Gen z estate plan

Gen Z Estate Planning Guide

Gen Z Estate Plans: This Isn’t Your Grandpa’s Will

This probably isn’t the first time you’ve been advised to make an estate plan. In fact, most people agree that making a will is extremely important—only to admit they haven’t made one in the next breath. When it comes to walking the walk, one demographic is quickly pulling ahead of the rest: Generation Z. According to Forbes, those “kids” are doing more financial and end-of-life planning than individuals closer to retirement age. So why is there a sudden surge in estate planning for young adults, and what sets Gen Z estate plans apart from the rest?

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Gen Z Estate Plans Differ from Previous Generations

Born between 1996 and 2012, Zoomers were at a tender age when the COVID-19 pandemic hit. Their heightened awareness of health crises and high fatality rates undoubtedly led to increased estate planning for teenagers and young adults. Early exposure to economic uncertainty may also have led Gen Z to prioritize financial planning in higher numbers than their parents or grandparents.

Although they typically have a lower net worth, there are many distinct estate concerns for young adults, including:

1. Digital Assets

Digital assets like Bitcoin and NFTs require specific planning to ensure they are passed on correctly. They often need secure storage solutions and detailed instructions for access. In addition to cryptocurrencies, there may be other valuable digital assets, such as investments, e-commerce shops, and other online income streams. You may also have monetized digital content, such as a YouTube channel, blog, or TikTok.

You may need to designate a specific digital executor into your estate plan to oversee your online affairs. Your chosen representative will need to know where you keep your passcodes, security credentials, and documents for all online accounts.

2. Online Personas

Gen Z has grown up with online platforms for everything from school and work to games and socializing. You should include instructions on what should happen to their digital records, such as texts, emails, WhatsApps, and DMs. Unsponsored social media accounts like Instagram, TikTok, and YouTube may contain sentimental content. Will someone continue to manage the account on your behalf? Will it be archived or deleted outright? Consider what you have shared and any potential privacy concerns carefully.

3. Student Loan Debt

Student loan debt affects many members of Gen Z, often impacting their financial planning and estate considerations. Student loans typically don’t disappear upon death; depending on the type of loan and repayment plan, they may need to be managed or forgiven. High levels of student debt can affect how assets are distributed, especially if the debt is significant relative to the estate’s value.

4. Non-Traditional Employment

Gen Z’s involvement in the gig economy—through freelance work, side hustles, or entrepreneurial ventures—presents unique estate planning challenges. Managing and documenting irregular income streams for estate purposes can be complex. For entrepreneurs running small businesses or startups, succession planning is an essential component of your estate plan.

5. Family Dynamics

Family structures and relationships have evolved significantly in the past few years. Many Gen Z individuals may have non-traditional family arrangements or relationships, such as blended families, same-sex partnerships, or cohabiting partners, which require careful consideration in estate planning. Some may have dependents or pets that need to be provided for, requiring specific instructions in estate documents.

6. Environmental Concerns

A growing awareness of environmental issues may influence your approach to estate planning. Gen Z often prefers to allocate assets to environmentally friendly investments or charitable causes focused on sustainability or halting climate change. There is increasing interest in eco-friendly burial options, such as biodegradable caskets or green cemeteries.

7. Mental Health Awareness

Advances in mental health awareness and treatment can influence estate planning considerations. Addressing potential future mental incapacity in estate planning, such as setting up guardianships or advanced healthcare directives, is essential. You may also appoint decision-makers to care for and support loved ones with mental health challenges or special needs.

8. Tech Troubles

Technological advancements also impact estate planning for Gen Z, and sometimes not for the better. The rise of online estate planning tools and AI platforms may make it easier for you to create basic documents, but it also requires understanding their limitations. Gen Z is also less likely to print copies of digital documents, making their wills and end-of-life documents harder for third parties to locate. Always keep a physical and digital copy of your estate plan—and let a trusted person know where you keep it!

Essential Documents to Include in a Gen Z Estate Plan

Estate planning is important for everyone, even those who don’t have substantial assets. While you might not have a complex estate (yet), having a basic plan in place ensures your wishes will be respected if something unexpected happens. At the minimum, your estate plan should include:

  • Medical Records Release. The moment you turned 18, your parents lost the right to see your hospital charts or discuss your medical condition with your doctors. If you haven’t already done so, complete a medical records authorization form to allow your parents, siblings, or trusted friends to access your medical information in an emergency.
  • Medical Power of Attorney. Your parents do not automatically retain the right to make financial and medical decisions for you. This document appoints a trusted friend or relative to make medical decisions on your behalf if you cannot do so yourself.
  • Financial Power of Attorney. This appoints someone to manage financial and legal matters if you become incapacitated. Choose someone organized, good with money, and can be trusted to pay your bills and handle your business affairs.
  • Advance Directives. Also known as a Living Will, this outlines your preferences for medical treatment and end-of-life care. For example, you may not wish heroic measures to be taken to save your life if your condition is unlikely to improve.
  • A Will. While this document is arguably the cornerstone of your estate plan, it has limitations! It outlines how a person’s assets should be distributed upon their death and can name guardians for any dependents. 
  • Digital Assets Inventory. Documenting online accounts, digital assets, and login information can help manage digital property and ensure access to important online accounts.
  • Beneficiary Designations. Make sure that the beneficiary designations on your bank accounts, life insurance policy, and retirement accounts are up to date. NOTE: Your beneficiary designations supersede the directions in your Will, so choose your beneficiaries wisely!

Preparation is Key to Estate Planning for Generation Z

You may not need an estate plan for decades, but fate doesn’t always play fair. Creating an estate plan sooner rather than later provides critical guidance for your loved ones. At Yolofsky Law, we create plans that address all aspects of your life, not just your money and property. Please email us at hello@yolofskylaw.com today or schedule a 15-minute call to get started.