A Millennial Perspective on Estate and Beneficiary Planning
By
Erin Lowry
Why It Matters:
Many Millennials are, or will be, rearing children and caring for aging parents. The sooner they prepare to join the “Sandwich Generation,” the better.
Millennials should discuss estate planning with their aging parents to learn about their financial needs before it’s too late.
It’s important Millennials approach these conversations as an expression of love, because that’s what they are.
Millennials undoubtedly need to be thinking about our own estate and beneficiary planning, but frankly, that’s not where our current concerns lie.
It’s not because we still think of ourselves as indestructible youths. Believe it or not, we’re aging into gray hairs with strange aches when we’ve slept funny. After all, the oldest Millennials are 41 in 2022 and the oldest of Gen Z are hitting their mid-20s. Our concern around estate and beneficiary planning is for our aging parents, who are dominantly Baby Boomers, ranging from 58 to 76 years old, and a smattering of older Gen Xers. Our parents are retiring, and we have questions about their ability to live comfortably as they continue to age – and it’s a gentle reminder that we should probably have an estate plan ourselves.
It’s critical for financial planners to encourage clients and their adult children to have estate planning conversations. Or, alternatively, to encourage their Gen X and Millennial clients to navigate potentially awkward financial conversations to assess if their parents’ retirement funds are sufficient.
Helping Millennials engage with their aging parents
Millennials are aging into the “Sandwich Generation,” stuck between rearing children and caring for aging parents. It’s a squeeze that can result in us failing to put on our own oxygen masks first because we’re too busy physically, emotionally, and financially assisting others. A squeeze for which we may be able to navigate with more ease if we begin to prepare early.
Financial planners must consider it critical for your Millennial clients to initiate the retirement and estate planning conversation directly with their parents (and in-laws). It’s the only way to know if they, the adult child, will need to support aging parents or handle any financial liabilities that may exist after a death. After all, this will directly impact today’s financial plan. Instead of waiting for an inciting incident – like a health scare or disability forcing the parent out of the workforce – clients should start preparing now. Language you can use to bring up the conversation with your clients includes:
Have you spoken with your parents about their retirement or estate plans?
What concerns you about your parents' aging process?
What worries you about having to handle a parent’s estate after death?
Financial planners who have already navigated the potentially dangerous waters of the “Sandwich Generation” should consider sharing their own experiences with Millennial clients, particularly regrets. Personally, it motivated me to bring up the retirement and financial planning conversation with not only my parents, but also my in-laws. A moment as simple as my mother-in-law discussing the headache of settling her own father’s estate and filing that nugget away to use later as an opening for an important conversation.
“I know it was a hassle to handle your Dad’s estate, but it made me wonder if you and (my father-in-law) have a will and estate plan in place?”
Is there a checklist you use with your clients to ensure their estate plan is complete? Provide a modified version to Millennial clients that offers a checklist of what to ask their parents. For example:
Do your parents have beneficiaries named?
Is there a legal will?
Who is the power of attorney and healthcare proxy for your parents?
Is there proper insurance coverage?
When was their estate plan last updated and reviewed?
How to log into accounts?
And where is the estate plan and other paperwork kept?
You should also pay attention to any mention of family changes, such as when your Millennial clients mention a divorce, death, or change in mental capacity of a parent or sibling. It’s a good time to remind clients how critical it is to ask their parents about their estate plan and to remind their parents that legal paperwork needs a refresh as life changes.
You can encourage your Millennial clients to engage in this conversation fairly directly, if it’s appropriate for their family dynamic.
“I’m working on planning my financial future and it’s hard for me to make those plans without knowing what your future looks like, because I love you. I would really appreciate it if we could have a conversation about how prepared you feel for your future and any concerns you may have. How do you feel about that?”
Another strategy to initiate important conversations with parents, particularly resistant ones, is to ask for information by using personal experience – which yes, parents can probably see straight through, but their response can be telling.
“I just drew up my will [it helps to give a reason like we’re planning to start a family or after getting married] and I was pretty surprised with how simple it was for me. Have you thought about handling your will?”
In the end, the foundation of these conversations is that it’s an expression of love. Having an estate plan, expressing your wishes to your family members, making sure everyone knows where to access critical information – this is all a way to ensure loved ones left behind aren’t scrambling to figure out the pieces in their time of grief. And financial planners would be wise to remember that each client will bring their own emotional baggage to this conversation and the exact dialogue that worked for navigating this conversation in yesterday’s meeting may not be effective in today’s.
Helping aging clients engage with their adult children
“Do you two have time for a call tonight about updates to our estate plan?” That’s an actual text I recently received from my mom because my Boomer parents are a financial planner’s dream. Not only are they frank and pragmatic about the need to plan for their eventual deaths, but they’re not shy about communicating their estate plans to their Millennial children.
The logistical difficulty of death will be significantly mitigated by my parents’ proper estate planning, especially because we live many states apart. I know that they’re financially secure in retirement, have long-term care insurance, wills, advanced healthcare directives and power of attorney paperwork. I even know the name of their financial planner and how to reach him. It’s an act of love that will allow me (and my sister) to grieve without the additional stress of trying to cobble together or guess what my parents would have wanted. This is exactly how the importance of the estate planning conversation can be pitched to clients: an act of love.
It starts with a simple question: “Have you discussed your wishes/plans with your children?”
A yes should be followed up with questions whether it’s appropriate for you to occasionally touch base with the power of attorney and/or other children so they’re familiar with you and will know how to get in touch.
A no can be followed up with open-ended questions such as, “What makes you hesitant to discuss this with them?”
At first, you may feel uncomfortable trying to help clients facilitate these conversations or even navigate tricky family dynamics. However, these are critical conversations and you’re providing an invaluable service by encouraging clients to engage with their families. Unfortunately, not all clients will have these crucial conversations, but at the very least you can provide a client with an inventory of what needs to be discussed. This can include an overview of the client’s wishes, where necessary paperwork is stored (including log-in information on accounts), and who has power of attorney, is the healthcare proxy, and executor of the will.
Financial planners should include scripts for their clients about how to initiate crucial conversations with heirs.
“We [the parents] want to sit down and have a conversation with you [the adult children] about our estate planning. I know that can sound intense, but it’s important to us that you know our wishes and exactly where all the information is kept. We want to make sure you’re prepared when something happens and aren’t left to guess what we would want and where to find all the necessary documents to handle settling our estate.”
Plus, it doesn’t hurt to include a list of what not to say based on your experience of seeing financial conversations spiral south.
Should your clients continue to be reluctant, you can ask if they would like you to speak with their adult children either as a group or individually.
“How would you feel if I answered your children’s questions about the estate planning process? We do not have to share particulars of your estate plan, but I could introduce myself and answer high-level questions about the process of settling the estate.”
Regardless of the parents’ comfort level in navigating this discussion themselves, it is prudent to introduce yourself to the person named as power of attorney. Of course, this is not a step that should take place without direct consent from the parents.
“Are you comfortable with introducing me to your power of attorney and executor of the will, so they know who to contact when it’s necessary?”
Things to Consider:
Having an estate plan will ensure no one is scrambling to find documents or confirm final wishes at a difficult time.
Divorce, death, or changes in mental capacity often require changes in legal paperwork.
Financial planners provide an invaluable service when they encourage and facilitate critical estate planning conversations.
Transamerica Resources, Inc., is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker-dealers. Transamerica Resources, Inc., does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical, or financial advice or guidance. Please consult your personal independent professionals for answers to your specific questions.
