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Why don’t most people have an estate plan?

On Behalf of | Nov 9, 2023 | Estate Planning

The average American does not have an estate plan. It’s estimated that about 1/3 of Americans have actually created their estate plan. It is a bit more common with older people than it is with younger individuals, but it’s still concerning that most people haven’t made a plan at all.

After all, an estate plan is something that everyone can use eventually. So why is it that people don’t create these plans? What is stopping them?

They don’t realize they need it

In some cases, people honestly don’t think they need an estate plan. They think of writing a will as something that only the wealthy do. They believe they just don’t have enough assets to make it worth their time.

It is true that estate planning for wealthy individuals is important, especially when creating trusts and splitting up financial assets. But even someone without financial assets may have real estate or items with sentimental value. They may also want to use other estate planning tools, like creating an advance directive for future medical care. Estate planning is not just for the rich.

It makes them uncomfortable

In other cases, people know that they need to make a plan, but the topic is just uncomfortable. They don’t want to think about what will happen to the things they own after they pass away because it means facing the reality of their own mortality. But it’s not a good idea to let fear of the unknown prevent the drafting of an estate plan that could be very beneficial for the family.

They plan to do it later

Finally, perhaps the most common reason that people give for not doing their estate planning is that they are going to do it later. They know that they need an estate plan. They know that it’s useful and that it can help them. But they assume that they can do it in 10 years or maybe even in 20 years. Every year that goes by without creating that plan, though, is a significant risk because people cannot predict when they will pass away.

At the end of the day, estate planning is important and should be addressed well in advance. People need to know what legal options they have and what steps to take.