Many Americans Leave Loved Ones Vulnerable, Due to Lack of Estate Planning, New Survey Finds
New York, NY - Press Release - May 24, 2004 - Death and taxes may be life's only guarantees, yet less than one-half of adult Americans are fully preparing for these eventualities.
That's because 58 percent lack a basic will, according to a new survey from lawyers.com, a free online database of 440,000 lawyers from legal publishers LexisNexis Martindale-Hubbell. A will is generally the first document considered in an individual's estate plan.
"An estate plan not only ensures your property eventually winds up where you want it to, but it can relieve your loved ones of the burdens of having to make difficult financial and medical decisions for you, if you're physically or mentally unable to do so for yourself," observed attorney Alan Kopit, lawyers.com's legal editor.
"An estate plan can be as simple as a will, or consist of several additional components, including medical directives, powers of attorney and trusts," added Kopit. "The money and time needed to create one is often minimal, depending on the complexity of your financial condition."
"During a major life change - such as a new marriage or college graduation - an individual should take stock of his or her personal situation, including reviewing his or her estate plan," Kopit continued. "With wedding and graduation seasons currently underway, now is the time for millions of Americans to do just that." Lack of Estate Planning Leaves Loved Ones Vulnerable
Although the majority (58%) of Americans lack a standard will, an even greater number, 69 percent, have no living will or medical directive, the survey revealed. Those documents explain an individual's wishes for receiving medical life support if he or she is terminally ill or permanently unconscious.
Moreover, just twenty-seven percent of Americans have created powers of attorney for healthcare, and fewer, 26 percent, have powers of attorney for finances. Powers of attorney name a person or organization to make healthcare and financial decisions for an individual if that person becomes incapacitated, even if it is just temporarily.
"Without having crucial documents like living wills and powers of attorneys in place, many Americans are leaving their loved ones vulnerable to the heartache - and in some cases expense - of having to make life or death decisions that could easily have been addressed at a time when emotional strain is not nearly so intense," explained Kopit.
A relatively small number, about one-in-five (21%) Americans has created a trust as part of an estate plan.
"In some situations, a trust is the best way to make sure loved ones end up with the largest possible amount of assets intended for them," said Kopit. "By putting property under ownership of a trust, rather than in an individual's own name, heirs avoid probate, a court process for distributing assets that can be costly and time-consuming." Myths About Estate Planning Persist
Twenty-one percent of Americans without an estate plan say their biggest reason for not having one is a lack of sufficient assets. Fifteen percent say they are not old enough.
"It's an absolute myth that age or amount of assets should be the central impetus for making an estate plan," said Kopit. "Even a single, young person with modest possessions may want to control where his or her assets end up. No matter how old you are or what you own, you should ask yourself, 'do I want to control where my assets eventually go, or do I want the state to decide for me?' If you answer yes to the former, you'd be well-served to consult with an attorney to start estate planning."
Among those with estate plans, 25 percent say their biggest motivation for creating one was the arrival of or preparation for children. Only 7 percent were motivated by a significant long-term relationship, such as a marriage.
"Children are an excellent reason to create an estate plan, and no parent should be without one - among other things an estate plan will define guardianship for minor children if something happens to the parents," observed Kopit. "But the arrival of children is not the only life change that should prompt estate planning. Marriage, divorce and a significant change in income are all reasons to create or update an estate plan." Other Survey Findings:
Background and Methodology:
- Many Americans suffer the effects of poor estate planning: Nearly one-in-five (18%) Americans have personally experienced problems after the death or incapacitation of a loved one due to a lack of or improperly prepared an estate plan, including conflicts over asset distribution.
- More minorities lack estate plans than their white counterparts: Just 45% of African Americans and Hispanics have any estate planning documents in place, compared to 57% of white Americans. Only 28% of African American adults and 20% of Hispanic American adults have wills, compared to 46% of whites.
- Americans with estate plans do a good job updating them: Thirty-eight percent say they review or anticipate reviewing their estate plan documents at least once a year, and 22 percent say once every two to three years.
- Death is a taboo topic for some Americans: Nearly one-in-ten (8 percent) of those Americans without an estate plan say they do not have one because they do not want to think about dying or becoming incapacitated.
Harris Interactive®conducted an omnibus study for LexisNexis Martindale-Hubbell. A telephone survey was conducted among a nationally representative sample of 1,009 adults comprising 504 men and 505 women 18 years of age and older, living in private households in the continental United States. Data were weighted to known norms for sex, age, geographic region, and race.
Interviewing for this omnibus survey was completed during the period April 22 - April 25, 2004.
The margin of error for the total sample is plus or minus 3.1 percentage points.
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About Harris Interactive®
Harris Interactive (www.harrisinteractive.com) is a worldwide market research and consulting firm best known for The Harris Poll®, and for pioneering the Internet method to conduct scientifically accurate market research. Headquartered in Rochester, New York, Harris Interactive combines proprietary methodologies and technology with expertise in predictive, custom and strategic research. The Company conducts international research from its U.S. offices and through wholly owned subsidiaries-London-based HI Europe (www.hieurope.com), Paris-based Novatris and Tokyo-based Harris Interactive Japan-as well as through the Harris Interactive Global Network of independent market- and opinion-research firms.