Fewer people are creating estate plans today than in years past. Research shows that, in 2024, less than one-third of Americans report having a will.[1]
Every adult—19 or 99—should have a will at a minimum. Many people can also benefit from estate planning documents such as trusts, powers of attorney, and advance directives. But even if you have created a comprehensive estate plan, it may no longer align with your objectives if it is outdated.
As we get older, we inevitably become more aware of our mortality. Reflections on life and death do not necessarily have to be morbid. They can also prompt us to take actions that focus on our legacy.
This is what happened during the peak of COVID-19. Stuck at home and more mindful of health, Americans turned their attention to estate planning, leading to a surge in the creation of new wills and trusts.
However, that trend has reversed since 2020, and the long-term trend is towards less estate planning.
Caring.com found that, in 2024, 43 percent of adults over age 55 have wills—down from 46 percent in 2023 and 48 percent in 2020.[2] From 2000 to 2020, the share of people aged 70 or over with wills declined from 73 percent to 64 percent, reports the Center for Retirement Research at Boston College.[3]
On the other hand, the number of young Americans who have a will has increased in recent years. However, around 75 percent of 18- to 34-year-olds and 35- to 54-year-olds still do not have one.[4]
Procrastination is the top reason people give for not making a will.[5] Other common excuses are not knowing where to start and concerns about how complicated or expensive estate planning might be.[6]
The reasons why people do not have an estate plan underscore the more significant point that estate planning can often feel overwhelming and unpleasant.
However, not having a plan that addresses what happens to our money and property after our death, who cares for our minor child when we cannot, and who will manage our affairs during an emergency while we are alive, among other concerns, puts loved ones in a difficult position.
Without a plan, your family may have to turn to the courts for answers, which will likely not satisfy anybody. Disagreements can spawn litigation that pits siblings against siblings and squanders money on legal fees.
According to the book Estate Planning for the Post-Transition Period, approximately 70 percent of estate settlements result in asset losses or family disharmony, outcomes the authors attribute to estate planning failures within the family’s control.[7]
An estate plan can fail for many reasons. Some of the leading causes are a lack of follow-through, not informing heirs about the general outlines of the plan, and not updating the plan.
You might, for example, set up a trust to avoid probate or to manage accounts and property for an underage or disabled loved one. Still, suppose you do not follow through by transferring ownership of your accounts and property to the trust or making the trust the beneficiary. In that case, the trust will likely not accomplish your goal of avoiding probate.
Another common mistake is setting up powers of attorney and medical directives, putting them in a drawer or filing cabinet, and not telling anybody about them. These documents authorize others (i.e., “agents”) to act on your behalf. Some may take effect immediately, while others may take effect only when necessary (e.g., during incapacitation). However, these essential tools cannot help you if nobody knows the documents exist and where to find them.
Having an out-of-date plan can result in failures that are on par with having no plan. As life changes, the desired beneficiaries of your accounts and property, guardians for your minor children, and agents during your incapacity are subject to change. An estate plan that does not reflect the latest circumstances and your current wishes could lead to unintended—and potentially disastrous—outcomes.
An old, out-of-date estate plan can leave loved ones grappling with many of the same issues caused by not having an estate plan.
Loved ones may not be adequately taken care of, accounts and property could end up going to inappropriate beneficiaries, your estate may have adverse tax consequences, you may not receive the end-of-life care you want, and your estate could be subject to unnecessary probate proceedings, to name just a few possible consequences.
While there is no fail-proof set of rules for determining when an estate plan should be updated, estate planning attorneys recommend revisiting a plan every few years or when there is a significant change in your life, your family’s life, or the law.
Here are a few signs that your estate plan is outdated:
This list is not exhaustive, but if even one item applies to you, it may be an excellent time to review and update your estate plan.
Agents, beneficiaries, and inheritance amounts and distribution plans constitute the core of your estate plan and should be regularly revisited.
Be sure also to remember other details, such as naming backup beneficiaries, agents, and trustees and adding provisions that allow beneficiaries to replace poorly performing decision-makers.
Short of changing a beneficiary’s inheritance, you can take steps now to prepare them for the financial implications of a bequest. Talk to them about how to handle their gift and ways you might like them to spend it. If you have severe doubts about their financial acumen but still want to provide for them, consider a gift placed in a trust that specifies how the money can be used.
Talk to your loved ones now, while you still can, about the value of your estate and what they can expect to inherit. Transparency will allow them to express their feelings. Tell them about any significant changes to your estate plan that could leave them feeling surprised and hurt, leading to conflict.
Loved ones should also be informed about where vital estate planning documents are kept and how to access them. Depending on where the information is stored, you might have to visit a bank with somebody to access a safe deposit box, give them the code to a lockbox, or let them know your digital passwords for documents stored on a computer or in the cloud. No matter where your records are kept, make sure that your loved ones will have legal access to them after your death. For example, with many banks, a person you designate as being able to access your safe deposit box will no longer have access after your death. Talk to your bank about ensuring your loved ones can access the box’s contents even after death.
Many states allow a copy of a person’s will to be filed with the probate court for safekeeping even during their lifetime. This precaution can ensure access if a key, password, or combination is misplaced or forgotten.
The only constant in life is change. An estate plan you created years ago is unlikely to reflect your present situation and priorities and could be almost as bad as not having one.
While you may be tempted to create and update an estate plan independently, online estate planning tools can be another reason a plan fails, hurting your legacy and burdening your loved ones.
Book a call to ensure your estate plan is done right.
[1] Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited June 26, 2024).
[2] Id.
[3] Jean-Pierre Aubry, et al., Can Incentives Increase the Writing of Wills? An Experiment, Ctr. for Retirement Rsch. at Boston Coll. (Dec. 2023), https://crr.bc.edu/wp-content/uploads/2023/12/wp_2023-27.pdf.
[4] Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited June 26, 2024).
[5] Id.
[6] Id.
[7] Bob Carlson, Most Estate Plans Fail, Don’t Let Yours Be One Of Them, Forbes (Jul. 31, 2020), https://www.forbes.com/sites/bobcarlson/2020/07/31/most-estate-plans-fail-dont-let-yours-be-one-of-them/?sh=60add70d4008.
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