We pay close attention to the surveys that measure the estate planning preparedness of people in the United States. Caring.com has been conducting annual studies, and they have released the figures for 2021.
The Impact of the COVID-19 Pandemic
There are events that remind us that people pass away at all ages, and tragedies can strike iconic figures with invincible personas. The Kobe Bryant helicopter crash would certainly fit into this category, and the relatively young former Zappos CEO Tony Hsieh passed away last year.
These are isolated incidents that do not stay in the minds of the masses, but the COVID-19 pandemic is in an entirely different category. Millions of ordinary people have been affected, and in addition to the fatalities, many survivors have spent time in intensive care units.
This year, the researchers asked people if they were motivated to put plans in place because of this threat. Surprisingly, the youngest group was the most proactive. The survey found that 45 percent of individuals between the ages of 18 and 34 put plans in place as a response to the pandemic.
To put this into perspective, 35 percent of people in the 35 to 54 group were spurred on by the pandemic, and the figure was 28 percent for respondents 55 years of age and older.
The percentage of people who have wills or trusts in place has been declining rather significantly over the last couple of years, but younger folks have turned it around. In 2019, 18 percent of people in the youngest age group said they were prepared, and the number is now 26.8 percent.
Individuals in the middle group have gone from 37 percent who said they were prepared in 2019 to 27.2 percent last year, and this year just 22.5 percent of them say they have taken the appropriate actions. For the 55 and up group, the figure has gone from 60 percent two years ago to a mere 44 percent in 2021. Some of this has resulted from a change in people’s views of what it means to be prepared.
Parents of Dependent Children
It is natural to think that estate planning is more important for older individuals because it is more likely that they will pass away. This makes sense on the surface, but there is another level to consider.
The children of senior citizens are adults in their own right, and they are not relying on their parents for everything. On the other hand, the parents of dependent children are typically in their 20s, 30s, and 40s. Parents that are rolling the dice without estate plans are putting their families at risk.
An estate plan for a young adult with responsibilities to others should address income replacement. Life insurance is a logical choice, and term life is surprisingly inexpensive. You can obtain the insurance with an amount of money each year that you won’t even notice, and your loved ones will be protected.
Consequences of Intestacy
If you pass away without an estate plan, the probate court would step in to administer the estate. In many instances, intestacy cases are hard to untangle, and the process can be time-consuming and expensive.
Eventually, the assets will be distributed under the state intestate succession laws. Under these circumstances, there’s a good chance that the assets would be distributed in a manner that is not consistent with your true wishes.
An estate plan should also include an incapacity component, and there are consequences of inaction on this level as well. If you do not express your life support preferences in a living will, your next of kin could be forced to make this agonizing decision without any input.
The situation is similar when it comes to medical decisions that are not related to life-support, and family members can have different opinions. Plus, if there is no incapacity plan, the state could be forced to appoint a guardian to act on your behalf if you experience cognitive impairment.
There are documents you can execute to proactively address these eventualities. You can state your life support preferences in a living will, and you can use durable powers of attorney to name agents to make medical and financial decisions on your behalf.
Schedule a Consultation Today!
We are here to help if you are ready to work with an attorney to put an estate plan in place. You can schedule an appointment at our Ashland, Kentucky office if you call us at 606-324-5516; our number in Florence, Kentucky is 859-372-6655.
Our Charlotte, North Carolina and Huntersville, North Carolina locations can be reached at 704-944-3245, and you can use our contact form if you would like to send us a message.