Estate Planning Benefits Gain Momentum

​Original article appeared in SHRM on September 19, 2023. Click the link to see the article.

Over the past few years, as Amazon considered new benefits to roll out to employees, the company took note of the pain points employees were experiencing and responded with new offerings. Financial concerns due to sky-high inflation led to an emergency savings fund and financial counseling; reports of anxiety and stress resulted in enhanced mental health help, including a new app; and accounts of family stress prompted enhanced scheduling flexibility and parental leave.

Then there were the struggles employees experienced after losing a loved one—not just from grief itself, but from the lack of necessary planning and support that made things even harder after a family member died.

“We’re always working back from our workforce’s needs,” said Lian Neeman, director of global benefits at Amazon. “Our free estate planning benefit is a perfect example of a benefit created from that process. We have a benefit that helps employees after a loved one has passed, or helps loved ones after an employee passes. After evaluating pain points that our employees were experiencing during those cases, we quickly realized that complications often arose as a result of the lack of a will or estate plan.”

Amazon tested the estate planning benefit last year. It was a big success: Nearly 16,000 plans were completed during the monthlong offers in 2022 and 2023, for a total estimated savings of $14 million for employees.

“It went so well that we decided to make it an official part of our benefits program this year,” Neeman said.

The benefit through provider MetLife gives all of Amazon’s U.S.-based employees 30 days of free estate planning each year. Employees can access free digital estate planning tools to create a will, advance directive and durable financial power of attorney. 

Amazon isn’t alone in thinking about estate planning benefits. Although the benefit has been around for a while—usually as part of legal benefit offerings and sometimes life insurance policies—momentum for it is growing, industry experts say.

“We are absolutely seeing an increase in prevalence in prepaid legal estate planning,” said Brian Russell, U.S. voluntary benefits practice leader at Mercer. In general, voluntary benefits are on the rise, he said, with employees increasingly thinking about how to protect themselves against financial uncertainty and to be prepared for the unexpected. Employers are largely obliging.

The share of U.S. employers offering legal benefits—which can include will services—grew 6 percentage points from 2022 to 2023 to reach 42 percent, according to the 2023 SHRM Employee Benefits Survey. 

In addition, employer requests for proposal in legal benefits are up 10 percent year over year, said David MacLean, vice president of strategic growth at LegalShield, a legal services provider. “There’s a lot of indications that growth is happening,” he said.

Meanwhile, estate plans are the most utilized service within a typical legal plan, MacLean said.

“It’s No. 1 by a long shot,” he said.          

Pandemic Is Behind the Growth

The growth of estate planning benefits is driven by a number of factors, notably the COVID-19 pandemic, which has put matters of life and death front and center for many employees.

“With COVID, and with a lot of the unfortunate circumstances that people have gone through, there’s this recognition of, ‘Am I prepared? Is my family prepared? Are we prepared for the future?’ ” Russell said. “So with that recognition, more are on the lookout for benefits and access to services that can better help them be prepared and give them peace of mind.”

MacLean agreed, saying many employers added estate planning benefits as a direct result of seeing how the pandemic was impacting their employees.

For instance, one large employer client of LegalShield got hit particularly hard by COVID-19 in the early days of the pandemic, with several of its employees winding up in the intensive care unit, he said.

“Obviously, it’s tragic on a bunch of levels,” MacLean said. “But the issue was spouses, children, family members were coming to the HR department, finding out how they could get their hands on health care directives, health care, power of attorneys. Any of the documents they need to make critical decisions at this point in time. And people didn’t have them.”

Wills are undoubtedly important, but people often put off creating them, MacLean said. Roughly 6 in 10 (59 percent) of Americans don’t have a will, according to data from LegalShield’s 2023 Estate Planning Survey released for Make-a-Will Month in August. However, according to the July survey of 1,316 adults, of those who don’t have a will, the majority (58 percent) said they would be more likely to create one if their employer offered a legal service to assist them in doing so.

Having employers offer this benefit puts the item that’s on most people’s to-do lists top of mind for employees, just as offering 401(k)s gives employees a reason to prepare for retirement.

“It solves a really big problem,” MacLean said. “A huge reason people don’t seek legal counsel and don’t deal with their will, even though almost everybody knows they need to do it, is because it’s way too intimidating to talk to an attorney. Nobody knows what they charge. Everyone has this image in their mind—as soon as they pick up a phone, the lawyers start the egg timer, and there’s no clarity about it in advance. It’s very daunting.”

Not only are employees more apt to pay attention if their employers offer an estate planning benefit, MacLean explained, but employers are also simplifying the process by offering it.

“All of a sudden, the mystery is gone,” he said.

An Emerging Awareness 

Through estate planning benefits or services through a legal benefit, employees can receive relevant advice and coordination services so they can prepare and coordinate their will and other planning documents. The benefits can be both employer- and employee-paid.

“Too often people think about wills in the sense of, ‘Who gets my silver set or my money when I’m gone?’ ” MacLean said. “But it’s more than that. It’s about who could make medical decisions for you, who will be the guardians of your children.”

There has been a lot more understanding and awareness of those issues due to the pandemic, experts said. As a result, awareness of the benefit is growing, too.

“It’s this awakening that estate planning is not just for 90-year-olds to determine who gets the silverware. It’s for young families, it’s for young people, it’s for nontraditional families. It’s for everyone,” MacLean said. 

The tight labor market and high inflation also are playing a role, with employees clamoring for a bigger array of benefits—especially ones that can offset financial stress—and employers responding.

“Voluntary benefits have gone mainstream; they continue to be table stakes for employees because some of them offer protection against financial shocks and unexpected costs,” Russell said.

But simply offering estate planning benefits is not enough, MacLean said. Employers must also properly communicate and educate employees about them—and not just during open enrollment.

“The big advice I would give to employers is the need to educate employees throughout the year on this topic,” he said. “­­­With employee benefits, most of the communication gets compressed into a two-week window, and in the fall, employees have to make all these decisions. It’s best to tell them about these benefits throughout the year, so they can think about them and be aware. There’s tremendous power in small relatable bites to communicate how plans of this type can help people.”