Estate planning is important for everyone. It is about protecting yourself, your loved ones, and your hard-earned money (even if you do not have a lot of it). However, the numbers don’t lie: most people don’t see the importance of estate planning. Whether you need to create an estate plan or update an existing one, don’t put it off. The following are some scary statistics about the average American and estate plans. We are committed to working with our clients to ensure they do not become a statistic.
Most People Do Not Have a Will or Trust
Only one in three Americans have a will or trust.[1] This statistic is not surprising due to the amount of misinformation and fear around establishing an estate plan. One in three Americans who don’t have a will or trust believe they don’t have enough money or property to justify having an estate plan.[2] The belief that estate planning is only for the wealthy is just one reason people put off planning; other reasons include being too busy, viewing it as too complicated or expensive, or fear of discussing death.[3] While these may all be valid reasons, the benefits of planning far outweigh delaying the process.
People Do Not Always Tell Others That They Have an Estate Plan
Some people may not see the point in discussing death with their loved ones, but having this difficult discussion can serve several purposes. Surprisingly, 52% of people do not know where their parents keep their estate planning documents,[4] and only 46% of executors (in Maryland, called Personal Representatives) are aware that they are named in someone’s will.[5] It’s important to discuss with your loved ones where your important documents are stored, as they may need to access your original documents for multiple reasons. Additionally, when establishing or updating a plan, you should tell the individuals named in your documents that they have been chosen to serve in these roles. These discussions should focus on what their responsibilities are and highlight your wishes. Some estate planning attorneys offer family meetings after creating an estate plan to educate the individuals named in your plan on the roles they will play.
Conflicts Are Common
According to a survey conducted by LegalShield, 58% of adults in the United States say they or someone they know have experienced familial conflicts due to not having an estate plan or a will.[6] Conflicts can arise from a lack of proper planning. Often these conflicts are related to arguments over how accounts and property should be distributed after a loved one’s passing. You should work with an experienced estate planning attorney to assist in establishing a plan that will reduce family conflicts and disagreements that could end in estrangement.
Now Is the Right Time to Create or Update Your Plan
Proper planning has always been important. American retirees expect to transfer more than $36 trillion to their families, friends, nonprofits, and additional beneficiaries over the next 30 years.[7] This figure indicates an increased need to have a comprehensive financial and estate plan. Now is the time to set your fears aside and begin or continue the planning process so that you can avoid becoming an estate planning statistic. If you or your loved ones have questions about creating or updating your estate plan, please give us a call.
[1] Rachel Lustbader, 2023 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited Oct. 1, 2023).
[2] Id. [3] Abby Schneiderman, The Three Reasons People Avoid Estate Planning (June 24, 2020), https://www.forbes.com/sites/abbyschneiderman/2020/06/24/the-three-reasons-people-avoid-estate-planning/?sh=3f3b19f21d47.
[4] Bridging the Gap: The Importance of Estate Planning Through Generations, Cambridge Trust (Feb. 16, 2022), https://www.cambridgetrust.com/CT/media/CTMedia/Images/Insights/Insight_graphics/Q1-Client-Update-2022-Bridging-the-Gap.pdf.
[5] Id.
[6] Will(ful) Neglect: Survey Reveals Nearly 60% of Americans Unprepared for the Inevitable, Business Wire (Aug. 08, 2023), https://www.businesswire.com/news/home/20230808403417/en/.
[7] 2021 Estate Planning Report, Seniorliving.org (Mar. 16, 2022), https://www.seniorliving.org/finance/estate-settlement-annual-report/.