The website Caring.com has been conducting estate planning preparedness surveys over recent years, and the 2022 figures have been released. As usual, the news is not good, and we will look at some of the details in this post.
Two Out of Three Adults Do Not Have Wills
The survey found that 33.1 percent of American adults have wills or trusts in place. This is almost exactly equal to the 32.9 percent that were prepared last year.
You might think that a pandemic would have significantly increased the preparedness levels, but this is simply not the case in two of the three age groups that they studied. In 2022, 27 percent of people between 35 and 54 had plans in place, and the figure is 45 percent for those that are 55 and older.
These numbers are very similar to the last two years, but the youngest group between 18 and 34 years of age did make a significant move forward, and the pandemic was a part of it. In 2020, just 16 percent of folks in this group had wills, and it is now 24 percent.
Reasons Cited
Researchers asked unprepared respondents why they did not have estate plans, and 40 percent said they just hadn’t gotten around to it. One third stated that they did not act because they don’t have enough property to pass along to their loved ones.
Others had no plans in place because they are harboring misconceptions about estate planning. It is simple to get a will or trust if you work with an attorney, but 12 percent said that they did not know how to go about it.
There is also the idea that it is too expensive to put an estate plan in place, and this belief was harbored by 13 percent of participants. In fact, most of our clients are pleasantly surprised when they hear about the fee that is involved, so expectations should not be exaggerated.
Importance of Estate Planning
A lot of people think of estate planning as something that is only relevant to senior citizens. Yes, the overall life expectancy is about 78 years, but people of all ages pass away every single day.
When you have children depending on you, estate planning becomes an absolute must. You have to designate a potential guardian for the children in a simple will, and you have to address the matter of income replacement.
Life insurance is a widely embraced solution, and term life insurance is inexpensive for relatively young adults. Of course, children cannot handle their own money, and this will impact the logistics.
You can use a revocable living trust as the centerpiece of your estate plan. While you are living, you would be the trustee, so you would maintain control of the assets. The successor trustee that you name would manage the trust after your passing.
They would be empowered to control assets on behalf of a dependent child if it ever becomes necessary. Another option is a testamentary trust, which is a trust that is contained within a will, and it would be created after you pass away.
Your estate plan should also address end-of-life eventualities. A living will is an advance directive for health care that is used to record life-support preferences in a legally binding matter.
To account for medical decision-making that is not related to life-support utilization, you can name an agent in a durable power of attorney for health care. If you have a living trust, you can name a disability trustee to administer the trust in the event of your incapacity.
Your plan should include a HIPAA release to give your agent and anyone else that you choose the right to access your medical records. In fact, if you have young adult children, their doctors would not be able to share medical information with you unless one of these forms has been executed.
Schedule a Consultation Today!
Today is a day for action if you are going through life without an estate plan. There are different approaches that can be taken, and there is no one-size-fits-all plan that is right for everyone.
Personalized attention is important, and this is what you will receive when you choose our firm.
You can schedule a consultation at our Burbank, CA estate planning office if you call us at 818-937-2335, and you can use our contact form to send us a message.
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