Lawyers.com Survey Reveals Drop in Estate Planning By Americans in 2009; Ailing Economy Likely Reason
Only 35% of Americans now report having a will and only 21% have a trust arranged
February 25, 2010 — A new national survey has found that the percentage of Americans possessing estate planning documents such as wills, trusts or power of attorney has dropped considerably to only 51 percent. The survey also suggests that the ailing economy may be the reason for the slide, with three quarters of those surveyed saying the current downturn has made it even more difficult for them to plan for the future, and nearly half saying they are more focused on "the essentials" right now.
The just released Lawyers.comSM Wills & Estate Planning Survey is available at Lawyers.com, the leading online legal website for consumers and small business owners. Conducted by Harris Interactive, the survey compared historical data from earlier Lawyers.com studies conducted in 2004 and 2007 that tracked demand for estate planning documents, and it includes new, updated findings from 2009 that illustrate the change in Americans' views on the topic over the past two years.
"The survey reveals an interesting trend toward sacrificing long-term planning in lieu of meeting short-term needs, which is understandable during a recession, but is a cause for concern if the unexpected were to take place," said Sharon Lubrano, product champion for Client Development at LexisNexis.
Decline in Estate Planning Documents
The percentage of Americans with estate planning documents across all categories (wills/ living wills, power of attorney, and trusts) has decreased considerably since 2007. In 2004, 55 percent of Americans reported having estate planning documents; that number increased to 64 percent in 2007, and declining to 51 percent in 2009. A breakdown of the specific estate planning documents includes:
- Will: 42 percent (2004), 45 percent (2007), 35 percent (2009)
- Power of Attorney (for finances or healthcare): 33 percent (2004), 46 percent (2007), 29 percent (2009)
- Trust (living trust or other trust agreement): 21 percent (2004), 31 percent (2007), 18 percent (2009)
Economic Downturn As Potential Cause
Survey responses indicate that the drop in estate planning documents is partly due to the economic downturn, which has caused Americans to be more concerned with meeting immediate needs rather than planning for the future.
- Seven in ten Americans (71 percent) believe that given today's economy, it is more important to focus on saving money for immediate needs than long-term planning of their estate.
- Nearly three-quarters of Americans (73 percent) agree that the current economic downturn has made it even more difficult for them to plan for their future.
- For Americans who do not have any estate planning documents, 44 percent cite a greater focus on the "essentials" (e.g. paying bills, buying groceries, etc.) as the reason, 31 percent cite it's not a top of mind concern right now, 11 percent don't believe it is necessary and 9 percent believe it takes too much time to create one.
- One in five Americans (20 percent) that do not have estate planning documents report that this is because they believe their spouse and/or children will automatically receive any assets, and 19 percent feel it is too expensive.
"There's a disconnect between public perception of the cost and complexity of creating estate planning documents and the straightforward, affordable choices that are out there for consumers looking to equip themselves with a will and estate plan," said Lubrano. "We encourage consumers to take advantage of the information and resources available at Lawyers.com, that can help them complete a living will and gain the peace of mind that comes from knowing their loved ones and their estate will be protected."
Other Survey Findings
In line with previous waves of the study, when asked the single biggest reason Americans have not created any estate planning documents, nearly one in five (17 percent) claim they do not own sufficient assets to warrant an estate plan. Other reasons cited include:
- They don't want to think about dying or becoming incapacitated: 8 percent (2004), 10