Since 2008, the third week of October each year has been designated as National Estate Planning Awareness Week (October 21–25 in 2019). The purpose of this event is to help educate the public about what estate planning is and why it is so important to their financial wellbeing and to the wellbeing of their families after they’re gone.
According to a 2019 caring.com survey1, 57 percent of U.S. adults do not currently have estate-planning documents, such as a will or living trust, although 76 percent of respondents said that having a will was important. Whether or not someone has a will seems to vary significantly by age, with younger individuals being the least likely to be prepared in the event of a premature death.
Percentage of adults without a will:
Ages 65+ 34%
Ages 45-54 61%
Ages 35-44 66%
Ages 18-34 82%
So what is estate planning and why is it so important?
Estate planning is the process of outlining today how you want your assets to be managed and transferred after your death. In your estate plan, you designate who should receive which assets and when they should get them. You choose who you want to make financial and medical decisions for you if you are unable to do so yourself and who should care for your minor children when you’re gone. You can include provisions to help minimize estate taxes and other settlement expenses and provide guidance to your family about your wishes for your funeral, burial, or end-of-life care. For a business owner, estate planning also includes succession planning — who will take over your business, when, and how. You identify the best person to take over when you are ready to retire or involuntarily leave the business due to death or disability. You decide if your successor will buy the business from you (or your estate) or, in the case of a family member, inherit it. You can help to diminish family conflict by creating a plan that equalizes shares of your estate between family members involved in the business and those who are not. A complete estate plan may include a wide range of documents, including a will, trust, financial power of attorney, medical power of attorney and living will, and for business owners, a funded buy-sell agreement.
Why do so many people not have an estate plan in place? In the caring.com survey1, individuals cited a variety of reasons for not having a will, the most common (54 percent) being that they “just hadn’t gotten around to it.” Other reasons included not having enough assets to leave to someone to make it worthwhile (24 percent), perceived cost of the planning (6.5 percent) and not knowing how to do it (6.5 percent). Wills are not just for the rich or individuals with a certain amount of assets. Anyone who wants to have a say in their financial and health care decisions, or hopes to take care of family members, employees, or other individual who are important to them, would benefit from estate planning.
Don’t jeopardize your family’s financial future or create unnecessary difficulties by not having an estate plan. If you already have a plan in place, make sure it is up to date and continues to reflect your wishes. Not sure where to start? Talk to your Federated marketing representative for a referral to an independent attorney who specializes in estate and business succession planning and can help you get the process started.
Some of the products and services referenced herein are provided by third parties wholly independent of Federated with the understanding that neither Federated nor its employees provide legal or other expert advice.
1“2019 Survey Finds That Most People Believe Having a Will Is Important, but Less Than Half Have One.”https://www.caring.com/caregivers/estate-planning/wills-survey/. Accessed October 2019.
This article is for general information and risk prevention recommendations only and should not be considered legal, coverage, financial, tax, or medical advice. The information may be subject to regulations and restrictions in your state. There is no guarantee following these recommendations will help reduce or eliminate losses. The information is accurate as of its publication date and is subject to change. Qualified counsel should be sought regarding questions specific to your circumstances. All rights reserved.
Published Date:October 14, 2019
Categories: It's Your Life