In the 2022 Caring.com Wills and Estate Planning Study, inflation is listed as one of the main fears of American adults in how they view their personal finances. When inflation goes up, people tend to perceive their savings and other financial assets as being less valuable. In turn, this can cause them to postpone or abandon estate planning. With 9 out of 10 American adults fearful of inflation this year, according to a recent New York Times study, that means a lot of adults could suddenly decide to hold off on creating necessary estate plans.
This is not an unknown or unfounded phenomenon, either. Caring.com interviewed Patrick Hicks, General Counsel and Head of Legal at Trust & Will, in the same 2022 study. Hicks explained that “Inflation can have significant impacts on one’s ability to save for their own future. The current and potential financial strains amid the COVID-19 pandemic and ongoing economic uncertainties have compelled many people to think they don’t have enough valuable assets to leave behind. A natural reaction during times of economic uncertainty is to look for ways to reduce costs by cutting unnecessary expenses.”
But inflation doesn’t have to derail your estate planning—in fact, it shouldn’t. In the short term, it may feel frightening and it may feel unnecessary. But your estate plans are more than your financial health. Wills and trusts also help you make decisions regarding your health care; who will act on your behalf if you’re incapacitated; who will care for your pets or your children in your absence; and who has a legal right to which property. Also, failing to set forth in a legal document who will inherit your assets could have the unintended consequence of disinheriting your spouse from a significant portion of what you do have and leaving your children open to financial abuse.
It’s easy to think that estate planning is just about what you’re leaving behind, specifically what monetary property you’re leaving behind. That is the aspect most people focus on because it can be frightening or unpleasant to think about our own death. It’s not something most of us like to dwell on.
But estate plans are about your life as well as your death—who will care for you in a medical emergency? What decisions are they empowered to make? Who has guardianship of your children if you cannot take care of them anymore? All these questions and more are handled in estate planning.
Even now, after the impact of the pandemic and years of uncertainty, 2 out of 3 American adults still do not have a will. Are you one of them?
Talk to an estate planning professional today to begin the process, even if you just want to ask some questions.