Millennial parents need to understand what they’re buying when they create a will through low-cost, online services

On this episode of the Millennial finance podcast Financially Well, I’m going to talk about estate planning for Millennial parents, specifically creating a will. In particular, I’ll talk through the situations in which you might decide to create a will without a lawyer. A recent article from Veronica Dagher highlighted how the Covid-19 pandemic has drawn new focus among Millennials to estate planning. But where should you start? And how can you create a will while minimizing your cost and time commitment?

Why More Millennials May Need to Create a Will Without a Lawyer

Veronica Dagher is a personal finance reporter for the Wall Street Journal. And on December 6, she wrote an article entitled, “Millennials, Feeling Their Mortality During Covid-19, Start Writing Their Wills.” In the article’s first few paragraphs, she writes:

“The largest factor driving the increase in millennials’ will writing is continued uncertainty of whether they or their family will get sick. Also driving interest, say lawyers and financial advisers, are events millennials haven’t experienced before, such as sharply rising inflation. The general unease is prompting some to write wills and healthcare proxies to feel more in control. Estate-planning lawyers say they are busier than ever.”

What Is a Last Will and Testament?

Let’s back up briefly and define what a “will” is. Officially known as a “last will and testament,” a will, according to personal finance website Investopedia, is a “legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children.” Investopedia also adds:

“To maximize the likelihood that your wishes will be carried out, create what’s known as a testamentary will. This is the most familiar type of will; you prepare the document and then sign it in the presence of witnesses. It’s arguably the best insurance against successful challenges to your wishes by family members or business associates after you die.”

Most young adults, especially in the years immediately following college, don’t think much about a will. They figure, “I don’t have any kids. I’m not married. And I don’t have much in the way of assets.” But the importance of a will seemingly creeps up on most Millennial parents, almost overnight. One day, you’re single and broke. And the next day, you have a six-month-old child and you’re starting to grow your savings. Maybe you even own your first house.

At this point, a will may sound like a good idea to you. But you don’t have a lawyer. And you don’t really know where to find a trustworthy one. Also, can you actually afford a lawyer? With this in mind, let’s look at how Millennial parents might create a will without a lawyer.

No One Wants to Talk About Creating a Will

First, though, I want to put this conversation, including Veronica Dagher’s reporting, into context. I regularly discuss money with other Millennials, either as their financial advisor or through a financial wellness program. Few people reach out to me primarily because they want to talk about how to create a will. After all, it’s not particularly exciting or fun. But for most Millennial parents, this task lingers somewhere in the back of their minds. It’s on their financial checklist, but they avoid it due to uncertainty over the best way to proceed. And I get the sense that some people rationalize their procrastination a little bit. If you’re healthy and your financial situation seems straightforward, a will can wait, right?

It’s important for me to say here that I’m not a lawyer. Ultimately, you want to feel confident that you’ve created a will that meets your family’s needs. You also want to ensure that your will conforms with the laws of the state in which you live. And in order to do so most effectively, you’ll need to consult with a licensed attorney in your state.

5 Ways You May Benefit Even If You Create a Will Without a Lawyer

Just hearing that feels a little daunting, right? But let’s assume for a moment that you have the motivation, time, and financial resources to engage an estate planning attorney. For Millennial parents, what are the primary benefits of actually creating a will? I want to briefly turn the spotlight to another valuable article from last year, in this case from Real Simple and finance writer Mia Taylor. Taylor identifies several reasons why you might benefit from creating a will without a lawyer or, even better, with one:

#1: You’re able to determine exactly how your assets are divided

Without a will in place, state laws will determine who receives your assets. While those laws generally leave everything to your family members, you may not agree with the priority order or percentage distribution that the state specifies.

#2: You’re able to name a guardian for your children

You likely don’t want a judge – who you don’t know and who doesn’t know you – to determine after your death who will care for your children. Within a will, you can designate the person who you would like to assume the responsibility for raising your kids. 

#3: You can establish care and resources for your pets

However fondly you may think of your pets, state laws typically view pets as property. And as property, you can’t leave your pets money for their ongoing care. In addition, without a will, a judge may end up sending your pet to a shelter. A will provides you with an opportunity to name a caregiver for your pet, and leave the funds necessary for their care.

#4: You can minimize the tax burden that your heirs face

A will empowers you to direct your assets in ways that can reduce the taxes that your estate must pay to federal and state governments, such as through charitable donations. But if a court must sort out the details of your estate, your tax exposure may end up being much greater. 

#5: You can reduce the stress and tension that your loved ones feel upon your death

Death obviously isn’t pleasant to think about. And your friends and family will be grieving your loss long before estate financial tasks enter the picture. When they finally must address those financial issues, though, a proper will can make their work fairly straightforward.

Does one or more of these reasons for creating a will resonate with you? If so, you may feel (surprisingly) ready to get started. But what if your budget or overall financial circumstances at the moment put legal fees out of reach for you? Should you wait until you’ve saved up enough money to pay for the “optimal” will? Based on my experiences with other Millennial parents, the answer is no. I’ve met far too many families whose kids have reached school age, but the parents still have not created wills. In many cases, creating a will without a lawyer is better than no will at all.

Multiple Options Exist for Millennial Parents Who Want to Create a Will Without a Lawyer

With that in mind, here’s the aspect of the Wall Street Journal article that I value most: Dagher acknowledges that multiple options exist for Millennials’ estate planning needs, including low-cost, online services that create a will without a lawyer.

Dagher writes, “Do-it-yourself online options will generally be cheaper than hiring an attorney. Someone can create a will and healthcare directive online for $89 with legal-information publisher Nolo if they have a simple estate and don’t want additional documents. LegalZoom offers a last will and testament for $89.

The cost for a lawyer to create your estate plan is dependent on several factors: the number and type of documents; size of the estate and complexity of the family situation; the nature of assets; and the jurisdiction in which it is being prepared, said William Kirchick, president of the National Association of Estate Planners and Councils. …A simple will may cost around $1,500, but it could be significantly more if it is more complicated.”

Guidance if You Need to Create a Will Without a Lawyer

If you’re a Millennial parent who wants to create a will without a lawyer, several options are available online. I won’t advocate here for any specific company or service, in part because I don’t have personal experience with each alternative. But I do want to share a few general thoughts about how to approach the options available to you.

Many online estate planning services include a disclaimer on their websites that understandably might make parents nervous. For example, Nolo’s Quicken WillMaker says, “The information provided on this site is not legal advice.” Rocket Lawyer notes that they do not “provide legal advice or representation…” and they are not “intended as a substitute for an attorney or law firm.” How effectively would these wills work in court after your death?

Such disclaimers emphasize the reality that these quick, less expensive wills aren’t a perfect substitute for working with an attorney. But when you’re nonetheless in the market for these services, I suggest focusing on two key aspects of the will creation process:

• First, pick an estate planning company whose services are as closely tied to qualified lawyers as possible
• Second, look for a will service that offers (and can describe to you) their state-specific will modifications

For instance, Thoughtful Wills is an actual law firm that offers an efficient online process similar to more automated solutions (although their wills are more expensive than others). Total Legal, a low-cost, but reputable option, provides premium members with access to free and discounted legal services. And Trust & Will, a newer entrant to the market, offers licensed estate planning attorney support for a reasonable $200 charge.

Online Wills Typically Aren’t a Long-Term Solution

I hope the two articles that I highlighted today, and my own perspective on Millennial estate planning, empower you to soon create a will, even without a lawyer. The cost of using an online estate planning service is obviously much more feasible for many people than a more traditional, highly customized will. But Millennial parents need to understand what they’re buying. And you shouldn’t consider these documents a long-term solution for your family. When you’re young and things are simple, they’re better than nothing. But as life changes and becomes more complicated, you should be prepared to pay for a customized will that reflects you and the laws in your state.

Check out both Veronica Dagher’s article at the Wall Street Journal and Mia Taylor’s article at Real Simple. I also encourage you to subscribe to their writing and support them on social media. And, of course, subscribe to this Millennial finance podcast to learn more about how you can improve your own financial wellness in the year ahead.

[Editor’s note: this article reflects the transcript (which I’ve edited for clarity) of a recent Financially Well podcast episode.]

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About Kevin Mahoney, CFP®

Kevin Mahoney, CFP® is the founder & CEO of Illumint, a Washington, D.C.-based company that offers financial planning for Millennial parents. He specializes in navigating the new financial decisions that arise during our 30s and 40s, such as repaying student loans, buying a house, saving for college, & learning to invest. In addition, Kevin also works as a financial wellness program provider to Millennial employees around the country, including group speaking engagements.