Many people put off creating or updating their will, regardless of their net worth, often because they don’t want to deal with the uncomfortable issue of death. Consider some ultra-high net worth celebrities who have passed away without a will such as Aretha Franklin, Prince, Amy Winehouse and Bob Marley.
Some Millennials (people in their late 20s to early 40s) and older Gen Z (early 20s) also believe they are too young to have a will and/or need significant assets to make it worthwhile. However, anyone with even modest assets, such as a car, a pet, or bank account should have a will to ensure that their wishes on who should receive such assets if they were to pass away suddenly happens.
According to the Financial Consumer Agency of Canada’s 2019 Canadian Financial Capability Survey, just over half of Canadians (55%) have a will, and 40% have powers of attorney (POA) drawn up. “For Canadians under age 35, the challenge seems to be creating an estate plan in the first place,” the report states, noting that only 22% in this age group have a will and only 9% have a POA. “Addressing this financial gap is especially important for those who have children or other financial dependents,” the report adds.
The pandemic has prompted many people to create or update their wills and POAs, given the time spent at home thinking about their personal affairs and realizing the serious health effects of COVID-19, including death. Still, too many Canadians remain without a will and POAs, which can create a lot of legal and financial headaches, and disharmony among loved ones, if they were to become incapacitated or die.
Millennials and Gen Z arguably have more reasons than previous generations at their age to have their wishes formalized in a will and POA, according to Jag Gandhi, vice-president of wealth planning at Gluskin Sheff. “From a wealth and estate planning perspective, there are many differences that, Millennials and Gen Z need to consider that their predecessors did not have to consider,” she says.
A major difference is the number of digital assets people under the age 40 are likely to have compared to the Baby Boomer population. It’s not just dealing with social media accounts such as Facebook and Instagram when you’re no longer around, but also cryptocurrency, non-fungible tokens, and other online investment accounts that are becoming increasingly more common among younger generations.
Gandhi says the laws around digital assets haven’t kept pace with the speed of digitization.
There is no clear guidance on how to deal with digital assets which makes it even more critical that the younger generations with such assets plan properly what should happens to those assets should they pass away
“Otherwise, if you don’t have a plan, those assets could be in limbo for a long time.”
More Millennials and older Gen Zs are also pet owners, especially since the pandemic, which means plans need to be put in place on what should happen if their pets were to outlive them.
A will can lay out specific directions such as who will take care of the pet if you pass away and set aside funds to help pay for costs such as food, vaccines and veterinary bills that will inevitably come up, especially as the pet gets older and may have more health issues.
Another area Millennials and Gen Z may wish to include in their estate plans is what happens to collectibles, such as art, jewelry, or vintage items that may have value. For example, Gandhi says she has drafted wills that include expensive watch collections, which has become a popular pastime among some young adults.
“If someone has a collection, they may have someone in mind that they would want to transfer it to, but it should be made clear in a legal document,” according to Gandhi.
“There’s a uniqueness with this Millennial generation, in terms of their assets, that our current estate planning isn’t robust enough to clearly state what could happen,” she says. “What was covered off in a line or two now needs to be more detailed to capture these different assets and what someone wants to have happen with them should they pass away.”
Gandhi says that many Millennials and older Gen Z have also started their own businesses, meaning they may need to draw up a separate will to deal with their business assets.
“In jurisdictions such as Ontario and British Columbia, business owners can have a personal will and corporate will, which is driven by probate planning,” she says.
According to Gandhi, Canadians can also have multiple wills for personal items. For instance, she has had clients who had three wills, one for the business assets, one for his personal assets and a third will that dealt specifically with some valuable collectibles.
Younger generations are arguably more varied and fluid in their sexual identities, Gandhi says. And while there has been some progress with same-sex laws in Canada, she says there are limitations for LGBTQ+ people, which makes estate planning more important to ensure their wishes are met.
“It’s really important for people in these communities to have wills and powers of attorneys in place so they can avoid the application of the intestacy rules,” she says. Gandhi also recalls one client who changed genders and wanted to update their will to ensure that it was reflected in their will.
Increasingly common among younger generations is assisted reproductive technologies and surrogacies. Having children through these options may require specific provisions under one’s will, such as having valid will in place before a surrogacy relationship can be established.
“No parent wants to think about their child dying before them,” says Gandhi so many parents are unlikely to encourage their adult children to get a will prepared. It is really up to younger people to start the process for themselves even if they don’t want to think about getting seriously ill or dying.
“Death is a tough topic to deal with, at any age,” she says, but is important for Millennials and Gen Z to turn their minds to succession planning. “If the worst-case scenario happened, then you have the peace of mind knowing that your assets will go to those you have chosen to receive them while hopefully avoiding any conflicts among loved ones.”