Many Americans die without telling their family members where to find their wills or how their estates will be divided and why, according to a new BMO Wealth Management report.
Conflict often ensues.
“As family dynamics become more complex, the potential for conflict to play out after a death increases,” Jason Miller, national head of wealth planning at BMO Wealth Management (U.S.), said in a statement.
“It is critical to implement and communicate an estate planning strategy in a way that will help prevent conflict and promote harmony.”
For their part, advisors face a challenge in motivating their clients to do estate planning. Moreover, advisors are entering a new era in estate planning with the growth of digital assets and uncertainty over tax reform in the new Congress.
BMO commissioned a survey of 1,008 Americans 18 and older. About two-thirds of respondents had adult or minor children. Their answers were cross-referenced with family relationship status to see whether complexity of family relationships affected their approach to estate planning.
The survey found that 52% of all respondents did not yet have a will, and this figure rose to 56% among those between 35 and 54.
For married adults who had a will/powers of attorney, 25% said only their spouse knew where the documents were located.
BMO pointed out that many challenges and potential family conflict can be avoided when an estate plan and will are in place.
When a person in the U.S. without a will dies, it said, state intestacy laws determine who will receive assets from the estate. A spouse and children generally have priority (which may be shared, depending on the state), followed by parents and then siblings.