As estate planning attorneys, we encourage people to take the correct actions to protect their loved ones. With this in mind, we are very interested in surveys that are conducted to gauge the estate planning preparedness of American adults.
Caring.com has been compiling statistics on an annual basis. They have released their findings for 2021, and the results are very interesting.
The researchers had a new angle to explore this year because of the COVID-19 situation. They asked respondents if the pandemic had moved them to create wills or trusts.
They broke the respondents up into segments based on their ages. The youngest group is comprised of people that are between the ages of 18 and 34, and 45 percent of these folks answered in the affirmative.
For individuals in the 35 to 54 group, the figure was 35 percent, and 28 percent of people over the age of 55 were motivated by the novel coronavirus. These numbers should be assessed in light of the fact that more people in the oldest age group already had estate plans in place.
This being stated, the overall preparedness among the elders is just 44 percent, which is a steep decline over the 60 percent that had plans in place in 2019.
At this point, the youngest group is more prepared than the 35 to 54 crowd. The survey found that 26.8 percent of 18 to 34-year-olds had plans in place, and this is a nice increase over the 2020 figure of 16.4. For the next oldest group, the preparedness number was just 22.5 percent.
Parents of Dependent Children
It’s good to see some upward movement among the youngest adults, because some people within this group are the parents of dependent children. The same dynamic applies to the 35 to 54 group, but their preparedness has gone from 37 percent to a mere 22.5 percent over the last three years.
A lot of people think that estate planning becomes relevant when you attain senior citizen status, but in a real sense, it is more important for younger adults that have dependents. An estate plan for a young family should include a living trust or a will with the testamentary trust.
The trusts are key, because a trustee would be empowered to manage the assets on behalf of the child. A testamentary trust does not go into effect until the grantor of the trust passes away.
As for funding, in addition to your personal resources, you can carry life insurance that will be sufficient to replace your income. Term life insurance does not have a cash value, but it is very inexpensive for younger policyholders.
An estate plan for a parent of minors should also include a guardian designation, and this is done in a simple will.
The pandemic has killed over half a million people at the time of this writing, and countless others have spent time in intensive care units. This has served as a wake-up call with regard to the value of incapacity planning.
A living will is used to state your wishes with regard to the use of life-support measures like mechanical respiration, resuscitation, and artificial nutrition and hydration.
You can add a durable power of attorney for health care to name someone to make medical decisions on your behalf that are not related to the use of life-support. To give doctors the freedom to share medical information with a representative, you should include a HIPAA release.
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We have developed an estate planning worksheet that you can go through to gain a more thorough understanding of this important process. It is being offered free of charge, and you will come away with a renewed understanding if you take the time to go through it.
To get your copy, visit our worksheet access page and follow the simple instructions.
Need Help Now?
If you already know that it is time for you to work with an attorney to put a plan in place, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 860-548-1000.