Plan ahead: 64% of Americans don't have a will

Jeff Reeves | Special for USA TODAY

For Americans busy trying to pay the bills and shuttle the kids to soccer, the last thing on their minds is their mortality.

According to a 2015 Rocket Lawyer estate-planning survey by Harris Poll, 64% of Americans don't have a will. Of those without a plan, about 27% said there isn't an urgent need for them to make one — and 15% said they don't need one at all.

"You can see in the data that the No. 1 reason people don't have a will is because they haven't gotten around to it yet, but that doesn't tell the whole story. Why haven't they gotten around to it?" says Lisa Honey, director of product marketing at Rocket Lawyer.

It's partially because most people "don't like to think about death," she says, or because they falsely believe wills are only necessary if you have a multimillion-dollar estate.

So what exactly happens if you don't have a will when you die?

"If you don't have a will or an estate plan, your state of residence has one for you," says Gretchen Cliburn, senior managing adviser at BKD Wealth Advisors in Springfield, Mo. "In some states, 50% of your assets go to your spouse and 50% of your assets go to your kids. ... This could create some financial and family issues."

PITFALLS TO AVOID

Some of your assets may come with other strings attached. For instance, your retirement account may already have a designated beneficiary. At your death, that's who your IRA provider is obligated to send the money to regardless of whatever other wishes you have.

"If you want to leave 25% of your estate to a charity but a majority of your estate is in your IRA, you may be leaving significantly less to that charity than you intended," Cliburn says.

Even worse? You don't update the beneficiary after your divorce, so all your investments go to a disgruntled ex, and your new wife and family don't get a dime.

There's also the issue of red tape in courts. Setting up a trust in addition to your will is a way to ensure assets don't get tied up in the legal quagmire of probate court — particularly if you have a spouse who will need that money if you die unexpectedly.

"We all know that courts … have struggled with budget cuts and have days off and cut back on judges," Honey says. While there may not be a way to avoid probate altogether, "for getting your assets as quickly as possible to your heirs, a trust can be a great way to do that," she adds.

Estate planning is clearly not just about money. If you have young children, you're leaving it up to the courts to appoint a guardian, so making a plan for custody is reason alone to consider crafting a will.

Other important elements to consider:

•Make a living will, which will explain your wishes for care should you become so ill that you can't act on your own behalf.

•Appoint a "digital executor," who will have passwords to access your computer, email and social media accounts. In this Internet age, it's important to think about who gets the passwords, because many people spend good money on iTunes, cloud storage and other Internet services, and families want to ensure those baby photos stored online don't get lost.

•Consider funeral and legacy planning, which will make things easier for your family when you're gone. Sometimes a simple question of whether you want to be cremated or what cemetery you prefer can create as much stress for survivors as what to do with your money.

STAY ON TOP OF CHANGES

Because of all the moving parts and the natural changes of your family situation as you age, it's important not to leave your will in a drawer for decades after you make it.

"Changing circumstances may cause a need to update beneficiaries. This can include if you marry or remarry, have a child or new grandchild, have a divorce, or have a spouse or child die," says Mike Piershale, president of Piershale Financial Group in Crystal Lake, Ill. "If you move to another state the will will likely need to be updated since wills are valid under state law, not federal law. Also, changes in tax laws may require a will to be updated."

Updating your will to disinherit an ex-husband or reflect the fact that one of your heirs has died can be an emotional process. But the reality is nobody can do this for you, and you never know when you'll run out of time.

"People simply don't like talking about who's going to receive their money after they're dead," Piershale says. "It's just not a pleasant thing to think about, and often people will delay it, sometimes until it's too late."

HELP IS AVAILABLE

Many lawyers now provide flat-fee estate planning services, creating a will for a fixed sum of a few hundred dollars. And if you want to save a few bucks by doing some of the work yourself, there are plenty of self-directed resources online — including websites like Rocket Lawyer and LegalZoom — that help guide you. There are even do-it-yourself products like Quicken's WillMaker, which works similarly to its tax-preparation software.

Whatever method you choose, the important thing is to engage seriously on your estate plan and not leave things up to chance, Honey says.

"It's practical stuff — it's not just philosophical, it will matter, and the courts will decide," she said. "If you want to make sure things happen the way you want them to, you have to pay attention to details."

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks.