Learning estate planning basics should not only be on the to-do lists of the wealthiest.
Less than one-fourth of Millionaire and Main Street investors have received advice from the financial advisor about estate planning basics, according to new wealth level studies conducted by Spectrem’s Millionaire Corner.
Twenty-three percent of Millionaires and 22 percent of investors with a net worth between $100,000 and $1 million (not including primary residence) have received guidance about estate planning basics from their financial advisor. Nearly three-in-ten (28 percent) of Millionaires stated they do not need this type of advice, compared with 34 percent of Main Street investors.
Estate planning is one of the most important components of personal financial planning. An estate plan can ensure assets are divided in keeping with an investor’s wishes.Estate planning can also provide for dependent children, direct end-of-life care and award power of attorney should an investor become incapable of managing his or her finances.
The youngest and least wealthy of Millionaire investors surveyed are the most likely to say they will seek this advice in the future. Thirty-nine percent of those under the age of 45 and one-fourth of those with between $1 million and $2.9 million are most likely to resolve to seek advice about estate planning basics.
Wealthier investors are significantly more likely to use estate planning tools – in particular, a will and trust - to protect both their loved ones and their assets, according to a 2012 fourth quarter Spectrem’s Millionaire Corner study.
High net worth Millionaires are three and one-half times more likely to hold assets in the legal structure than are wealthy investors with less than $1 million. A will allows investors to designate who will inherit your property and appoint a guardian to care for young children in the case of an untimely death. A trust can spare survivors lengthy, expensive and public court proceedings by circumventing probate court. With a trust an investor transfers title of property to a trustee, who is required to follow an investor’s written instructions in distributing the property after your death
In addition to creating a will or trust, other estate planning basics experts recommend you need to know include taking a full inventory of your assets, including investments, retirement savings, real estate holdings, and insurance policies, and including family members in estate planning discussions.
But learning estate planning basics should not only be on the to-do lists of the wealthiest. Without an estate plan, many miss the opportunity to specify what happens to their possessions and investments when they are gone, or to provide for dependent children and direct end-of-life care. Among Main Street investors, those between the ages of 45-54 and those with a net worth between $100,000 and $499,000 are most likely to say they will seek this advice in the future.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.