In the wake of the pandemic, rising inflation, mass shooting tragedies, and other events, more people recognize that they need to plan for the future. Yet while financial planning has been at the top of many Americans’ minds, a vast majority of people have stalled in creating an estate plan.
According to a new study completed by Caring.com, a mere one in three people has an estate plan in place. Worse yet, more than 40 percent of those without a will report that they wouldn’t create one until they had encountered a serious health concern.
Why Is It Important to Make an Estate Plan Sooner Rather Than Later?
It is dangerous to wait until you have a health issue before creating an estate plan. Without one, you could potentially lose control over your money, property, health care, and, in some circumstances, the guardianship of your children. In addition, your loved ones may not receive the assets, property, or sentimentally valuable items you would have wanted to pass down to them after your death.
Depending on what health condition or acute injury may unexpectedly befall you, you may be unable to speak, understand others, or advocate for yourself. Part of the purpose of advance planning documents, such as a health care directive, is to maintain your bodily autonomy and express your wishes when you cannot.
Bottom line: The reason for creating an estate plan is to put protections in place not only for you, but also for your loved ones.
Barriers to Advance Planning
Despite understanding the need for estate planning, with 64 percent of people saying they believe it is important, most have not made it a priority. In the 2023 study, Americans reported procrastinating on creating an estate plan for the following reasons:
- 35 percent do not believe they have enough money or assets to leave behind
- 14 percent said that inflation’s negative effect on their assets has made estate or financial planning less of a priority for them
- 15 percent reported that they did not know enough about estate planning, so they felt too intimidated to start
- 42 percent stated they want to begin estate planning, but simply have not gotten around to it
When Should You Create an Estate Plan?
Every American adult should have an estate plan, and it is virtually never too early to go about setting one up.
In fact, once a child turns 18 and legally becomes an adult, they are entitled to make their own decisions regarding their medical care, finances, and education. In gaining legal authority over those parts of their lives, they should consider setting up an estate plan.
For high school graduates, the months prior to moving away to college can be an ideal time to look into getting these kinds of documents in order. At first glance, this may seem overboard to some, but keep in mind the wide diversity of family structures.
For example, perhaps a young person would want their property to go to a younger sibling, rather than a stepparent. Similarly, an individual might want the grandparent who raised them, not a parent, to assume decisions over their medical care in the event of an accident.
In the Caring.com survey, 69 percent of the study respondents said they believe that people should have an estate plan before they reach age 55. Despite that, less than half of Americans 55 and older have at least one estate planning document.
Many Americans Will Wait to Make an Estate Plan Until It’s Too Late
Many Americans are at risk of waiting until their health is compromised to seek estate planning advice or draft any documents. According to the study’s findings:
- 41 percent of respondents said they would not worry about creating a will unless they received a medical diagnosis or had a health scare
- 21 percent would wait until retirement age
- 22 percent said they would not create an estate plan unless they bought a home
- 20 percent want to wait until they are married or have children
- 14 percent would create an estate plan if their employer offered the benefit
Although each of the above reasons may seem valid, it is important to be prepared before any of these life events occur. Otherwise, it may be too late to act.
What Are Some of the Key Estate Planning Documents?
Among the most important documents you may consider securing include:
- a will, through which you can specify who will receive your property and who will become guardians of your minor children after your death
- an advance directive, in which you name a person who will carry out your wishes regarding your medical care if you are incapacitated
- a power of attorney, which gives you the ability to name someone you trust to act on your behalf in certain situations if you are unable to do so
Knowing where to start is intimidating, but help is available. Contact your attorney to get the process started.
Contact a certified elder law attorney(*), such as Linda Strohschein and her team at Strohschein Law Group, for assistance with creating an estate plan that meets your unique wishes. To set up an appointment, contact Strohschein Law Group at 630-300-0627.
This information provided by Strohschein Law Group is general in nature and is not intended to be legal advice, nor does it constitute a legal relationship. Please consult an attorney for advice regarding your individual situation.
(*) The Supreme Court of Illinois does not recognize certifications of specialties in the practice of law and the CELA designation is not a requirement to practice law in Illinois.