Planning Ahead, Today: Why Your Millennial And Gen Z Donors Need An Estate Plan

Created By: Natalie Brown and Piper Hardin, CFRE
August 9, 2022

“A day late and a dollar short.” This idiom has held meaning for nearly 100 years, typically in the sense that an opportunity has been missed either by literal tardiness or lack of effort. We cannot think of a more apropos saying than this when we talk about the importance of early estate planning. In fact, it is recommended that people begin building an estate plan as soon as they have acquired assets of their own, which can happen as early as 18 years of age. Generations are becoming environmentally, civically, and socially mindful at increasingly younger ages, so it would make sense that their long-term planning should, as well. These conscious-minded young adults will want to ensure that their assets fund the causes they care about and end up in the hands of their loved ones in the event they pass away.

The Millennial (born between 1981 – 1996) and Gen Z (born between 1997 – 2012) generations are accumulating wealth. The oldest Millennials are now well into adulthood in their early forties. While they might not be accumulating property in the same way as earlier generations, they are still creating sizable estates. There are many reasons why your younger generation of donors should consider estate planning – the biggest reason being empowerment over their life, their assets, and their legacy.

According to a recent study highlighted in ThinkAdvisor, three-fourths of Millennial respondents have completed a will-based estate plan. 71% of these Millennials had a net worth of $500k or less, proving that estate plans aren’t just for the wealthy. If you have Millennial and Gen Z donors or board members, do you know if your nonprofit has been included in their estate plan? If not, you may want to work the topic of estate planning into your cultivation strategy.

Planning ahead: the financial benefits.

According to CNBC, 3 out of 4 Millennials and Gen Z-ers donated to charity during the first year of the COVID-19 pandemic. Given that Millennials and Gen Z make up over half the U.S. population, that’s a lot of giving. For two generations that are extremely mission-driven, promoting estate planning is a great way to engage your younger donors long-term and empower them to take control of their giving. It’s important to remember that a planned gift can be any size – no amount is too small, and certainly, no amount too large. We encourage nonprofits to have these conversations with their younger donors in addition to their older donors. Younger donors are thinking about the causes they care about and the legacy they want to leave and capitalizing on that will be beneficial to both parties.

Planning ahead: How to get started today.

Many of the Millennial respondents in the study we referenced earlier were motivated to make an estate plan by having a child, losing a loved one, or buying a home. Nearly a quarter of Millennials cited the COVID-19 pandemic as the primary reason for starting an estate plan. However, individuals do not have to wait for a monumental life event to make an estate plan. It also doesn’t have to be a dull and dreaded experience – it can be thought-provoking, comforting, and in some cases, even fun. In fact, one of our colleagues recently held an “Estate Planning Party” where they hired an attorney for the evening, served wine and charcuterie, and had their friends over to go through facilitated estate planning exercises.

To establish an estate plan, nonprofits will want to encourage their donors to take into consideration trusts, a will, assigning power of attorney, and obtaining an advance medical directive. While this might seem like a daunting list, the first – and biggest – step is figuring out what is most important to your donors, in life and in death.

In the event your donors need help getting started, here are several prompts you can encourage them to start thinking about:

• What causes are most important to you?
• Are there any specific places that you would want to donate to (i.e., the animal shelter where you adopted your childhood dog, your summer camp, your alma mater)?
• Think of your physical possessions – would you want any of them to go to specific friends, family, or charities?
• If you were incapacitated, what would you want your family and doctors to know about your health and your health wishes?
• If you have children, who would you want to take care of them in your absence?
• What do you want your social impact and legacy to be?
• Who will be permitted to manage your digital assets (PayPal, Cryptocurrency, Venmo, etc.)?
• Who do you want to take care of your pet?

If there’s one thing we learn as we age, it’s that life is completely unexpected – so why not plan for every scenario? Planning for the future gives control over finances, health, and legacy. Estate planning is not just for the wealthy or elderly. If you have not already, we encourage you to speak with your Millennial and Gen Z donors about the benefits of early estate planning to ensure that the causes and people they care about are protected.