2023 Wills and Estate Planning Study
Caring.com’s 2023 Wills Survey Finds That 1 in 4 Americans See a Greater Need for an Estate Plan Due to Inflation
Written By: Rachel Lustbader, Staff Editor
What You Should Know:
- 1 out of 4 Americans say inflation has caused them to see a greater need for estate planning.
- Younger Americans are 63% more likely to have an estate plan than in 2020, and more than 1 out of 3 say that inflation has caused them to see a greater need for an estate plan.
- 1 out of 4 Americans without a will say nothing would motivate them to get one, and more than 40% say they won’t bother until their life is in danger.
- 2 out of 3 Americans do not have any type of estate planning document.
With inflation increasing by 6.5% in 2022 and the cost of necessities like fuel increasing by a staggering 42%, financial planning is more important than ever. While most Americans plan for retirement, many neglect another crucial aspect of financial planning – end of life or estate planning. Although about 6 in 10 Americans have a retirement account, only 1 in 3 have an estate plan according to Caring.com’s 2023 Wills and Estate Planning Study.
“Estate planning is one of the crucial elements of a comprehensive financial plan, but somehow is also the most overlooked component, with the majority of adults not having any form of estate planning document,” says Patrick Hicks, General Counsel and Head of Legal at Trust & Will. “Having an estate plan is a continuation of financial planning and essential to ensure that your efforts to provide for your loved ones last into the future and act as a foundation to build multigenerational wealth and leave a legacy.”
Though the rate of Americans with an estate plan remains relatively low, more Americans are starting to realize the importance of estate planning, partially driven by inflation. In fact, 1 out of 4 Americans said that inflation caused them to see a greater need for estate planning. Overall, 64% of Americans think having a will is important, yet only 34% of Americans have an estate plan.
“Although estate planning is increasingly recognized as an important process, some may hesitate to take action due to the perceived discomfort and difficulty associated with estate planning,” explains Hicks. “Many fear it to be emotionally challenging or uncomfortable and choose to put off the process to be completed at some later time. Others expect estate planning to be complex, expensive, and time-consuming, unaware that modern online tools can simplify the process and minimize expenses. It is important to acknowledge the emotional challenges, but it is also essential to recognize that many of the fears do not reflect the reality of estate planning. With expert guidance and modern tools, creating an estate plan can be a manageable and straightforward process, and the peace of mind it provides is invaluable.”
To help shed light on the importance of estate planning and the feelings towards the process, Caring.com once again partnered with YouGov to survey 2,400+ American adults to find out who’s engaging in estate planning and identify the reasons why or why not. Since 2015, Caring.com has conducted annual surveys to raise awareness about the importance of estate planning – especially for those who have not created an estate plan. Read more about our methodology here.
The 2023 Wills Survey found that overall, 3% more Americans have an estate plan than in 2022 (from 33% in 2022 to 34% in 2023). Young adults have seen a significant rise in rates of estate planning over the last several years – 63% more young adults (18-34 year-olds) now have estate planning documents than in 2020, and young adults are now almost as likely as middle-aged adults to have a will. But, many others are still putting it off – 42% of Americans haven’t created a will due to procrastination, and more than 1 out of 3 people without a will say they don’t have enough wealth to leave behind.
Inflation’s Impact on Estate Planning
More Than 1 Out of 4 Say That Inflation Has Caused Them to See a Greater Need for an Estate Plan
With inflation impacting almost everyone’s lives, more people are thinking about their financial futures. For 26% of American adults, this means taking estate planning more seriously than they did in the past.
In many cases, this is due to growing concern about their loved ones’ financial futures. 19% of survey respondents said that they now see a greater need for estate planning because they worry about the impact of inflation on their heirs’ financial futures. For others, the impact of inflation on their assets is the driving factor. More than 1 in 10 said that the reason for their changing views on estate planning is the increased value of their assets, such as real estate.
On the other hand, 9% of Americans said they see less of a need for estate planning now because inflation reduced the value of their assets, and another 7% said they see less of a need for a will because they had to sell off many of their assets due to inflation.
Half of Younger Americans Say Inflation Has Impacted Their Views on Estate Planning
The impact of inflation on estate planning varies dramatically between different age groups. Half of young Americans said inflation changed their view on estate planning, while only 32% of Americans aged 55 and older said their views have changed.
Young people were 43% more likely than older adults to say they think estate planning is now more important, and 67% more likely to say they think it’s less important. Older adults notably have an overall higher rate of individuals with estate plans, so it’s possible this group wasn’t as swayed by inflation simply because they already had an estate plan.
Black Americans 34% More Likely Than White Americans To Say that Inflation Has Impacted Their Views on Estate Planning
Black Americans were more likely to change their views on estate planning due to inflation than both White and Hispanic Americans. 51% say that inflation changed their opinion on estate planning, while only 37% of White Americans say inflation impacted their views – a 34% difference.
When looking specifically at Americans who now see a greater need for an estate plan due to inflation, there is a 33% difference between Black and White Americans (35% and 25%, respectively) and a 26% difference between Black and Hispanic Americans (35% and 27%, respectively).
The Prevalence of Estate Planning in 2023
The Number of Americans With a Will Has Increased by 3% Since 2022
While still only about a third of Americans have an estate plan (34%), the number of people with an estate plan has increased by 3% since 2022 and 6% since 2020. However, this is still significantly lower than ideal, and survey respondents agree with nearly 2 out of 3 stating that having a will is very or somewhat important.
“The number of Americans who lack a will is troubling,” says Hicks. “Not having a Will can create burdens for loved ones with no clear path to resolution. I believe every adult should have an estate plan and I hope we soon see the majority of Americans have a plan in place. That starts with knowledge and understanding the importance of having a plan in place.”
17% Fewer Hispanic Americans Have a Will Than in 2023
Of the three largest population groups in America, Hispanics are the least likely to have a will, with only 23% saying they have an estate plan in 2023. This is a 17% decrease since 2022 and a 39% decrease since 2021 when the rates of Hispanic Americans with a will reached its peak of 32%. In the same time period, the rate of White Americans with an estate plan increased by 11%, and Black Americans with an estate plan increased by 3.5%.
This decrease in rates of estate planning among Hispanic Americans could be tied to inflation. Hispanic Americans were 39% more likely than White Americans and 6% more likely than Black Americans to say that they now see less of a need for estate planning due to inflation reducing the value of their assets and/or forcing them to sell their assets.
Young Adults Nearly as Likely to Have a Will as Middle-Aged Adults in 2023
While older adults aged 55 and over are still the most likely age group to have a will or an estate plan (46%), the rates of estate planning among young adults and middle-aged adults are leveling out. In 2023, 26% of Americans aged 18-34 and 27% of Americans aged 35-54 have an estate plan, a difference of only one percentage point. In 2020, the difference between the two groups was 11 percentage points.
While the rate of middle-aged adults with a will has remained flat since 2020, the rate of young adults with an estate plan has increased by 63% (16% in 2020 vs 26% in 2023). The coronavirus pandemic had a significant impact on young adults’ rate of estate planning, with the number increasing by 69% between 2020 and 2021. Though the rate went down slightly in 2022 (27% in 2021 to 24% in 2022), the bounce back this year may be reflective of the impact of inflation on estate planning among young Americans.
8% Fewer Lower-Income Americans Report Having a Will Than in 2022, and 1 out of 3 Say That Nothing Would Motivate Them to Get One
As in past years, Americans making $80,000 or more are the most likely to have an estate plan, with 49% reporting having one. Americans making less than $40,000 are the least likely to have a will, at a rate of 22%. This makes the wealthiest Americans more than twice as likely to have an estate plan compared to lower-income Americans.
While the rate of the wealthiest Americans with a will has steadily increased year after year, 8% fewer lower-income Americans report having a will compared to 2022, and the number is down 12% since 2020. The most common reason cited among this group for not having an estate plan was not having enough assets to leave to anyone (45% of respondents), so it’s possible that inflation has exacerbated the problem and led to fewer lower-income Americans choosing to create an estate plan. Some others may just not see the need, with 1 in 3 Americans making less than $40,000 saying nothing would motivate them to create an estate plan.
Americans With Postgraduate Degrees Are Less Likely To Have A Will in 2023 Than They Were in 2022
Americans with postgraduate degrees remain the most likely to have an estate plan, but the number is decreasing. In 2022, 54% of Americans with postgraduate degrees had an estate plan, while in 2023, the rate is 50% – a 7% decrease.
Meanwhile, the rate of Americans with bachelor’s degrees who have an estate plan increased by 15% since 2022, and rates among Americans with associate’s degrees or who attended some college saw a moderate increase of 3%. Estate planning among Americans who did not attend any college remained stable from last year.
Barriers to Estate Planning
More Than 1 out of 3 Americans Without a Will Say They Don’t Have Enough Assets to Leave Behind
As in 2022, procrastination is the main reason people say they don’t have a will, with 42% of people saying they simply haven’t gotten around to creating their estate plan. An additional 35% of Americans say they don’t have an estate plan because they do not have enough assets to leave anyone, a 6% increase from 2022. This shows that while inflation is influencing some people to see estate planning as more important, it can be a significant barrier for others. In fact, 14% of Americans say that inflation has caused them to see less of a need for estate planning due to its negative impact on their assets.
The other top barriers to estate planning are not knowing how to create one (15%), the cost of creating an estate plan (14%), and not having anyone to leave assets to (8%).
Wealthiest, Highest-Educated Americans Are Most Likely to Neglect Estate Planning Due to Procrastination
People in different income brackets often have different reasons or excuses to forgo estate planning. This is especially apparent when looking at the top two barriers to estate planning: procrastination and a lack of assets.
More than half (54%) of Americans making $80,000 or more cited procrastination as their primary reason for not having a will. Meanwhile, Americans making less than $40,000 were most likely to say that they didn’t have enough assets to leave to anyone, with 45% of lower-income Americans citing this as their main barrier to estate planning.
As with the wealthiest Americans, those with postgraduate degrees are the most likely to say they simply haven’t gotten around to estate planning. 60% of respondents listed this as their primary reason, and this group was the least likely to cite a lack of assets as a reason to not get a will, with only 26% giving this response. Compared to Americans who did not attend any college, those with a postgraduate degree are 55% more likely to cite procrastination as the main barrier to estate planning and 32% less likely to cite a lack of assets.
More Than 40% of Those Without a Will May Be Waiting Until It’s Too Late
When Americans who do not currently have a will were asked what would motivate them to create an estate plan, 41% cited a medical diagnosis or health concern. But waiting until a health problem arises may mean waiting until it’s too late if you become too sick to create an estate plan or run out of time.
“One of the most important functions of an estate plan is to specify preferences in advance for what should happen if you are alive but incapacitated or unable to communicate,” says Hicks. “The critical piece is to act in advance of having a medical need. By the time you need an estate plan, it is often too late to create one. Acting too early is not a concern, but acting too late can leave you unprotected and place your family members or caregivers in a difficult position without any authority or direction from you.”
Other common reasons that Americans without a will said they would be motivated to get one include the purchase of a home (22%), retirement or another age-related milestone (21%), and family expansion like marriage or the birth of a child (20%). 14% said they would be motivated to create an estate plan if it were offered as a benefit by their employer. Still, almost 1 in 4 Americans without an estate plan said that nothing would motivate them to create one.
Why Americans Are Getting Wills
Men Much More Likely to Cite Media and Current Events as a Motivation to Create A Will
The most common motivations Americans cited for creating an estate plan are retirement (28%), the death of a loved one (26%), and family expansion (22%). Additional reasons include a medical diagnosis (17%), an employer benefit (11%), national or world events (10%), and media or online coverage (10%).
The survey showed some stark differences between the motivations of men and women to create an estate plan. Most significantly, men are 95% more likely to say media or online coverage motivated them to get a will (14% vs 5%). Men are also 29% more likely than women to say current events (such as war or mass shootings) motivated them to create an estate plan.
Young Adults Are More Than Twice as Likely as Older Adults to Be Influenced By Media to Estate Plan
1 in 4 Americans aged 18-34 said they were motivated by media coverage like an online article or influencer post to get a will, while only 11% of middle-aged adults and 3% of older adults were motivated by this type of coverage – differences of 78% and 157%, respectively.
Young adults were also more likely to be motivated by current events like mass shootings or inflation to create a will. Of adults aged 18-34, 24% cited this as their motivation, compared to only 11% of middle-aged adults and 4% of older adults.
Higher Income Americans Cite Family Expansion as a Main Motivation for Creating a Will
Almost 1 in 3 Americans who make $80,000 or more cite family expansion like marriage or the birth of a child as their primary motivation for creating a will. Meanwhile, Americans who make between $40,000 and $80,000 cited the death of a loved one and retirement or other age-related milestone (both 31%) as their main motivators for estate planning. Lower-income Americans cited a medical diagnosis as their primary motivator (26%).
The Importance of Estate Planning
More Than Half of Those Without a Will Believe It’s Important to Have One
64% of Americans think it’s very or somewhat important to have an estate plan, a 4% increase from 2022. However, Americans’ actions do not line up with their views on estate planning. Despite how many people think it’s important, only 34% of Americans actually have an estate plan in place.
More Than 2 out of 3 Americans Believe You Should Have a Will by the Age of 55 or Sooner, But Less Than Half of Those 55 or Older Have One
This disconnect between Americans’ views on estate planning and their actions also holds true when looking at when people think you should create an estate plan – 69% of survey respondents believe that you should have a will before age 55, with 28% saying it should be before age 35. However, only 46% of Americans aged 55 and over have a will or other estate planning document.
What You Should Know About Estate Planning
While our data show that the majority of people believe estate planning is important, the comparatively low number of people who actually have documents in place indicates a lack of education and familiarity with the process, among other obstacles. The brief explanations of the most important estate planning documents below can help you understand the process and which documents you may need to best plan for your future.
Estate Planning Documents
The three main estate planning documents you’re likely to come across are wills, trusts, and advanced directives.
According to the Caring.com 2023 Wills Survey, wills are the most common type of estate planning document. Even those who do not have a will or know exactly what it is have most likely heard the term before.
A will can be used upon death to dictate several different things, including how to divide up property, guardianship, debts, and more. For some people, a will covers all estate planning needs. But in some situations, such as for those who own large properties or predict any family disputes that could impact the will, further estate planning documents, like a trust, may be necessary.
Trusts are useful for several reasons, including providing more support than wills for those with larger estates, large amounts of property, or those who expect a disability. The most notable difference between a will and trust, however, is when the documents come into effect. A will determines who will become a beneficiary after the person passes away; however, trusts take effect as soon as they’re enacted (hence the term “living trust”). It’s also worth noting that creating a trust is more complex, and more expensive, than a will.
Another reason that one may choose to have a living trust is to avoid probate court. “While everyone’s situation can be unique, a general rule is that the larger the value of the estate, the greater need there is for a living trust,” says Chas Rampenthal, General Counsel for Legal Zoom. “The main reason here is to avoid probate, which can be a long and costly process – especially for larger estates. Additionally, when a will goes into probate, it becomes a court document; a living trust, on the other hand, is not made public upon your death, so your estate can be managed in private.”
Advanced directives (also called advanced healthcare directives) stipulate a person’s wishes regarding end-of-life care and/or what is to happen if the person becomes mentally incapacitated or unable to communicate later in life. Like living trusts, advanced directives are designed to take effect during a person’s life, not after they pass.
Despite its importance, Caring.com’s survey found that nearly 1 in 5 people (19%) do not know what an advanced health care directive is. This can be a mistake according to Phillip H. Palmer, ChFC, managing executive at The Chestnut Street Group. “Proper estate planning documents should include an advance healthcare directive, which provides guidance for your family and medical professionals in the event you can no longer make your own healthcare decisions. In an age of technology and medical advancements, much can be done to sustain life. The directive takes the pressure of making difficult decisions away from your family members.”
You can learn more about these documents by visiting Caring.com’s Guide to Advanced Health Care Directives.
Starting the Estate Planning Process
Today, people use remote and online solutions for all sorts of services – and estate planning is no exception. Though in the past creating an estate plan could be a long and complicated process, today’s online estate planning services make it a much quicker and less expensive undertaking.
“Estate planning has a well-deserved reputation for being an archaic and outdated process,” says Hicks. “COVID forced the industry to catch up with the times. Changes in technology have made it easier to create estate plans meeting or exceeding the quality available from legacy lawyers. Concurrently, changes in laws and regulations are making it easier to sign and store estate plans online, allowing more people to create a plan from the safety and convenience of their own homes.”
Caring.com has conducted its annual Wills & Estate Planning Study since 2015 to educate American adults and raise awareness about the importance of estate planning. All 2023 figures, unless otherwise stated, are from YouGov PLC. The figures have been weighted and are representative of all American adults ages 18 and above with a total sample size of 2,483. The survey was conducted online, and fieldwork was undertaken between January 14th and January 18th, 2023.
To learn more about online estate planning services, read Caring.com’s guide to The Best Online Will Services of 2023. For many people, estate planning is a daunting task, but the process can be simplified by breaking it down into steps and asking yourself some basic questions. To learn more about how to get started creating a will, trust, or advanced directive, visit Caring.com’s Guide to Estate Planning.
Additionally, you can see previous versions of the Wills Survey by clicking the links below: