Ranking Last in Estate Planning, Gen X Risks Unforeseen Consequences

Gen X has a lot on its plate, with many in the so-called sandwich generation caring both for aging parents and children who are entering adulthood at a time when inflation is seriously squeezing Americans’ pocketbooks. Ironically, the adults doing the most financial heavy lifting for others have the least protection themselves, according to new survey data from the digital estate planning platform Trust & Will. Gen X sits at the bottom of the preparedness table across every foundational estate planning document the survey tracked, heightening the risks of fallout from an unexpected death or disability. 

Financial advisors are well positioned to help, said Trust & Will CEO Cody Barbo, and they can start by reframing the common assumptions that estate planning is a “retirement thing” or only for the ultra-wealthy. “Estate planning isn’t about how much you own,” Barbo told Retirement Upside. “It’s about who gets to speak for you when you can’t. Who cares for your children? Who makes medical decisions? Who handles your affairs?” 

A Generational Gap 

Gen Xers are in the worst shape when it comes to estate planning, but they’re not so far behind other demographic groups: 

• Some 56% of U.S. adults have no estate planning documents, with just 26% having a will in place despite 73% saying estate planning is important to them.
• More than 60% of Gen X have zero estate planning documents, followed by millennials (58%), Gen Z (54%) and baby boomers (48%).

The recommended course of action is to start with a will, Barbo said, even if people  believe their assets are modest. A will identifies who cares for their children, who handles their affairs and who receives what they own. From there, people should consider adding a medical power of attorney and an advanced health care directive, which ensures someone they trust can make medical decisions if they become incapacitated. In cases where greater wealth is in question or there are children with special needs or disabilities, the establishment of a trust can make a lot of sense. 

A Shifting Tide? About half of Americans say their financial anxiety increased over the past 12 months, a trend that has historically heightened interest in getting affairs in order, though it appears to be having less of an effect now, according to the Trust & Will survey. Anxiety alone does not move people to act. It has to be paired with a clear, accessible path forward, which is where advisors can shine. 

“The advisor now edges out the attorney as the preferred estate planning channel,” Barbo said. Specifically, 27% would prefer to create or update an estate plan with a financial advisor versus 24% with an estate planning attorney, while 19% want both involved.