Creating a will might not be the happiest part of financial planning, but it’s an important one. Unfortunately, many people fall short in this area.
Only one in four Americans said they have either created or recently updated a will, according to a new survey of 1,007 U.S. adults conducted by Western & Southern Financial Group. Nearly one-third of respondents have never even discussed end-of-life financial plans with their family or loved ones.
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Baby boomers are the most prepared when it comes to creating and updating wills — and yet less than half (47%) of boomers said they’re prepared. In contrast, 23% of millennials and 20% of Gen Z said they were prepared.
Not having an updated will in place can create financial stress for the people you leave behind. More than half of survey respondents (51%) said they experienced financial struggles after losing a loved one. Nearly two-thirds (62%) said they don’t feel financially prepared to handle expenses that might arise if they lose a loved one.
If you haven’t created or updated a will yet, here are three reasons you should start now.
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You Can Control Where Your Assets Go
Creating a will should be a standard part of any financial plan because it lets you determine who will get your assets when you pass away. As Western & Southern noted in a separate report, a will provides “clear instructions” on how you want your assets to be distributed after your death. Without a will, your estate will be distributed “according to state laws ” — and those might not align with what you want.
A will is especially important if you have minor children because it lets you appoint a guardian for them. This way, you can ensure they’re cared for according to your wishes.
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You Need To Account for Life Changes
Updating a will is just as important as creating one because it allows you to account for life changes. Here are some examples of when you should update a will or estate, according to a report from the Department of Homeland Security:
When you add a child to your family through birth or adoption.
If you’ve had or are considering a divorce.
When a child gets married.
When your executor or a beneficiary dies.
If you come into a windfall of money from an inheritance, asset sale or some other means.
When you can’t find your original will.
Your Loved Ones Will Have More Financial Security
The last thing you want is for your loved ones to face financial hardship when you pass away. But that could be the case if you don’t have an updated will. Per the Western & Southern survey:
39% of respondents turned to credit cards or personal loans to cover unexpected expenses after the loss of a loved one.
35% used life insurance payouts to manage unexpected expenses after losing a loved one.
26% had difficulties accessing life insurance payouts or other critical funds after losing a loved one.
Creating a will ensures that your assets are passed on to your loved ones, which can help them avoid some of the problems above.
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Sources
Western & Southern Financial Group, “Half of Americans Struggle Financially After Losing a Loved One.”
Western & Southern Financial Group, “What Is a Will? Why It’s Important & Where to Start.”
Department of Homeland Security, “The Importance of Having a Will.”
This article originally appeared on GOBankingRates.com: Only 1 in 4 Americans Have Created or Updated a Will — 3 Reasons To Start Now
