What Gen X, Millennial and Gen Z Inheritors Get Wrong About Wills and Trusts
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What would happen to your money if you died tomorrow?
Estate planning is one of those things that everyone knows they should do, but no one actually does.
It's the "eat your broccoli" of the financial planning world.
But if you're a current or future inheritor, estate planning isn't optional.
In this episode, I cut through the noise of TikTok influencers pitching complicated trust structures to give you a clear breakdown of exactly what estate documents you need and why.
I'll also tell you when a trust is worth it, when it's overkill, and the one mistake that could make your trust completely useless.
If estate planning is on your 2026 to-do list, this is the episode that will get you moving.
🗓️ Schedule a FREE call to talk more about how I can help you navigate a current or future inheritance.
Transcript:
What Is Estate Planning and Why Do Inheritors Need It?
Hey, I'm Katherine and thanks for joining me at Heir Necessities, the podcast that turns complex financial topics into real talk for Gen X, millennial and Gen Z inheritors. Each episode of this podcast, I break down a different topic related to generational wealth and inheritance. My goal is that you can stop asking Google or ChatGPT what to do with your money and come here instead for real talk, real solutions, and real advice that you can start implementing in your life today.
On this week's episode of Heir Necessities, we are diving into a question that I get all the time. Specifically, as a current or future inheritor, what should my estate plan look like? Do I need a will? Do I need a trust? If I need both of those things, what should I be thinking about when I draft them?
I'm going to cover it all today. At the end of this episode, you will have the practical advice and solutions you need to find an attorney and make 2026 the year you finally feel confident in what's going to happen if something terrible happens to you. Before we dive into it, if you are enjoying Heir Necessities, I would be so appreciative if you could leave us a five-star review wherever you listen to podcasts — it's hugely helpful for the show and it helps me connect with and support more inheritors just like you.
Why Is Having a Will So Important for Inheritors With Wealth?
Now let's dive into estate planning. I know this is something that a lot of people don't want to talk about and don't want to think about — it's scary, it's stressful, I get it. And at the same time, people die, and if the worst happens, the one thing that you can control is having a clear estate plan in place that takes care of your wealth, that takes care of your heirs, and that lets you sleep a little bit better at night knowing that you have that one thing checked off your list.
The most common question I get about estate planning is, what do I need? Literally, do I need a will? Do I need a trust? And what are those things? So we're gonna start by breaking it down at a really basic level. A will is a document that dictates how the person who dies wants their assets to flow. You can think of it like a single point in time document — at the moment where someone dies, a will says exactly where everything should go, how assets should pass, how they should be distributed, and how the estate should be segmented out and then passed to heirs.
That you at least have a will, especially if you have children or other heirs that you need to provide for. The state you live in will decide how your assets pass if you die without a will — it's called dying intestate. And if it happens to you, state intestacy laws dictate how your assets pass, which could mean that your assets flow back up to your parents, that everything goes directly to your kids, or that all of your money goes to a sibling that you haven't spoken to in 10 years.
What Happens to Your Children If You Die Without a Will?
And if you do have kids, dying without a will also means that they are probably gonna go to your closest living relative, who may or may not be the person that you actually want taking care of them. And if you and your partner both have close relatives who both want the kids, it could set up a really messy and unpleasant custody fight. If you take away only one thing after listening to this episode, it's that you need to get a will in place.
It doesn't have to be fancy and it doesn't have to be perfect, but something is better than nothing.
Do You Need a Trust? When Does a Trust Make Sense for Inheritors?
If you're committed to getting your estate plan done and you really want to do it right, then the next piece you can think about adding in is a trust. I know the internet and social media loves talking about trusts and how everyone needs one. The truth is that not everyone needs a trust — trusts are incredibly useful in certain specific circumstances.
There are different kinds of trusts. And for the purposes of this episode, I'm gonna keep things extremely high level, which means this is gonna be a little bit of a reductive discussion about trusts. My goal is to get you educated, not to take you deep in the weeds — if you wanna learn more, you can always reach out, and I'm happy to go deeper, but it's not what we're gonna be doing here.
So there are two primary reasons to set up a trust. The first reason is to avoid probate. The second reason is to exert some control over your wealth after you die.
What Is Probate and How Can a Trust Help You Avoid It?
Let's dive into that first reason: avoiding probate. Probate is the state legal process that happens when someone dies, and if you have assets that transfer via your will, generally those assets are going to go through probate. This excludes certain accounts — specifically accounts that are held in trust and accounts that pass via beneficiary designation — so if you have a retirement account that has beneficiaries listed, that account will pass directly to those beneficiaries and it will avoid probate.
Probate avoidance is something that matters a lot more in certain states over others. Let's take for example California and New Jersey. The probate process in California is notoriously terrible — it takes a really long time, it's expensive, it's a giant headache — so if you live in California, yes, you should set up a trust and you should title as many of your assets as you can, where it's appropriate, in the name of the trust, so that if something happens to you, your heirs can avoid probate.
In New Jersey, on the other hand, the probate process is relatively quick, easy, and inexpensive. So it's less common for someone who lives in New Jersey to set up a trust-based estate plan — it's not unheard of, and there are other reasons to create a trust, but probate alone may not be enough of a motivator.
In terms of this high-level overview, the first huge benefit of a trust is probate avoidance. But this only works if your assets are actually titled in the name of the trust. Quick plug here — if you had an attorney draft this perfect estate plan for you and then you didn't retitle your home, your investment accounts, and all those other assets in the name of the trust, then that trust doesn't do anything for you — it's just an empty shell that doesn't hold anything, and all of those assets could still be subject to probate. Having an estate plan drafted is not the final step, but it is an important step.
How Can a Trust Protect Your Children's Inheritance After You're Gone?
Let's talk about the second benefit of having a trust, which is being able to control your wealth from beyond the grave. This is especially important if you have minor children. If when you die your kids are gonna get five, 10, 20 million each and they're five years old, you probably don't want that money just going into a custodial account for them to get when they hit 18 or 21.
It's likely that you're gonna want a little bit more control over how they can access that money, what that money can be used for, and who's in control of making those financial decisions until your kids are older. We talked about in a will the really important piece being who takes care of your kids — but who takes care of the money for your kids is also a really important question that you need to answer as a young person with wealth and kids.
It may be that the person who's actually taking care of the kids is the same one that you trust to be in charge of the money. But for a lot of people, that's not the case — you might want someone else to be the trustee of those trusts to provide for your kids and the people that are looking after them. This is a totally normal way to set up a trust, where a different person is managing the money than who's actually raising your children.
The benefit of a trust versus a custodial account, as I alluded to a couple minutes ago, is that you have a lot more control. You can set out in the trust document what your kids or their guardians are allowed to use the money for, when your kids can have more unfettered access to that money, and specific distributions related to milestones in their life — graduating from college, getting married, first job, whatever it is. All of those things are important if you're trying to protect your kids from beyond the grave and give them a launch pad into success as a young person with wealth.
How Do You Choose the Right Trustee?
It also requires that you really think about who you are appointing as a trustee, because selecting a trustee is one of the most important decisions that you can make with regards to that. You've got a couple of different options — you might choose to work with a family member or a friend, which oftentimes makes a lot of sense. It's less expensive than using a corporate trustee, it's someone you already trust, and it's someone your kids know.
But remember that being a trustee, especially of a trust that's worth 10, 20 plus million dollars, is a big job and it is a job. There are legal requirements and there are processes that need to be followed. A huge pitfall that I see over and over is that a family appoints a family member or a close family friend as trustee — which is great — but then that trustee has no idea what they're doing.
They don't know how to be a trustee, they don't know how to manage money, they don't know how to communicate important financial information to trust beneficiaries. And what that leads to as your kid gets older and older is confusion and fear and uncertainty about the wealth that they have. So you wanna choose someone you trust, but you also wanna choose someone who is capable of handling the administrative burden of being a trustee and who's also capable of openly talking to and communicating with your kids about their wealth — and giving them a better idea of how you wanted them to use this money, since you're not there for them.
What Are Powers of Attorney and Why Do Inheritors Need Them?
We've talked about wills, we've talked about trusts, we've talked about the importance of titling your assets in the name of your trust, and we've talked about selecting a trustee. There are other essential pieces of getting your estate plan done. The last two biggest things you need to think about as you're finalizing your estate plan are powers of attorney documents and a medical directive — also called a living will or advanced directive, which are three different names for the same document.
In terms of power of attorney, it's generally a good idea to have several different people named, and this will require separate powers of attorney being drafted for each individual to keep it as clean as possible. The reason for this is that if something happens to your first choice, you have someone else who can be there and who is able to step in.
In addition to having power of attorney drafted, it's also a good idea if you have significant brokerage or bank holdings to get a power of attorney document on file with your broker or with your bank. The reason is because banks and brokerages can be exceptionally difficult when it comes to accepting a power of attorney document — if that power of attorney is too old or if they don't like the language in there, they could reject it. Even though it's a legally sound document, it doesn't require them to honor it, so the best way to make sure that there will be someone to step in and manage your investment accounts and bank accounts is to also have paperwork filled out at your financial institutions that names those same people who can take over if something happens to you.
What Is an Advanced Directive and How Do You Create One?
The last piece I'll talk about is the advanced directive, living will, or medical directive — this is the document that states your medical preferences for the end of your life. This is the easiest by far of the legal documents that you need to create. You can create your own with an attorney, but many states have their own form that you can find by Googling your state's advanced directive, living will, or medical power of attorney.
You can find that form, fill it out, and have it witnessed — and in many cases, you don't even need to have it notarized. And then you know that your medical wishes will be honored if something terrible happens to you.
Ready to Start Your Estate Plan? Here's How to Take the Next Step.
I know estate planning can feel overwhelming. It's terrible to think about our own mortality — no one wants to do it, it's expensive, it's a logistical headache, I get it. But it's also hugely important, and it is the one thing that you can do to make people's lives easier when they're dealing with the terrible grief of you being dead.
If you've listened to this episode and have more questions, I would love to hear from you. You can email me at katherine@sunnybranchwealth.com, find me on Instagram at Sunnybranch Wealth, or if you'd prefer to just follow along with the podcast, I'll catch you on next week's episode of Heir Necessities.
Let’s take the next step together
Understanding how to protect, invest, grow, and/or give away a multi-million dollar inheritance isn’t easy. Inheritors can encounter a wide variety of different situations requiring knowledge and finesse to manage. If you need more help, reach out to Katherine Fox, CFP® and CAP®, financial planner for inheritors, to learn how Sunnybranch can help you evaluate your financial situation and build a plan for your financial future.
