this generation’s ability to overcome financial obstacles and stay true to the things that mean the most to them, like giving to charity or reducing carbon through eco-friendly burials. Even in times of great uncertainty and fear, millennials are taking control of their financial futures by creating estate plans at a higher rate than any other generation.”

Indeed, 78% of millennials said that building multigenerational wealth is important to them, compared to only 45% of older generations that said it wasn't important. Over half of those surveyed said they expect to receive an inheritance in their lifetime, but only 11.5% said they rely on one as part of their financial planning.

The oldest millennials are now entering their forties, and many are facing economic challenges like inflation and increased housing prices. In fact, nearly 70% of those surveyed said they were looking at their finances more closely because of recent economic turmoil. Many are also looking seriously at end-of-life plans as some are caregivers for both minor children and aging parents. Having a child, in fact, was far and away the primary reason millennials began estate planning, the survey said.

Millennials prioritize legacies

All of the current anxieties have not prevented millennials from making crucial decisions about their legacies, despite their relatively young age, the survey found.

“After all, the generation is primed to plan and adjust, having spent their formative years during other major upheavals, such as 9/11 and the 2008 recession,” it said.

The millennial generation, also called Gen-Y, show surprisingly high pet ownership, with nearly 20% more likely to have pets than other age groups. “And millennials treat pets like family members,” the survey concluded. “Ensuring their well-being: 71% of the pet owners…assigned a guardian for their animal in their estate plan.”

Charitable giving also a priority

Charitable giving is also a high priority for millennials. While nearly 10% designated a charity in their estate plan, a whopping 67% of those with net worths of $50,000 or less, and 25% of those with net worths between $50,000 and $125,000, chose to do so. Planned Parenthood was the most popular charity, followed by St Jude Children’s Research Hospital and The Trevor Project, which provides crisis support for LGBTQ youth.

“In fact, our data show that the lower your net worth, the more likely you are to leave a portion of your assets to a cause,” the survey said.

Founded in 2017, Trust & Will offers a modern estate planning approach with simplified online support to help people through the process. The company, based in San Diego, claims more than 250,000 completed will or trusts, and partnerships with MassMutual, Charles Schwab, Fifth Third Bank, Mint.com, Acorns, and others.

The company analyzed proprietary data from 23,979 of their customers, 7,832 of whom were aged 25-44, to obtain specific insights and behaviors of the millennial generation about estate planning.

 

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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