In the fall of 2022, I had the pleasure of chairing Everyone Needs a Plan: Estate Planning for Millennials and Gen Z, which was a Continuing Professional Development session facilitated by the Ontario Bar Association Trusts and Estates Section. I chose to focus on this topic because I believe that it will become increasingly relevant to estate planning advisors as “Millennials” (defined by Statistics Canada as individuals born between 1981 and 1996) and “Gen Z” (defined by Statistics Canada as individuals born between 1997 and 2012) begin to think about their estate planning. I myself have noticed significant differences between the goals, priorities and values of Millennial/Gen Z clients versus those of my older clients (40 years of age or older).
The program occurred on October 6, 2022 and included four panel-based discussions. The panels included lawyers, accountants, community advocates, consultants, wealth advisors and tech entrepreneurs. This article will extract some of the key points stemming from those discussions with respect to the unique estate planning considerations for Millennial and Gen Z clients.
1. Plan Properly for Unique Assets
Millennials and Gen Z are more likely to have unique assets that differ from the traditional house, car or bank account. In fact, given the effects of inflation and other volatile economic circumstances, many of these types of clients may not own any real estate, or even a vehicle for that matter.
That being said, there are some specific asset classes that these clients are more likely to own. The first includes digital assets (e.g. social media accounts, email accounts, cryptocurrency, websites). While planning for digital assets can be an entire topic in itself, practitioners should mainly be aware that the law with respect to this planning is still developing. Some jurisdictions (e.g. Saskatchewan, Prince Edward Island) have created their own legislation to specifically address this. Nonetheless, practitioners face challenges from technology companies who will usually demand court orders from their home jurisdiction (often California) before releasing any account information to an estate trustee. In this way, elements of privacy law, contract law and even intellectual property law can come into play.
Millennial and Gen Z clients may nonetheless have physical assets in addition to their digital assets, including collections (e.g. sneakers, trading cards, vinyl records etc.). Note that these collections will often be addressed by the “personalty” clause of a will, but this should be confirmed with the client beforehand. Some clients may view these collections as investments, or may have other specific intents for them. Therefore, advisors should confirm the existence of any collections that stand separate and apart from the rest of a client’s personalty.
Lastly, in Ontario, pets are considered property. Nonetheless, it has become very evident that many Millennial and Gen Z clients not only own pets but want to ensure that their pets are taken care of in their estate planning. Many such clients may have pets in lieu of having children (and this is because of, among other reasons, changing generational attitudes and an economy that is making it more difficult to have children). Primarily, the client needs to advise who will take care of the pet. They also need to determine how the pet’s future care will be funded (e.g. will there be an outright gift to the successor owner, or will there be a trust set up for the benefit of the pet).
A general tip for all unique assets is to determine which may have financial value, and which may have sentimental value. In all cases, the client should create an asset list/inventory. This will help inform the advisor which in turn will allow for proper planning. Lastly, the tax implications of owning these assets should also be taken into account – for example, upon a client’s death, there may be capital gains taxes payable on a trading card collection that has increased in value from the time the client acquired it.
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