COVID-19 Is Making Young Adults Think About Estate Planning
Estate planning is often one of those things you intend to do someday. Or you may be waiting for when you have children or more assets to protect. Generally, young adults who do not have money or kids don't think about estate planning.
According to a survey by Caring.com, the percentage of young adults with estate planning documents increased from 16% in 2020 to 24% in 2022. This is a significant trend considering most adults, only one out of three, have an estate plan.
Young Adults Are Seeing how Estate Planning Works
Many young adults and millennials experienced the serious illness or loss of a loved one due to COVID-19. As a result, they know firsthand how proper estate planning, or lack of it, affected their families.
You may have seen how a simple health care directive made a difference in getting medical information. Unfortunately, stringent HIPAA and medical privacy laws make it difficult even to get a loved one's medical status. In 2020, the University of Pennsylvania Leonard Davis Institute reported there was a fivefold increase in online advance medical directives created during the pandemic.
You may have also seen how a loved one dying without a will or a guardian designation for their children left their estate stuck in probate (and the extra time and money that entailed) and a family thrown into chaos.
Or you may have contracted COVID-19 and suffered an extended illness or hospitalization. You and millions of others needed someone to step in to manage their affairs or care for a pet or a child when they were ill. According to Caring.com, “Those who've had a serious case of COVID-19 are 66% more likely to have a will."
Young Adults Have Pets To Protect
And although young adults are waiting longer to start families, they have pets. A 2021 ASPCA survey shows that 1 in 5 households bought or adopted a dog or cat during the pandemic. But, of course, with pet ownership comes responsibility, and you can use estate planning to set up care for your pets if you are unable.
However, COVID-19 may not be the only reason young adults take the lead in getting their affairs in order. Other factors may contribute to the rise in estate planning.
They Have More Need for Estate Planning Than Before
Young adults are now recognizing that estate planning goes beyond guardianship of minor children and money concerns. Financial and health care powers of attorney are becoming more popular. As more young adults get married later in life, there is a need for someone to help you with financial or health care decisions if you are unable to make those decisions on your own.
According to a 2018 U.S. Census Bureau report, around 60% of adults 25-34 were single in 2018, up from 45% in 2000. If you fall into this group, but you still live with a partner, you need a financial power of attorney or health care directive for your significant other to help care for you if you need it.
They Embrace Technology and Can 'Do it Themselves'
Young adults are recognizing that estate planning is something they will have to revise throughout their lifetimes as well. You may have to make a new will when you marry, have children, and accumulate wealth. That's why people like you are looking for easy, low-cost solutions to get started and put together a complete estate plan.
Many of them find online tools to research and create their own estate plan. They can connect with estate planning attorneys in online directories or use online estate planning programs such as Findlaw Legal Forms & Services. The benefit of the DIY option is that they can change their documents as their circumstances change.
They Have Simple Needs
Generally, young adults have less complicated estates, so they do not need to worry about sophisticated tax planning or trusts. And many do not have significant wealth or young children to protect.
Instead, they want a basic estate plan of a last will and testament, financial power of attorney, and health care directive. With online tools, they can easily create their estate plan. And so can you!
The experiences young adults had during COVID-19 may prompt them to be more proactive. They want to avoid the hassles of not having a solid estate plan. As we emerge from the pandemic, it will be interesting to see if this trend continues.
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