Why People Don’t Plan

by Karen L. Brady

According to a Harris Interactive study done in March 2007 for Lexis/Nexis, 55% of adult Americans don’t have a written estate plan. No will, no trust, nothing in writing. That same study found that a common reason that people didn’t have a written plan was the belief that one didn’t have enough assets to merit an estate plan. Yet this same reason was given by people who had an average net worth of over $1.7 million dollars, according to a study done in 2003 by Charles Schwab.

These studies prompt two thoughts. First: Planning is not about how much you have, it is about what matters to you. If you don’t have a dime, but you have minor children, it’s still wise to have a written nomination of a guardian for your children in case you can’t care for them. If you come from a blended family, second marriage, or have an estranged family member, you probably won’t like what the state has in mind for your assets. So, you shouldn’t be asking yourself whether you have enough, but whether you care enough.

Second: The reason I keep harping on the absence of a “written” plan is that everyone already has an estate plan. The courts, or other functionaries of state law, will name a guardian for your children, appoint a person to handle your estate, and distribute your assets. All of this will be done according to the law’s plan, which may or may not be your plan. So, if you don’t want the state’s plan, you need to have your own — in writing.