Today's Income Conversation

Legacy & Wealth: Is Your Estate Plan Really in Order?

For many clients today, the answer is ‘not completely’

by Ken Cella

Mr. Cella, Principal, leads Edward Jones’ Client Strategies Group. Visit

In the past, many people considered estate planning as something just for the wealthy. That view is changing, yet many Americans have not taken the most basic steps to ensure that their heirs are properly provided for in the future. In fact, a recent survey by Edward Jones found that while 77% of Americans believe that estate and legacy strategies are important for everyone, only 24% of Americans have even taken the time to designate beneficiaries for all of their accounts, leaving the simplest of legacy decisions up in the air.

While it is encouraging that most people recognize how a properly planned estate or legacy strategy puts you in control of what happens to what matters most to you, such as minor children, dependents, financial assets and even your own health care decisions, it is startling that despite this awareness, most Americans still do not have a plan. Without a plan, your assets could be subject to the time-consuming, expensive and very public probate process, where relatives and creditors can gain access to your records and challenge your will.

The data also showed a lack of urgency in engaging in legacy conversations. For example, nearly two-thirds (64%) of Americans who said they have worked with financial advisors reported never having discussed estate goals and legacy plans with their advisor. Furthermore, only 34% of millennials and Gen Xers have discussed their estate/legacy goals with their financial advisors. Baby boomers, the generation most likely to need estate plans in the near future, were not much further ahead at 38%.

Four Easy Steps to Sound Legacy Planning

No financial plan is complete without a legacy strategy. A key purpose of planning your estate is to ensure that loved ones and your assets are cared for according to your wishes, while also maintaining your privacy. Developing a plan may seem daunting at first, but there are four relatively easy steps that individuals can – and should – take sooner rather than later to make sure their financial house in order for now and for the future, including:

1. Designating beneficiaries
First and foremost, you should designate beneficiaries on each of your appropriate financial accounts. This is simplest and quickest way to get started and can be done without the need for legal advice and at no expense.

nearly two-thirds of those surveyed who work with a financial advisor reported that they have never discussed estate planning with their advisor...

2. Seeking tax, legal and financial advice
To establish a sound estate plan, individuals should consult with tax, legal and financial advisors to ensure that their plans are tax efficient, actionable within their legal jurisdictions and provide for all heirs according to their wishes. Yet, nearly two-thirds of those surveyed who work with a financial advisor reported that they have never discussed estate planning with their advisor. Since working with a financial advisor is a logical first step, it is doubtful that these respondents have sought tax or legal advice either.

3. Creating an estate plan and reviewing it regularly
As beneficiaries, survey respondents indicated the three most important things their parents did or can do for them before they pass include having a will/legacy strategy in place (39%), paying off their outstanding debt (18%) and telling them where their money and assets are held (11%). Of course, things can change over time, so any plan should be reviewed periodically to ensure that it continues to meet your wishes.

4. Communicating your wishes to your family
Communicating with your beneficiaries is key to developing a sound plan and ensuring that your estate goes to those you care about most. Most Americans (73%) are confident that their beneficiaries will know how to carry out their estate or legacy plan or use their inheritance when the benefactor is gone. However, only 49% of beneficiaries are confident they know how to carry out the estate plan of a loved one. Clearly, there is room for more communication here.

The Good News

Fortunately, the Americans who do have estate and legacy plans in place are committed to updating them and involving their families in the process. Almost all Americans who have discussed their estate/legacy goals with their financial advisors have updated their plan since creating it (98%). Additionally, 61% involved their family the last time they reviewed their estate/legacy plan with their financial advisor, increasing to 74% for Americans with children in the household.
This is truly good news for those who have estate plans – and important food for thought for those who don’t. ◊