Contemplating your death may not warrant a spot at the top of your priority list — but writing your will does.
About a third, 34%, of people have a will, according to a study by the Center for Retirement Research at Boston College. The survey polled 3,047 respondents ages 25 and up in April 2023.
For those who don’t have a will, 44% say the main reason involves procrastination.
While setting up your will can be a cumbersome task, it’s important because “it’s not just a question about finances,” said Gal Wettstein, a senior research economist at the Center for Retirement Research.
More from Personal Finance:
The 30-year fixed-rate mortgage is a uniquely American construct
How to reduce taxes on your inherited individual retirement account
The great wealth transfer: Why millennials, Gen Z may not inherit much
A will can streamline the inheritance process by making sure your wishes are conveyed and your assets are directed to the people and entities of your choice, especially if your state’s intestacy laws do not fit your needs, experts say.
“This is a cornerstone of financial planning,” said Clifford Cornell, a certified financial planner and associate financial advisor at Bone Fide Wealth in New York.
‘It’s already such an arduous process’
About 79.9% of people said they intend to write a will at some point, according to the Center for Retirement Research report.
Respondents were asked if they would take advantage of a bank offer to write their will (with free legal and financial advice) at the same time as signing a mortgage. Only 71% said yes. If the bank were to throw a $500 incentive on top of that aid, 75.6% would do it.
Researchers believed it would be opportunistic to draft a will while applying for a mortgage because people are already doing a lot of the work they need: filling out forms, signing documents and taking stock of their assets, Wettstein said.
But survey respondents saw that workload as a detriment.
“It’s already such an arduous process that they don’t want to add any more red tape,” he said.
The paperwork isn’t the only reason people fail to establish an estate plan.
About 40%, of U.S. adults say they do not have enough assets to prepare an estate plan or a will, a 21% jump since 2022, according to Caring.com’s 2024 Wills and Estate Planning Study.
The survey of 2,481 U.S. adults of ages 18 and older was conducted in December. That’s a misconception.
“Wills and estate planning are essential for everyone, not just the wealthy,” Patrick Hicks, general counsel of Trust & Will, a digital estate planning and probate platform, said in the Caring.com report.
Not having the proper estate planning documents in place can put your loved ones in a difficult situation in a catastrophic event, Cornell explained.
Without a will in place, state intestacy laws determine who gets what. Dying intestate can also create challenges, with the court left to decide on a guardian for minor children or whether to recognize a domestic partner’s ability to inherit.
“If something ever happens to you, it’s going to be an incredibly stressful time for your loved ones as it is,” Cornell said. “It’s great form to have these documents in place.”
‘A great way to get started’
If you have yet to begin a formal estate plan, “a great way to get started” is by naming beneficiaries in certain retirement accounts like individual retirement accounts or 401(k) plans, Cornell said.
You can also name beneficiaries for life insurance policies, certain bank accounts and other assets.
When you designate a beneficiary for such assets, they pass according to those instructions rather than what’s in your will. And it takes just a few minutes to add or update a beneficiary.
Make sure to review those periodically, especially after a life change such as a marriage, divorce or family birth or death.
For major assets like a house or vehicle, consider how those assets are titled. There are several forms of joint ownership, and those determine how ownership transfers. Assessing that can help smooth out the inheritance of the property when the time comes, Cornell said.
If a house is not set aside in a will or titling, it typically gets divided between heirs depending on a state’s intestacy legislation — and a house is a complicated asset to manage among multiple owners, Wettstein explained.