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Report: The Current and Future State of Estate Planning

  • December 6th, 2023

Estate planning advisor working with Boomer couple.Over the next two decades, experts foresee Baby Boomer households transferring more than $84 trillion in generational wealth. Amid challenging economic times, it is more important than ever to protect your assets for yourself and your loved ones. Without a well-crafted estate plan in place, you may be putting your legacy at unnecessary risk.

In a survey published this past fall, more than 1,000 participants aged 18 to 99 shared insights on their estate plans – or lack thereof. In fact, more than half said they have not consulted an estate planner regarding a trust or will.

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Many respondents reported that they did not feel adequately informed about how to get the most out of their estate plan. The results also showed that it may be time to revamp people’s understanding of what estate planning is and how it works.

Misconceptions About Estate Plans

Ideas about legacy planning, the survey findings suggest, are ripe for change.

For one, households with higher net worth were more likely to have an estate plan in place. Among households worth more than $1 million, 77 percent report having an estate plan, will, or trust in place. In contrast, just 36 percent of households with a net worth under $1 million have a legacy plan. Yet, as the report emphasizes, “everyone, regardless of wealth, needs to have a well-structured estate plan.”

In addition, the results highlight the common fallacy that creating an estate plan is a one-and-done undertaking.

In reality, any number of life changes should prompt you to create or revisit your estate plan. Significant life events can include remarrying, relocating to another state, welcoming a child or grandchild into the family, or losing a spouse. At the same time, note that estate planning documents can become out of date over time as laws change. So, it’s still good practice to revisit your plan with an attorney every few years.

The survey also asked respondents to list life events that would prompt them to seek out the help of an estate planner. Participants cited a change in personal health as the top reason they would work with an advisor to start or revamp their estate plan. However, it can prove harmful to wait until you are sick to create your estate plan. To protect yourself as well as your loved ones, It’s best to prepare your legacy plan ahead of any potential crises.

Highlights From the Survey

Participants answered various questions regarding estate planning issues. Survey questions and respondents’ answers included the following:

Do your parents have an estate planner?

Three-quarters of survey participants whose parents had an estate planner said they had executed an estate plan, will, or trust for their own household.

As one may expect, people belonging to the Baby Boomer or older generations were the most likely to have completed an estate plan. However, having parents who had used an estate planner was even more likely than one’s age to correlate with putting a legacy plan in place.

Household wealth also seems to make a difference in this regard. For example, all survey participants worth more than $25 million said their parents had an estate planner. Among respondents in the Millennial generation, 87 percent of those with this level of ultra-high-net-worth estate said their parents had a financial advisor or estate planner. In contrast, 32 percent of Millennials with less than $1 million said their parents had one.

One of the implications here, the report suggests, is that estate planners should ensure they are making meaningful connections not just with their older clients, but also their heirs, particularly as the so-called “great wealth transfer” to the next generation gets underway.

What external factors are most likely to increase the likelihood of you creating or redoing your estate plan?

Most respondents cited changes in tax policies (30 percent) or inflation rates (29 percent). Those who are part of the Baby Boomer or older generations were the most likely to say tax policy would prompt them to rework their estate plan.

Others said they believe that changes in federal interest rates, stock market fluctuations, and student loan forgiveness would serve as the top external factors driving them to create or revisit their estate plans.

What do you think is the most damaging result of a poorly planned estate strategy?

Respondents were aware that bad estate management could be detrimental to their families and their legacies. Nearly a third of respondents stated that leaving their loved ones without sufficient assets would be the most damaging result of a poorly executed estate plan. Another 27 percent believed a bad estate plan would cause the most damage by sparking conflict among their heirs.

Do you have a plan for protecting your digital assets?

A major topic in the evolution of estate planning is ensuring that you protect your digital assets. This can include anything from your digital photo albums and social media accounts to your online account passwords.

When asked whether they had a plan for their digital assets, participants revealed the following points:

  • More than half – 58 percent – had no plan for their digital assets.
  • Baby Boomers were the least likely to have a plan for their digital assets.

As the report indicates, traditional estate plans likely do not include a provision for such digital assets as airline miles, credit card reward points, cryptocurrency, and log-in credentials. Be sure to ask a qualified estate planning attorney about how best to protect these types of assets.

The Current Estate Planning System Is Not Serving the Less Wealthy

Perhaps one of the more striking findings of the survey is that the current estate planning system is not serving people with less money.

The survey found that, among participants, families with estates valued at less than $1 million tend to have less information about the estate planning process and a lower tendency to create an estate plan and keep it updated. In fact, of households with a total net worth under $1 million, 64 percent report not having an estate plan in place.

For the sake of your loved ones, take the time to prepare your legacy plan with a professional. A well-executed plan can help minimize family conflict as well as offer you peace of mind. It can also ensure that the individuals you love most receive your assets according to your wishes. Simply put, it may prove to be one of the most valuable gifts you leave behind for your heirs.


Created date: 12/06/2023
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