Estate Plans More Likely to Include Planned Gifts

New research findings show that it is more crucial than ever for planned giving professionals to encourage estate planning. According to updated statistics by planned giving researcher Russell James of Texas Tech University, the use of wills is continuing its decline in the United States while the use of funded trusts is up - and most important, those who do have an estate plan are more likely to include a charitable beneficiary.

James, director of graduate studies in charitable planning at Texas Tech, recently added newly available statistics to an analysis he published in 2013 about the charitable behavior of Americans aged 55 and older. He analyzes data from the Health and Retirement Study (HRS) sponsored by the National Institute on Aging in which more than 26,000 Americans answer questions every two years.

Wills are down more than trusts are up
James reports that fewer than 52% of Americans aged 55 and older had a signed will in 2014. The number has fallen almost 10 percentage points since the current HRS study began in 1998.

At the same time, more Americans are creating funded trusts - though trusts have not been increasing as much as wills have been declining. The use of trusts is rising most among the elderly and for the first time has reached 20% among those aged 75 and older, an age category that includes many planned gift donors.

The percent of Americans with estate plans using wills and trusts is down overall, and James and others have speculated that many have turned to beneficiary designations for their estate gifts because they are considered easier to set up and to change.

Estate plans with charitable gifts reach all-time high percentage
In 2014 almost 11% of Americans aged 55 and older who signed a will or trust included a charitable beneficiary, up more than half a percentage point from just two years earlier. The number has increased by a third since the current HRS study began in 1998, when it was 8.3%. "Among the U.S. population of adults aged 55 and above who have completed a will or trust, there is an increasing trend to include a charity as a beneficiary," James said.

But because the percent of Americans using wills and trusts is down, the overall percentage of those with charitable beneficiaries in their estates has not increased - holding steady at just under 6% since 2000, according to the statistics reported by James.

The planned giving message is clear: Encourage your prospective donors to complete an estate plan because charitable gifts are more likely than ever to be included. Contact Pentera to learn more about estate-planning materials.