While many people may be getting smarter with their money, investing earlier and taking advantage of compounding interest, the vast majority have no plans for the inevitable. A new study from Western & Southern Financial Group shows that only 25% of the over 1,000 people surveyed had created or recently updated a will.
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Not having a will or other testamentary document can leave your loved ones not only emotionally devastated, but also financially.
How Many People Don’t Have a Will?
According to the new survey, only 1 in 4 respondents had created or recently updated a will. When broken down by generation, baby boomers were the most prepared for the inevitable. Almost half (47%) of baby boomers surveyed reported having a will, compared to 23% of millennials and 20% of Gen Z.
The study also found that 38% of those surveyed had not taken any steps to prepare financially for their own death or the death of a loved one.
Not only had most respondents not taken any steps to document their afterlife wishes, but 30% had not had the conversation with their loved ones.
Why Do People Not Have a Will?
While preparing for post-life has become easier, many people report not wanting to have the conversation in the first place. Over half (54%) of those surveyed reported not having end-of-life discussions because they found the topic uncomfortable, and 34% stated they didn’t know where to start. While many people found the conversations challenging, the reality is that not being prepared can have devastating consequences during an already difficult time.
What Financial Challenges Do People Face After the Death of a Loved One?
Many people do not realize the financial challenges that they could face after the death of a loved one, particularly if it is sudden. When surveyed, 51% said they struggled financially after their loved one died. Funeral and burial costs, along with the loss of the deceased’s income, were the top two unexpected financial obstacles people faced.
The U.S. Federal Trade Commission also noted that loved ones may be responsible for a deceased person’s debts under specific scenarios, including if they cosigned a loan with the decedent or were the spouse in a community property state.
Why Is a Will Important?
Wills or other testamentary documents, such as trusts, can prove critical for loved ones. Dying without a will or intestate means that your assets will be distributed according to your state’s laws. The distribution may or may not be in accordance with what you would have wanted. Without legal documents defining your intentions, the state will decide, as explained by the American Bar Association.
In addition to defining how assets will be distributed, a will can also ensure that debts or other obligations are settled and can minimize tax implications. Importantly for parents of minor children, a will can prescribe who will have guardianship if both parents or guardians are deceased.
How To Get a Will
Today, preparing and executing a will is easier than ever. In many cases, it can be completed online; however, state law may require that the document be witnessed and notarized to be valid. Due to the complexities involved in ensuring the validity of a will, working with a legal expert often proves critical. Some estate planning lawyers offer à la carte services, which help to keep the price more affordable. Since laws vary from state to state, it is recommended that individuals consult a lawyer local to their area when discussing end-of-life planning.
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This article originally appeared on GOBankingRates.com: One Major Money Item Most People Are Missing Could Spell Disaster
