Pandemic & Planning

Planning Takes A New Center Stage

Now, more people are developing estate plans, though large percentage remain without a will

The Q4 Wells Fargo/Gallup Investor and Retirement Optimism Index shows that while some progress has been made in this area, many investors have more work to do.

The global focus on COVID-19 over the past year has caused people to evaluate aspects of financial security that they may have previously put off — most importantly, creating a will and an estate plan. But the Q4 Wells Fargo/Gallup Investor and Retirement Optimism Index shows that while some progress has been made in this area, many investors have more work to do. Close to half of investors in the new survey (45%) report they have neither a will nor an estate plan. About a third say they do have a written will (34%), 4% have written estate plans, and 17% have both.

 

“The pandemic has put in sharp relief the need to plan for the future, including having good end-of-life plans in place,” said Michael Liersch, head of Advice and Planning for Wells Fargo’s Wealth & Investment Management division. “The availability of the vaccine is great news, but it should not stop people from preparing estate plans.”

Higher-income investors are no more prepared than investors as a whole, but the percentage with either a will, estate plans or both does increase with age. The percentage with no preparations declines from 70% of investors under age 50 to 17% of those 65 and older.

 

Which of the following do you currently have?

A written will

(%)

Written estate plans

(%)

Both

(%)

Neither

(%)

All investors

34

4

17

45

High-income investors

19

6

30

45

Aged 18 to 49

19

1

11

70

Aged 50 to 64

36

4

17

43

Aged 65 and older

50

9

24

17

 

Investors’ Assignment In 2021: Close The Family Communication Gap In Estate Planning

Even those who have a will or estate plan in place may need to be more open about them with family or other heirs, to ensure their final wishes are understood and carried out.

Nearly two-thirds (65%) report they have only spoken a little or not at all to family members about their will or estate plans, and 57% believe they need to do more when it comes to communicating these plans. Again, this changes with age, but even 45% of retired investors say they need to do more.

The pandemic has put in sharp relief the need to plan for the future, including having good end-of-life plans in place...

Talking to family members about wills and estate plans is not something most investors enjoy. The slight majority (51%) say they do it out of obligation, while most of the remaining respondents either avoid it (14%), dread it (10%) or don’t ever do it (14%). Just more than one in 10 surveyed (11%) say they enjoy it. At the same time, the idea of including a “letter of wishes” in their will detailing matters from funeral arrangements to how they want heirs to use their money or other assets, appeals to 56% of investors — possibly because it sidesteps direct conversations. Higher-income investors are not markedly different in most respects from all investors in their estate preparation or preferences. However, those high-income investors surveyed are much more likely to want to leave a letter of wishes (70% vs. 56%).

While most investors (62%) say they want to leave it up to their heirs to do as they choose with the money and assets they leave them, 35% want to determine the specific impact their estate has through directions they leave behind. “Having a specific impact after you are gone is difficult to do without discussing your goals with family members while you are able to,” said Liersch.

Communication Is Key

One reason investors may avoid conversations about their will or estate is that most surveyed say they are confident their family members understand and support their estate plan goals: 35% are “highly confident” and 38% “somewhat confident.” Just 13% are “not too confident” or “not at all confident,” while 14% say they have not set these goals.

“The perception that family members are in sync with their wishes may be true for some investors, but for others, that may need to be confirmed,” said Liersch. “Even if investors want to provide their heirs broad latitude in using their assets, communicating that sentiment now is important to give their heirs peace of mind — and the financial tools and knowledge — in making these decisions when the time comes.”

 

 

 

About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.92 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,200 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 31 countries and territories to support customers who conduct business in the global economy. Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.