Estate Planning Trends and Why It Matters

In 2024, less than one-third of Americans report having a will. Every adult—whether 19 or 99—should have at least a will, and many can benefit from additional estate planning documents such as trusts, powers of attorney, and advance directives. However, even the most comprehensive estate plan can become ineffective if it's not up to date.

Decline in Estate Planning

As we age, we become more aware of our mortality, which can prompt us to focus on our legacy. During the COVID-19 pandemic, many Americans turned their attention to estate planning, resulting in a surge of new wills and trusts. However, this trend has reversed since 2020.

According to Caring.com, in 2024, only 43% of adults over 55 have wills—down from 46% in 2023 and 48% in 2020. The Center for Retirement Research at Boston College reports a decline in the number of people aged 70 or over with wills, from 73% in 2000 to 64% in 2020. Although the number of young Americans with wills has increased, around 75% of 18- to 34-year-olds and 35- to 54-year-olds still do not have one. Procrastination, uncertainty about where to start, and concerns about complexity or cost are common reasons.

Common Reasons Estate Plans Fail

Estate planning can feel overwhelming and unpleasant, but not having a plan puts loved ones in difficult positions. Without a plan, families may have to turn to the courts, leading to potential disputes and costly legal fees. Estate plans can also fail if they are incomplete, inaccurate, or outdated. According to Estate Planning for the Post-Transition Period, approximately 70% of estate settlements result in asset losses or family disharmony due to avoidable estate planning failures.

Key Reasons for Estate Plan Failures

1. Lack of Follow-Through: Setting up a trust without transferring ownership of assets to it can negate its benefits.
2. Inadequate Communication: Not informing heirs about the estate plan's general outlines or the existence of powers of attorney and medical directives.
3. Outdated Plans: Life changes can alter desired beneficiaries and agents. An outdated plan can lead to unintended and disastrous outcomes.

Signs Your Estate Plan Is Outdated

An old, out-of-date estate plan can cause many issues, such as inappropriate beneficiaries, adverse tax consequences, and unnecessary probate proceedings. Estate planning attorneys recommend revisiting your plan every few years or after significant life changes. Here are some signs your estate plan needs updating:

• Created between 2018 and 2024 (due to the Tax Cuts and Jobs Act expiration at the end of 2025).
• Changes in who should receive inheritances, the amounts, or conditions.
• New charitable gift intentions.
• Death, illness, or unsuitability of a beneficiary, guardian, or agent.
• Family members suggesting they might challenge your will.
• Strained relationships with family members.
• Concerns about protecting a beneficiary's inheritance from external threats.
• Recent changes in marital status or the birth of a child.
• Significant acquisitions or disposals of assets.
• Purchase of new property.

Keeping Your Estate Plan Up-to-Date

Regularly revisit key aspects of your estate plan, including agents, beneficiaries, inheritance amounts, and distribution plans. Ensure that you also:

• Name backup beneficiaries, agents, and trustees.
• Add provisions allowing beneficiaries to replace poorly performing decision-makers.
• Prepare beneficiaries for the financial implications of a bequest.
• Inform loved ones about the value of your estate and significant changes to your plan.
• Provide access to vital estate planning documents.

Making Changes the Right Way

Life constantly changes, so an estate plan created years ago may no longer reflect your situation and priorities. While online estate planning tools are tempting, they can lead to ineffective plans that harm your legacy. Ensure your estate plan is accurate and up-to-date by consulting with our estate planning attorneys. Contact us to schedule an appointment and protect your future.