Advice for Seniors and Near Seniors on Estate Planning
The 2021 Wills and Estate Planning Study by Caring.com and YouGov found that, for Americans aged fifty-five and older, the percentage of those with a will has dropped from sixty to forty-four percent since 2019. This decrease is as surprising a statistic as the increase of younger adults who now are sixty-three percent more likely to have a will than in the pre-pandemic years. The study concludes that despite the COVID-19 pandemic, the overall prevalence of estate planning is considerably lower, especially for seniors, than in previous years.
While seniors and near seniors have seen an increase in the need to create a will, there is little follow-through on creating those wills, advanced healthcare directives, and estate plans in general. Two out of three Americans do not have crucial estate planning documents.
Somewhat surprisingly, the report finds that because of the COVID-19 pandemic, younger adults are more likely to engage in the estate planning process than older generations. These same younger adults were also more likely to follow through and create the legal documents.
The study cites four main reasons seniors and near seniors do not have a will and other accompanying estate planning documents. More than thirty-five percent say they just haven’t gotten around to it, and just under thirty-five percent state they do not have enough assets to leave to anyone. The other two reasons are that the individual does not know how to get a will and their estate plan in place or believes it is too expensive to set up. These procrastinations and misunderstandings mean that almost two-thirds of Americans have no estate planning documents. However, the majority of Americans believe you should have a will by the age of thirty-five.
Since the advent of COVID-19, law offices across the country have pivoted to virtual meetings and can even accept verified e-signatures in many circumstances. Creating these legal documents can be made simple and, in most cases, cost-effective. Getting started may be uncomfortable at first because no one particularly likes thinking about their mortality; however, you are likely to experience peace of mind when finished. If you have a spouse and family, they too will be relieved to know the issues are addressed and legal documents are in place.
There are three main estate planning documents you will encounter; wills, advanced directives, and trusts.
Wills – A will is the most common type of estate planning document and dictates several things. It will name a personal representative (executor) to handle the estate, property division, debts, taxes, and guardianships. For some, a will may be all the estate planning needed. However, additional documents such as a trust may be necessary for individuals with more extensive assets or who fear family disputes may impact the will. Dying without a valid will in place is known as dying “intestate,” for which states have laws as to how to proceed. The estate’s assets are frozen while the court assesses details and applies the state laws to disperse the deceased’s possessions. This process can be exhausting and time-consuming for the surviving family. Additionally, a percentage of your estate will pay probate fees, ranging from three to eight percent of the total estate value.
Advanced Healthcare Directives – This document stipulates a person’s desires regarding their end-of-life care or what will happen if they become incapacitated and unable to make decisions for themselves. It will also name a medical power of attorney to act on your behalf. Advanced directives will take effect during a person’s lifetime, unlike a will enacted upon that person’s death. Despite the importance of outlining your wishes for care, the survey finds one in five (eighteen percent) do not know what an advanced healthcare directive is. This directive can guide medical professionals and your family in the event you no longer can. In this age of medical technology that can sustain life more readily, an advanced directive relieves pressure on your family members when it comes time to make difficult decisions such as life support.
Trusts – A trust entity is helpful for several reasons. A trust provides more robust support than a will for individuals with larger estates, more significant amounts of property, or expectations of a disability. Like an advanced healthcare directive, a living trust takes effect upon its creation. As the trust grantor, you will put the desired property in the trust and establish a successor trustee(s). Most living trusts are revocable during your lifetime (meaning you may amend the trust document or what is in the trust) and become irrevocable upon your death. Generally, there are tax and inheritance benefits to having a trust, and the document is not a public record; therefore, your successor trustee can manage your estate privately.
Estate planning documents are more accessible than ever to create and implement in this digital age. Video conferencing and changes in laws and regulations allow you to e-sign and store estate plans online, permitting you to create your plan from the convenience and safety of your own home. By breaking up the process into smaller steps and asking yourself some basic questions, you may find that your estate plan practically writes itself. Think things through, talk things over with your loved ones, and then contact a qualified estate planning attorney. This very achievable goal is more important than ever and easier than you think. We hope you found this article helpful. If you have questions or would like to discuss your legal matters, please contact our office at 352-432-8859 to schedule a consultation.