We’ve seen this before and I’m sure we’ll see it again, but a new study shows that nearly 6 out of 10 Americans do not have a Will or other estate planning documents. Even more distressing is the same study shows that just 36 percent of adults with children under the age of 18 have an end-of-life plan in place.
In general, I believe there a three things that keep people from setting up an estate plan: first, most people only deal with things when they become a top priority. Since most people do not believe they will die anytime soon estate planning is rarely a priority; second, most people do not want to think about death and certainly don’t want to plan for it; and third, there are many, many other things people would rather spend their money on than working with a lawyer to plan their death. I mean really, can it get much worse than that? However, having an estate plan not only takes care of your loved ones financially, it can save them a lot of emotional stress both while you are alive and after you’re gone.
The study, which supports some of my beliefs, was conducted in January 2017 by Princeton Survey Research Associates International. They asked 1,003 adults whether they currently have estate-planning documents in case of their death, as well as the reason why not (if applicable).
Forty-seven percent of survey respondents without estate documents said, “I just haven’t gotten around to it.” This is unsurprising to experts, who say an aversion to end-of-life planning is not only rooted in fear but also procrastination.
“This is the ‘I’m going to live forever’ theory. No one literally thinks that, but we all want to believe we are going to live until our 80s or 90s so we don’t think we need a will right now,” says Debbi King, author of “The ABC’s of Personal Finance”. This isn’t true, of course, and no one knows exactly when they will die.
As one might expect, older Americans are the most likely demographic to have an estate plan in place. According to the survey, 81 percent of those age 72 or older have a will or living trust. However, that percentage declines significantly with younger people.
A staggering 78 percent of millennials (ages 18-36) do not have a will. Even more surprising is that 64 percent of Generation X (ages 37 to 52) doesn’t have a will, and nearly half of respondents in the 53 to 71-year-old age group (40 percent) said they don’t have one.
Overall, baby boomers are aware that they should have a will in place, but planning for a possible tragedy is an uncomfortable process that forces people to answer some tough questions. Even in your 50’s you still don’t envision the end of your life, so most continue to put off the process as long as possible.
Also, younger Americans tend to have fewer assets than their older counterparts, which feeds into a false impression that a will is only needed for people with substantial wealth or complex finances. In fact, the survey found that 29 percent of those without a will said it was because they “don’t have enough assets to leave anyone.”
One purpose of a will is to tell a court how to distribute your assets in a special proceeding called probate. The purpose of probate is to give a public notice of death and allow creditors to file claims against the estate. Whatever is left after the creditors are paid goes to the beneficiaries. In the absence of a will, the particular state’s laws of succession direct how property gets distributed. If you don’t have a will, the state has one for you. Would you rather have government officials dictate where your property goes or would you rather decide that for yourself?”