Generational and Gender Differences in Approach to Estate Planning
investing-my-money | Read Time: 4 minutes
By Donald D. Lyons, CFP®, NSSA® | Published: July 2022
Since the start of the pandemic, our lives have changed in a variety of ways, from increases in telemedicine and working from home to virtually learning. The new normal has become, well, normal.
The pandemic has also created a greater awareness around estate planning, from the very young to those who are advanced in years. Every estate plan should include a will, powers of attorney and an advanced medical directive, or living will. The inclusion of a trust(s) and other strategies will vary depending on the complexity and size of one’s wealth.
Let’s explore the differences in estate planning through the lens of different generations and gender.
Baby Boomers (1946-1964)
Well into the late stages of their careers or in retirement, baby boomers, along with the preceding silent generation, own and control the biggest share of wealth. Over the next several decades they are positioned to leave behind trillions of dollars in wealth to the next generation (The Great Wealth Transfer). Given the enormity and complexity of their wealth, they are the most likely to incorporate trusts as part of their estate planning to mitigate federal estate taxes, maintain control, and provide for future generations. The most charitable of all generations, baby boomers give generously to nonprofits (gifting cash, appreciated securities etc.) and their children and grandchildren through annual gift tax exclusions ($16K annually). Baby Boomers often seek legal advice from experienced estate planning attorneys who are typically recommended through their CPA’s, financial advisors, and/or real estate agents.
Generation X (1965-1980)
During this growth, with the majority being in mid to late-stage careers, Gen Xers are the sandwich generation, stuck between the demands of raising their own children while simultaneously caring for their ageing parents. With minor children in tow, their estate plans will include guardianship and the adequacy of life insurance coverage. Guardianship typically defaults to Grandparents in the event both parents pass away. However, Gen Xers must consider the financial and health condition of their parents in assuming guardianship responsibilities. Life insurance is critical at this stage as it provides a means of lifestyle maintenance for their surviving spouse and educational expenses for their children.
As the primary beneficiaries of The Great Wealth Transfer, many will not only inherit additional wealth but will serve as power of attorney and executors of their parents’ estates. This generation is likely to use a combination of online resources and reputable attorneys when developing their own estate plans independent of their parents.
Also known as Generation Y and now the largest generation with the youngest member being age 26, many millennials are just starting out; growing their careers and creating families and may feel they are either too young or don’t have enough assets to consider estate planning. However, estate planning at this stage is just as critical. In 1990, then 26-year-old Terri Schiavo went into cardiac arrest, eventually leading to her being in a persistent vegetative state. Unfortunately, Terri had no estate plan in place, specifically an advanced medical directive or living will. As a result, a court battle between her husband and parents ensued and lasted nearly 15 years before her death. Younger members of the millennial generation are likely to seek and create estate plans solely through online mediums.
Statistically, women outlive men by an average of five years and in some case even longer depending on a relationship’s age gap. This makes it more likely that women will have the final say regarding the passing down of family wealth. Despite this phenomenon, women (specifically baby boomers) have often taken a hands-off approach to estate planning with sole reliance on the plans created by their husbands. However, younger generations of women have taken a more active role in their estate planning as they are now marrying later in life, if at all, earning more and building their own wealth. Women across all generations should take a more active role in their estate planning to ensure it meets their individual needs and circumstances. Education in not only estate planning but also the nuances of their estate plan will only strengthen their position over the long term.
Regardless of generation or gender, estate planning is of great and equal importance to everyone.
About the Author – Donald Lyons
Donald Lyons is a Wealth Strategist with Bryn Mawr Trust. With 20 years of experience in wealth management, he provides high net worth clients with fiduciary and investment management services. Donald is a CERTIFIED FINANCIAL PLANNER™ professional as well as a National Social Security Advisor®. He holds a master's degree in Business Administration from Pennsylvania State University and a bachelor's degree in Business Administration from Temple University.
This communication is provided by Bryn Mawr Trust for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. No portion of this commentary is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in this report is derived from sources that Bryn Mawr Trust believes to be reliable; however, Bryn Mawr Trust does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.
A portfolio balanced between both stock and bond holdings has been a classic strategy for investors throughout market history. Although equities generally outperform bonds in the long run, the stock market can be volatile.Read More
WSFS and Bryn Mawr Trust Provide 6abc Viewers with Tips and Advice on Money Management, Investing and Buying a Home
In the current economic environment and housing market, with rising interest rates and inflation at its highest in 40 years, consumers are looking for expert advice to help them manage their money in challenging times. WSFS and Bryn Mawr Trust were recently featured on two 6abc programs aimed to help consumers overcome obstacles to achieve financial success, navigate the housing market, and wisely invest in their futures.Read More
There are countless articles about saving, investing, and budgeting for retirement, otherwise known as asset accumulation, because a few general principles apply to many, e.g., live within your means, utilize tax-advantaged accounts, avoid high-interest debt, and automate savings where possible.Read More
The markets and the economy are ever-changing, making it hard to keep up sometimes. Let WSFS help you make sense of it all. Tune in to our Market Minute update from Andrew N. Davis, CFA®, Director of Research at West Capital Management, a subsidiary of WSFS Financial Corporation.Read More