Where is the inheritance? Why are fewer and fewer elderly Americans making wills or organizing estate planning?

Research shows that fewer older Americans are making wills, which could spell trouble for survivors. The share of households over age 70 who have wills or trusts to distribute their assets after death has continued to decline since the 2000s, according to an analysis released in August by the Center for Retirement Research at Boston College. Between 2008 and 2018, the percentage of these households fell from 70% to 63%.

This downward trend reflects the growing diversity of older Americans. Older adults today are more likely to be black and Hispanic minorities, and these groups, unlike non-Hispanic whites, are less likely to leave wills or receive inheritances.

"We've studied who's not leaving a will," said Gal Wettstein, a senior research economist at Boston College, "and it's predominantly black and Hispanic Americans."

According to a2023 study on wills and estate planning conducted by Caring.com, the percentage of Americans over55 with wills decreased from48% to46% between2020 and2023. The scientific analysis ended in2018, but other studies indicate that the decline in will-making continues. The study was based on a representative survey of2483 Americans conducted by YouGov.

"It seems like making a will is put off until later," Wettstein says. "I think it's a frustrating process, even under the best of circumstances."

Most American wealth is inherited: between 15% and 46%, according to one analysis.

In a will, a person specifies how to distribute property and other assets after his or her death. If someone dies without a will, the local courts get involved.

And that's where the problems begin, according to Wettstein.

"I've seen families break up over a piano," says Ashley Folks, a certified financial planner from Hoover, Alabama.

Consider the family home, which is often a household's most valuable asset. When the last parent dies, the law usually divides their home among the surviving children.

"And it's not easy to subdivide a house," Wettstein says.

Survivors may disagree on what to do with the property: whether to keep it or sell it, and how to handle maintenance and property taxes. The resulting conflict can turn harmonious siblings into bitter legal adversaries. Legal proceedings, of course, incur court costs and may end with the property being sold at a discount.

“In the end, you can squander a significant portion of your assets,” says Wettstein.

The same problem can arise when dividing a family business or any other valuable asset.

"I've seen families break up over a piano," says Ashley Folks, a certified financial planner from Hoover, Alabama.

In non-traditional families, which are becoming increasingly common in America, there can be even more inheritance issues. Many households are led by single adults or unmarried partners, or by grandparents. Often, state laws do not take such situations into account. If one of the unmarried partners dies, for example, "the state does not necessarily recognize the other partner as an heir," says Wettstein.

Most Americans consider making a will to be important. Most people plan to do it sometime in the future.

“It takes time, it’s difficult, and perhaps some people don’t want to think about death,” says Andrew Herzog, a certified financial planner from Plano, Texas.

The duke recently wrote his own will.

“I’m married, I have one child and another on the way, and that has motivated me,” he says.

The process of making a will motivates many Americans to have children. Others draw inspiration from news stories about complicated legal battles, such as the case involving rhythm and blues icon Aretha Franklin and several handwritten wills, one of which was found in the cushions of a sofa.

In a study by Caring.com, 42% of respondents without wills cited simple procrastination; 35% said they don't have enough assets to worry about writing a will; 15% said they don't know how to get started; and 14% said the process is too expensive.

“People are very busy, they procrastinate, they don’t see the need, and they think it will lead to additional expenses,” says Volks.

COVID-19 prompted many Americans to create wills, but most of them were young. The percentage of Americans aged 18 to 34 who reported having a will increased from 16% in 2020 to 27% in 2021, according to a report by Caring.com. Interestingly, the prevalence of wills decreased in older age groups during this period.

Hiring a lawyer to draft a will can cost between $1,000 and $2,000 for the average American, financial planners say. An online will typically costs much less.

The fact that Black and Spanish-speaking families are less likely to create wills is not fully explained by procrastination and limited budgets: these issues have always existed. Wettstein believes that the decline in the number of wills primarily reflects the growing diversity among older Americans.

The share of Americans over 65 who are members of racial or ethnic minorities increased from 20% in 2010 to 24% in 2020, according to the Federal Agency on Aging. Black and Hispanic families are much less likely to make wills than non-Hispanic white families, according to research from Boston College. Other sources confirm this.

In the Caring.com report, 39% of white respondents reported having wills, compared to 29% of Black respondents and 23% of Hispanic respondents.

“When we look at the Spanish-speaking and African American populations, they often start accumulating wealth later in life,” says Genevieve Waterman, director of economic and financial security at the National Council on Aging. “They are so focused on accumulating assets,” she says. This may mean that they do not get to the point of making a will.

A Boston College analysis found that Black Americans and Hispanic Americans inherit significantly less than white Americans. From 1992 to 2018, Hispanic Americans were 23% less likely to receive an inheritance compared to non-Hispanic white Americans with similar socioeconomic status. Black Americans were 25% less likely to inherit. When Black or Hispanic individuals do receive an inheritance, it is a smaller amount. On average, Black Americans received $75,000 less than non-Hispanic whites during the period studied by Boston College researchers. Hispanic Americans received $41,000 less. This inheritance gap perpetuates and exacerbates historical racial wealth inequalities in America, the report concludes.