Less than half of Americans over 55 have an estate plan in place – – which means, even after COVID, the number of households with an estate plan to distribute assets after death has fallen.
People age 35-54 have placed their families and minor children at risk at even higher levels, with only 28 percent having an estate plan. These unsettling numbers are from a survey conducted by caring.com.
According to caring.com, New York is the worst place to die without a will if you have children. Due to complicated guardianship issues, a minor child of the deceased may be placed in a home with a court-designated guardian unless there is a will naming a guardian. If there’s no will, the court decides who will raise the child, and it might not be the person the parents would have wanted.
When someone dies without a will, families must face the grim realities. State law determines what happens to the person’s property when there’s no will. In some states, half their property will go to their spouse and half to the children. The surviving spouse may not maintain their living standard, and there will be nothing they can do. If a child is a minor, the courts manage their finances until they are no longer minors. During that period, the court must approve every expenditure on behalf of the minor and control the investment of the child’s share.
The family home is often the most valuable asset. Generally, this is passed along to children when the last living parent dies, but dividing a house is difficult. Unless the offspring agree to sell the house and share the proceeds, things can get nasty—and court battles are expensive.
The same applies to a family-owned business. If there’s no will and no succession plan, the company’s operation is severely affected. Instead of providing employment or income for future generations, it could be consumed by creditors, sued by customers, and create enormous tax liabilities.
Non-traditional families have become increasingly common across the US, but state inheritance laws don’t cover non-traditional families. Unmarried partners have no legal inheritance rights, no matter how long they have been together or how intertwined their lives are.
Another complication is the number of accounts and assets Americans own and have named beneficiaries. Among these assets are insurance policies, retirement accounts, bank and brokerage accounts. If the wrong beneficiary is listed—an ex-spouse or estranged relative—the asset will go to the person on the beneficiary form, no matter what the will says.
These issues can be resolved with an estate plan prepared by an experienced estate planning attorney. If you don’t have an estate plan, or if you haven’t had your estate plan reviewed in over three years, call our office for an appointment to discuss your situation. Taking steps now to protect your family is always a wise move.
Source: Daily Mail (October 4, 2023) “America’s inheritance crisis: Only 46% of over 55s have a will in place – and experts warn it could be catastrophic for their heirs”