Estate Planning Report: Traditional Plans Don’t Serve Family Needs

In 2008, Allianz surveyed approximately 3000 adult baby boomers and their elderly parents to learn what is important to them.

Survey Results

  • 77% of baby boomers (now in their 50s and 60s) surveyed place values and life lessons as a high priority to transition estate top next generation.
  • 77% of the elderly parents (in their 70s – 90s) place values and life lessons as a high priority to transition estate top next generation.
  • Last wishes and instructions are next highest priority at about 65% of both groups are high priority (who gets what, who is in control).
  • About 40% of kids and 15% of parents stated personal property of emotional value are high priority (e.g., photos, journal, wedding rings, holiday china).
  • Only 15% of adult boomers and 40% of their parents stated financial assets and real estate are a high priority.

Important Values Usually Not Addressed

Based on the issues typically addressed in an estate plan, the most important priorities to children and parents are typically underserved.

To correct this unbalanced situation, does your estate plan provide the strategy, knowledge, and instruments that promote successful wealth transfer (both tangible and intangible assets) to your family and future generations of heirs?

Learn more: What Has Real Value to You, Your Family, and Your Heirs?

Traditional Focus of Estate Planners

The standard industry definition of estate planning used by financial and legal professionals is: “I want my property to pass to who I want, when I want, the way I want, at the lowest possible cost.”

Based on that understanding, the normal approach is to spend most of the time during the estate plan development process creating a will or trust.

A typical estate plan ends up being all about the “stuff” and not about the high priorities of older parents and their children.

The Allianz study indicates many participants knew of fights in estates, but:

  • Only 3% of clashes originated over financial assets
  • Just 11% of heir clashes were about real estate.
  • The other 86% of the fights were about control or trust or other issues typically not addressed in estate plans.

New Approach to Estate Planning

Given the failure rate of traditional estate plans, to ensure the success of your legacy, you need a plan that also addresses proper family preparation and heir preparation with estate plan documents that ensure it:

  • Focuses on passing important intangibles to next generation:
    • Heirs prepared.
    • Money spent on wise investments.
    • Heirs continue to work together harmoniously.
    • Personal assets passed on — family members agree and are comfortable.
  • Addresses saving taxes and minimizing costs, but if other issues are not addressed a family is set-up for disagreements down the road.
  • Establishes strategies and tactics based on the recognition that the financial losses of just one child’s share of family assets out-weight cost of taxes and legal fees.
  • Creates lines of communication to protect the estate (tangible & intangible assets) from being at risk or lost by family disagreement.

Learn More

Learn more about the new approach to estate planning and the formula for success at Your Legacy.