According to a recent study from the Center on Wealth and Philanthropy at Boston College, an estimated $59 trillion will be transferred from 93.6 million American estates between 2007 and 2061. However, there is far less clarity about where those assets are going since those currently holding them can't be bothered to update their estate planning documents or inform potential beneficiaries about their plans.
Little more than half (56%) of American parents have a will or living trust document, according to a Caring.com survey of adult children. Nearly one-third of parents (27%) do not have estate documents in place and 16% of adult children are unsure if their parents do. Of those that do have a will, only 40% have updated it in the last five years. Almost a quarter of adult children don’t know if their parents' will has ever been updated.
Even when parents do have estate documents in place, adult children are mostly uninformed about where the documents can be found and what is written in them. Over half (52%) of adult children don’t know where their parents store their estate documents, while 58% percent don’t know the contents of the documents.
“Wills and estate documents can be a touchy subject, but they are necessary conversations to have,” said Andy Cohen, CEO of Caring.com. “Too often the surviving family members are left not knowing where to find the documents, or worse, have to go through a lengthy and expensive legal process because no documents were ever created.”
Even when a will or a trust is in place, it isn't a given that the assets in it will be distributed smoothly. Attorneys and financial advisors say that wills and trusts are legal minefields that can keep families in courtrooms and at each other's throats for years if they aren't administered properly. We spoke to a team of financial and legal experts about estate planning and discovered that the following five estate planning mistakes are among the most common. If you want to maintain your legacy, but don't want to implode your family in the process, avoid these grave errors: