The prospect of creating an estate plan can be an intimidating and often frightening one for many people. Nevertheless, having at least a basic plan in place provides you with peace of mind and protects your loved ones. Despite the benefits of estate planning, it appears that less people are creating an estate plan, according to a recent study. Let’s explore the findings of a recent Caring.com study on estate planning.
The Caring.Com Study
Caring.com partnered with YouGov to conduct a survey of 2,400 Americans to determine who is engaging in estate planning, and why or why not. Since 2015, Caring.com has been conducting similar surveys. The most recent survey (2020) shows that fewer people are engaging in estate planning than in prior years. Despite about 60 percent of the participants acknowledging the importance of estate planning, the survey showed a 25 percent decrease in the number of people that actually have a Last Will and Testament or similar document since 2017. A lack of understanding and the perceived cost of estate planning were the two most common reasons given for the absence of an estate plan.
Additional Facts and Figures from the Study
Given the importance of estate planning for the older demographic you might think they would be more likely to have a plan in place. The study, however, indicates that older and middle age adults were 20-25 percent less likely to have a Will or trust than they were the previous year. Ove one in three participants said they simple had not gotten around to creating a Will while almost the same percentage (30 percent) said they did not have an estate plan because they felt they did not own sufficient assets to need a plan. Another 6.8 percent and 6.3 percent of the respondents cited the cost of a Will and lack of knowledge regarding how to get a Will as their reason for not having one.
In 2020, less than one out of every three participants indicated that they had at least one estate planning document in place. Of those who had at least one document, a Will was the most common (23.9 percent). About 13 percent of respondents have a living trust in place while just 6.2 percent have an advance directive.
Among the most disturbing statistics provided by the study are those relating to the age groups that have declined the most in recent years. Although there was an overall decline in the number of people with an estate plan in place, millennials only saw a decline of less than two percent while middle and older age groups dropped sharply. Equally perplexing is the fact that participants in the higher income bracket (over $75,000) a year also saw a steep decline. In 2019, 61 percent of them had at least a Will while just 45 percent indicated that they had at least once estate planning document in the 2020 study.
It appears that cost and knowledge about estate planning also play an important role in who has a plan in place. Compared to 2017, the number of people in the 2020 study who said that they do not have a will or living trust either because it is too expensive to set up or they do not know how to get one increased by 70 percent and 57.5 percent, respectively. Those of Hispanic descent are the most likely to put off getting a will or living trust because they do not know how to start the process.
Please download our FREE estate planning checklist. If you have additional questions or concerns about estate planning, contact us at the Northern California Center for Estate Planning & Elder Law by calling (916)-437-3500 or by filling out our online contact form.