Research shows fewer older Americans are writing wills, a finding that could be problematic for survivors.
The percentage of households over 70 that have a will or trust to distribute assets after death is Steady decline since mid-2000sAccording to an analysis published in August, Boston University Retirement Research Center. Between 2008 and 2018, that percentage fell from 70% to 63%.
This downward trend reflects the increasing diversity of older America. Older adults are more likely than ever to be black or Hispanic, and these populations are less likely to leave a will or receive an inheritance than non-Hispanic whites.
“When we looked at who didn’t write a will, it was disproportionately non-Hispanic blacks and Hispanics,” said Gal Wettstein, a senior research economist at Boston University.
Although the academic analysis ends in 2018, other research suggests that real estate planning continues to decline.
Percentage of Americans age 55 and older who have a will between 2020 and 2023 Decreased from 48% to 46%according to the 2023 Wills and Estate Planning Survey. caring.com, Nursing care site. The study is based on a representative survey of 2,483 Americans by YouGov.
“There seems to be a tendency to put off writing a will,” says Wettstein. “I think it’s an unpleasant process even under the best of conditions.”
Much of America’s wealth is inherited from everywhere. 15%～46%According to one analysis.
American Dream’:Is it still worth fighting for?
Why is the stock market falling?Dow falls as Treasury yields near highest level since 2007
In a will or trust, a person directs how their property and other assets will be distributed upon their death. When someone dies without a will, the local courts come into play.
And that’s where the problems begin, Wettstein said.
“I’ve seen families break up because of pianos.”
Consider the family home, which is often the most valuable household asset. When the last surviving parent dies, state law generally requires that the home be divided among the surviving children.
“And it’s not easy to split up a house,” Wettstein said.
Survivors may disagree about what to do with the property, such as whether to keep it or sell it, and what to do about maintenance costs and property taxes. The resulting conflict can lead to bitter litigation between the close siblings. Naturally, legal battles will incur legal costs, and the property may end up being sold at a loss.
“You can end up wasting a lot of assets,” Wettstein says.
The same dilemma can arise when dividing a family business or other valuable assets.
“I’ve seen families break up over pianos,” said Ashley Foulkes, a certified financial planner in Hoover, Alabama.
More probate issues may arise in the growing number of non-traditional families in the United States. Many households are headed by single adults, unmarried domestic partners, or grandparents.
State laws often do not cover these scenarios. For example, if one unmarried partner dies, “the state does not necessarily recognize the other as the heir,” Wettstein said.
No one likes to plan their death
Most Americans believe that writing a will is important. Most people plan to avoid it at some point. Experts say procrastination is the enemy of estate planning.
“Some people may not want to think about death because it’s time-consuming and complicated,” said Andrew Herzog, a certified financial planner in Plano, Texas.
Herzog only recently began writing his will.
“I’m married, I have one child and another on the way, so that motivated me,” he said.
Many Americans are motivated to write a will because they are parents. We also took inspiration from news articles that were contested in probate court, such as a lawsuit involving R&B icon Aretha Franklin and multiple handwritten wills, one of which was discovered on a couch cushion. Some people are.
inside caring.com According to the survey, 42% of respondents who don’t have a will blame simple procrastination. 35% said they didn’t have enough assets to bother writing. 15% said they didn’t know what to do. And she said 14% said the process would be too expensive.
“People are really busy, they’re procrastinating, they don’t see a need for it, they think it’s expensive,” Foulkes said.
The coronavirus pandemic has prompted many Americans to write wills, most of them young people. According to the report, the percentage of Americans ages 18 to 34 who reported having a will jumped from 16% in 2020 to 27% in 2021. caring.com report. Curiously, the prevalence of wills in older age groups decreased during this period.
Hiring a lawyer to prepare a will can cost the average American between $1,000 and $2,000, according to financial planners. Online wills are usually much cheaper.
Black and Hispanic families are less likely to have a will
Procrastination and tight budgets don’t fully explain why fewer older Americans are writing wills. These are long-standing concerns.
Wettstein theorizes that the decline in will reflects, more than anything else, the growing diversity of older Americans.
The percentage of Americans age 65 and older who are racial or ethnic minorities is 20% in 2010 24% in 2020according to the Federal Bureau of Aging.
Black and Hispanic families are significantly less likely to have a will than non-Hispanic whites, according to a Boston University study. Other sources agree.
inside caring.com According to the report, 39% of whites report having a will, compared to 29% of blacks and 23% of Hispanics.
“When you look at the Hispanic and African American populations, they are more likely to build wealth later in life,” said Genevieve Waterman, director of economic and financial security at the Financial Services Agency. National Council on Aging. “They’re very focused on building wealth,” she says. That could mean they can’t start drawing up a will.
A Boston University analysis found that black Americans and Hispanics are significantly less likely to receive inherited wealth than whites. The study found that between 1992 and 2018, Hispanics were 23% less likely to receive inherited wealth than non-Hispanic whites with similar socio-economic profiles. Black people were 25% less likely to receive a bequest.
If a person of Black or Hispanic descent inherits, the amount is even smaller. During the years studied by Boston University researchers, black Americans received an average of $75,000 less than non-Hispanic whites. Hispanics’ income decreased by $41,000. This inheritance gap perpetuates and widens America’s historic racial disparities in wealth, the report concludes.
Want to start a family fight?die without will
For some Americans, not having a will is no big deal. For “traditional” families consisting of a never-married couple and their children, state probate laws are relatively straightforward. If you have an investment account or life insurance policy, you can name a beneficiary.
Life insurance details:How to find insurance for a deceased parent
For most other people, estate planning is extremely important, financial experts say.
“At the end of the day, it’s all about advice and having access to good advice,” said Stephen Stanganelli, a certified real estate planner in Amesbury, Massachusetts. “Because migration causes problems.”
