Whether it is drawing up a simple will or creating a medical power of attorney, fewer Americans are making estate planning a priority, according to a survey recently released by Lawyers.com.
The percentage of Americans who have estate-planning documents such as wills, trusts or power of attorney dropped to just 51%, according to the survey. In 2007, that number was 64%, reflecting a whopping 13 percentage-point decline. Specifically, 35% of Americans have wills (down from 45% in 2007); 29% have power of attorney for finances or healthcare (down from 46% on 2007); and 18% have a trust (down from 31% in 2007).
The survey stated that the economic downturn might be the reason behind the declines as people are more concerned with immediate needs than planning for the future. Indeed, 71% said that focusing on saving money was more important than the long-term planning of their estate.
People feel “hammered by the markets and the economy and they’re fearful about their job security,” Martin Schenkman, an estate-planning attorney in New Jersey, said. And when people are afraid, they cut back on discretionary expenses, which are how most people view estate-planning services, Schenkman said. (Schenkman is a contributor to On Wall Street and Financial Planning magazines as well as a discussion host on our online discussion boards.)
There is also the “absurd uncertainty” over the estate planning law itself, Schenkman says, which makes people even more inclined to shun the whole idea of how to handle their assets after their deaths.
Still, Schenkman says that this is the time for people to act to take advantage of low interest rates and low valuation of assets. “All cycles are just that, cycles,” he said. “At some point things will come back and at some point the government will decide what it wants to do... and then there will be a deluge [of estate planning business].”
Still, he’s not expecting this deluge of business as soon as things turn around. “Whenever people do feel better, the first thing they’re likely to do is go on a vacation or something, not come and see a lawyer to talk about a will.”
The Lawyers.com survey was conducted in December among a notional sample of 1,022 Americans age 18 or older.