D.A. Davidson & Co. recently released survey results revealing that only one in three (34%) American adults has an estate plan. Of those who do have an estate plan, 20% have not updated their plan in the last five years. 72% of women are without an estate plan compared to 59% of men.
At D.A. Davidson, we’re committed to helping you be prepared financially for all of life’s possibilities. For more on our survey findings—and how you can create a thorough estate plan—see below.
37% of respondents reported that they don’t have an estate plan because they feel they don’t have enough money to warrant needing one.
Regardless of your financial status, everyone can benefit from an estate plan. D.A. Davidson’s Director of Wealth Planning Ryan Halleran gives three risks of not having a written plan in place:
- Inadvertently passing your assets to heirs in ways you would not have intended. Without an estate plan, you leave the responsibility of passing your estate through the processes of the court system. This means a court-appointed representative, who may or may not be able to understand you and your family’s dynamics and the best ways to account for them, will decide where your assets go.
- Taxation. Depending on which state you claim primary residency in, your estate may be at risk of losing a significant amount of value due to the state and/or federal estate tax system. A properly structured estate plan can help avoid many pitfalls that those who do not plan fall victim to.
- Family strife. Those who properly plan through an estate plan are more likely to discuss this planning with the family and friends who most commonly make up their beneficiary pool. Without these conversations, oftentimes family members are left to “figure it out,” causing unnecessary stress, arguments and sometimes irreparable harm to those relationships.
32% of Americans don’t have an estate plan because they’ve been procrastinating, and 25% don’t have a plan because they don’t know where to start.
If you don’t know what needs to be done to create an estate plan, according to Halleran, these are the two most important steps you can take to get started:
- Talk to someone you trust. Whether it is a family member, a friend, or a trusted advisor, the easiest way to get started and dispel procrastination is by simply talking to someone. Oftentimes, people think they need more information than they do to create an estate plan. Talking to people who have gone through the process already can help you understand what was involved and what you might need to prepare ahead of time, without worrying about issues that may not be critical to the overall process.
- Find the right attorney. Nothing makes talking about death and taxes more difficult than having to do so with someone who you do not fully trust or enjoy chatting with in the first place. Personality and bedside manner can be just as important as competency and timeliness. If you don’t enjoy talking to your attorney, then you are less likely to ask them the important questions that keep you up at night. Finding the right attorney to work with can make things on the back end much easier.
Less than one-third (30%) of respondents accurately understand what a health care power of attorney is. What is it and do you need one?
A health care power of attorney is a written document in which you designate someone as your representative or agent to make medical decisions on your behalf should you be unable to do so. If no health care power of attorney exists, the law designates the person’s next of kin, and sometimes the complexities of family relationships can complicate matters. It is critical to clarify your end-of-life wishes so they aren’t open to interpretation.
For more information on D.A. Davidson’s estate planning survey, view the full press release here.
This Xcelerant Survey was conducted online by Directions Research. The survey was fielded from September 8-13, 2022 among a demographically balanced nationally representative sample of 2,094 U.S. adults 18 years of age and older.
This material is being provided for educational and informational purposes only. D.A. Davidson & Co. is a registered broker-dealer and registered investment adviser that does not provide tax or legal advice. Information contained herein has been obtained by sources we consider reliable, but is not guaranteed and we are not soliciting any action based upon it. Any opinions expressed are based on our interpretation of the data available to us at the time of the original article. These opinions are subject to change at any time without notice. Copyright D.A. Davidson & Co., 2022. All rights reserved. Member FINRA and SIPC.