According to a recent study by Caring.com, less than 2 out of 3 American adults have a Will in place. This is the lowest rate reported since 2020.
Why don't more Americans have an estate plan in place? While there are a wide array of factors, some of the most common reasons come down to a lack of information and understanding.
For starters, many individuals without an estate plan have the misperception that they don't need one because it simply doesn't apply to their lives. This implies that they don't understand the wide and diverse benefits that an estate plan can bring.
Second, they also don't quite understand the ripple effect that can come from intestacy -- that is dying without a Will. For those who aren't intrinsically motivated to help themselves, they should at least consider the adverse effects this may cause down the line on others.
Sadly, it's a reality that far too many Americans pass away, leaving their loved ones without the guidance of a Will. While many accurately assume that estate planning is about divvying up assets, what they often don't know is that it's so much more -- it's about shaping your legacy and protecting the harmony and wellbeing of those you leave behind.
This guide will explore the world of Wills and what it means to die without one. Spoiler alert: if you don't want to start a family feud, then dying without a Will is something you absolutely don't want to do.
The Impact of Intestacy
If you've felt like you don't need a Will, then one of the first things that might change your mind is to understand the repercussions that might impact your loved ones.
When someone passes away without a Will, they are said to have died intestate. This means that there are no legal documents in place that can help guide their family members regarding their final wishes. Funeral arrangements, the division of assets and belongings, and issues of guardianship are left a complete mystery.
Each state has a set of intestate succession or intestacy laws that help determine what should happen when there is no Will in place. While these rules provide a safety net, their application is not personalized in the slightest. They do not take family dynamics or the decedent's wishes into consideration.
Here is a short list of possible consequences stemming from intestacy:
Unintended Beneficiaries: Without a Will, your assets may end up in the hands of someone you didn't intend to benefit. This could mean estranged relatives or even the state itself.
Family Feuds: When there is no clear direction on how assets should be divided, it's not uncommon for family members to fight over what they believe they are entitled to.
Complicated Probate Process: Without a Will, the probate process could become drawn-out and expensive as the court tries to determine how to distribute assets without any guidance.
No Say in Guardianship: If you have children under the age of 18, dying without a Will means that you have no say in who will care for them or manage their inheritance.
Increased Stress and Burden on Loved Ones: Losing a loved one is already a difficult and emotional experience. Dying without a Will only adds to the stress, confusion, and burden for those left behind.
According to a recent study conducted by LegalShield, 90% of Americans believe that estate planning is important. However, 58% have experienced family disputes and a loss of control over assets due to either:
A lack of estate planning
Insufficient estate planning
What this tells us is that it's not just enough to have a Will in place, you also need to make sure your estate plan is legally valid and will achieve the desired objectives.
10 Ways Your Estate Plan Can Lead to Family Friction
Referenced above, the LegalShield survey found that a majority of respondents experienced family disputes if a proper estate plan was not in place. Here, the key word is "proper." Even if you have an estate plan in place, it can still lead to family infighting if you're not careful.
Shortly, we'll go over our best practices on how to create your estate plan with the intention of minimizing the risk of family disputes.
First, however, let's look at some examples of what not to do so that you have some ideas on what to avoid:
1. Die without an estate plan: If you pass away without an estate plan, state law takes over. This means your assets will be distributed according to the rules of intestacy, which may not align with your wishes or benefit your loved ones.
2. Making your plan too vague: A well-crafted estate plan should be specific and leave little room for interpretation. Vague language or unclear instructions can lead to confusion and disagreements among your loved ones.
3. Using a generic template: While it may seem convenient and cost-effective to use a generic estate planning template, it's important to remember that every individual's situation is unique. A cookie-cutter plan may not adequately address your specific needs and can result in unintended consequences.
4. Not keeping your plan updated: Life changes, and so should your estate plan. Failing to update your plan after major life events such as marriage, divorce, or the birth of a child can create conflict down the line.
5. Playing favorites: It's natural to have certain preferences or a closer relationship with some family members than others. However, when it comes to estate planning, favoritism can lead to resentment and disputes. Be sure to treat all Beneficiaries justly and as equally as possible.
6. Not including your wishes regarding medical care: While estate planning often focuses on the distribution of assets, it's also critical to include your wishes for medical care in case you become incapacitated. This can help prevent disagreements among family members and ensure that your wishes are honored.
7. Choosing the wrong decision-makers: When selecting individuals to fulfill roles such as Executor or Power of Attorney, it's crucial to choose someone who is responsible, trustworthy, and capable of handling the responsibilities. Avoid choosing someone based solely on their relationship with you or their potential inheritance.
8. Not considering tax liabilities: Estate planning also involves considering potential tax implications for your Beneficiaries. Failing to take these into account can result in a significant decrease in the amount of assets passed down to your loved ones.
9. Not succession planning for your business: For business owners, it's important to have a succession plan in place for your company in the event of your death or incapacity. This can help ensure the continued success and stability of your business after you are no longer able to run it. Not naming a successor can cause your loved ones to fight over the job in your absence.
10. Failing to name a Guardian or Conservator for your dependents: If you have minor children or dependents with special needs, it's more than critical to name a Guardian and Conservator in your estate plan. This will ensure that they are taken care of by someone of your choosing and their inheritance is managed properly.
Keeping the Peace: Do (At Least) These 3 Things When Planning your Estate
While a family feud sounds awful, it doesn't have to be this way. With proper planning and strategy, you can have peace of mind knowing that your loved ones will be cared for with your estate plan in place. To keep the peace amongst your loved ones, do at least these three tasks when planning your estate.
1. Seek legal support
The surest path to creating an estate plan that is legally ironclad is to obtain professional support. Sure, you can write a Will on your own, but you won't be certain that it'll hold up in the court system or achieve the outcomes you want. By working with a professional, you can have assurance that your estate plan is both legally compliant and designed in such a way that your wishes will be honored. Trust & Will's platform is an affordable solution -- our estate plans are built by attorneys and customized by you.
2. Select the right Executor
An Executor is responsible for carrying out the wishes outlined in your Will. It's a big responsibility and should not be taken lightly. Choosing the right person can help prevent conflicts and ensure that your estate is handled smoothly. Be sure to name someone who is trustworthy, organized, and capable of making difficult decisions.
3. Schedule a family meeting
While it may seem uncomfortable or unnecessary, having a family meeting to discuss your estate plan can help avoid misunderstandings and conflicts down the road. This is especially important if you have multiple Beneficiaries who may have differing expectations. Use this opportunity to explain your decisions, address any concerns, and ensure that everyone is on the same page. It can also be helpful to involve a neutral third-party, such as your attorney or financial advisor, to facilitate the discussion and maintain a calm atmosphere.
Disasters of the Rich & the Famous
To help drive home the point of how bad the aftermath can be when an individual dies without a Will, let's go over three celebrity case studies.
1. Prince, the iconic musician, passed away in April 2016 without a Will, sparking a complex legal battle over his estate, valued at an estimated $200 million. His sudden death left no clear directives on the distribution of his vast assets, leading to numerous claims from potential heirs. The Minnesota court system had to step in to divide Prince's estate among his six surviving siblings, a process complicated by the claims of dozens of individuals seeking a portion of the estate. The absence of a Will prolonged the legal proceedings, highlighting the importance of estate planning, even for those with seemingly straightforward familial relationships.
2. Whitney Houston, the legendary singer with an illustrious career, died in February 2012, and while she had a Will, it was outdated, drafted a full 20 years before her death. The Will left her entire estate to her only child, Bobbi Kristina Brown, with no provisions for changes in circumstances that occurred later, including Bobbi Kristina's own untimely death in 2015. The situation underscored the critical need for regularly updating one’s will to reflect current wishes and life situations, ensuring that the estate is distributed according to the most recent intentions of the deceased.
3. Michael Crichton, the best-selling author known for works like "Jurassic Park," died unexpectedly in November 2008, leaving behind a pregnant wife and a complex legal situation. Although Crichton had a Will, it did not mention his unborn child, leading to a court battle over the child’s inheritance rights. The oversight highlighted the importance of considering all potential Beneficiaries, including those not yet born, when drafting a Will. Ultimately, the court ruled in favor of including Crichton’s posthumously born son as a Beneficiary, emphasizing the need for comprehensive estate planning that anticipates future changes in family dynamics.
Don't Start a Family Feud: Get Your Affairs in Order Today
Estate planning is a crucial step for anyone, regardless of age or wealth. It ensures that your assets are distributed according to your wishes and can save your loved ones from unnecessary stress and conflict after you pass away.
The examples of Prince, Whitney Houston, and Michael Crichton may be larger-than-life, but they do highlight the drastic consequences of not having an updated Will. An estate plan means so much more than the "who-gets-what." Really, a Will serves as a navigational compass for your loved ones who are grieving and reeling from loss.
Even if you don't feel confident in your ability or need to create an estate plan, don't procrastinate. If anything, do it for the people that you love. Trust & Will can help you with the rest. First, we'll match you with an estate plan that best fits your needs. Then, you'll answer simple prompts and we'll do all of the heavy lifting for you. All of our estate plans were designed by attorneys, and they're guaranteed to be legally valid in your state. Even better, you'll have a digital copy so that you can easily review your plan and update it as needed. Once you get the ball in motion, you'll feel so much better, trust us! Get your peace of mind with Trust & Will today.
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