Three-fifths of millennials don't have a will or trust: Study

In the face of economic uncertainties, high mortgage rates, and caregiving responsibilities for both children and aging parents, a majority of millennials are letting their long-term need to prepare a legacy fall by the wayside, according to a new study.

Trust & Will's fourth annual study on millennial estate planning uncovers how millenials, also known as Gen Y, are managing their estate planning needs. The survey of nearly 15,000 millennials shows their struggle to balance immediate financial pressures with future preparations.

"There is no simple story to tell regarding the unique financial situation of millennials,” Cody Barbo, founder and CEO of Trust & Will, said in a statement. “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."

Despite the anticipated "Great Wealth Transfer," which expected to move about $72.6 trillion between generations, the report found a 62 percent majority of millennials said they don’t have a will or trust. Only 43 percent of millennials foresee receiving an inheritance, and of those, just half consider it in their financial strategies.

A concerning one-third (34 percent) of millennials are unaware of their parents' estate plans, although 58 percent have broached the subject of estate planning with older family members, indicating a generational willingness to discuss these critical issues. On a positive note, one-third of Gen Z (33 percent) said they have an estate plan in place.

In spite of the wildfire-like excitement that’s surrounded AI in recent years, adoption of the technology in estate planning is still minimal. Only about a third of Gen Z and millennials in the survey expressed openness about using AI for estate planning, with the willingness even weaker among baby boomers at 19 percent.

Identified as the predominant group within the "sandwich generation," two-fifths of millennials (39 percent) said they juggle the responsibilities of caring for their children and elderly parents, and three-fifths (58 percent) said it will hamper their ability to leave a financial legacy. With 55 percent reporting that the housing crisis and interest rates have stalled their home-buying plans, this financial strain impacts their ability to transfer wealth.

Nonetheless, 74 percent of millennials express a strong desire to pass on wealth, aligning with previous findings that having children is a primary motivator for creating estate plans.

An interesting note from the study shows that millennials' charitable tendencies saw a 10 percent increase from the previous year, with 54 percent now including charitable contributions in their budgets.

“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," Barbo said. “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.”