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Financial Planning > Trusts and Estates

When Is the Right Time to Ask Clients About Writing a Will?

By John Manganaro

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What You Need to Know

  • Writing a will can improve the transmission of wealth across generations, but many individuals do not have one.
  • Approaching a client about writing a will is not a good idea when they are preoccupied with another complex financial transaction, research suggests.
  • Financially sophisticated investors and homeowners were more likely to respond positively to financial incentives to write a will.

Legacy planning experts know the most effective way to ensure that wealth transfers go to the intended recipients is for the donor to have an enforceable will, but many Americans who could benefit from writing a will neglect to do so.

In fact, as detailed in a new report published by the Center for Retirement Research at Boston College, the percentage of households in which the head has a will is “surprisingly low,” such that, for those 50 and older, fewer than half of household heads have a will.

By age 70, the share increases to 67% overall, but the rate is much lower for less wealthy households and for Black and Hispanic households. As the authors warn, this is a big financial security issue affecting American households today — one that financial professionals can help to correct with the right approach.

The authors of the report are Alicia Munnell, director of the CRR; Jean-Pierre Aubry, associate director of state and local research; and Gal Wettstein, a senior research economist. Their work explores the deceptively simple question of when is the right time to approach clients about writing a will.

At a high level, their findings suggest that the setting of when to approach individuals about writing a will is extremely important, and that such overtures are most likely to succeed in contexts where individuals are not overly preoccupied with more immediate concerns, financial or otherwise.

Context Is King

The study used an online survey administered by researchers at the University of Chicago in which the participants were asked a series of questions about whether or not they have a will and why.

Those without a will then participated in an experiment where they were randomly assigned to one of four treatment groups to determine whether various incentives would encourage them to write a will.

Among the incentives considered were small monetary payments, the provision of free financial and legal advice, and the tying of free will-writing support to the mortgage application or savings account opening process. The main hypothesis being tested was whether intervention at a critical time, combined with free legal and financial advice, could increase will-writing.

According to the authors, the experimental results were both surprising and informative.

“The particular timing in two of the treatments — when taking out a mortgage — turned out to be a bad idea,” the authors explain. “People were overwhelmed by the thought of one major transaction and had no interest in adding another emotionally taxing and time-consuming task to the pile.”

The results did highlight, however, the importance of the setting, because when the option shifted from taking out a mortgage to opening a simple banking account, significantly more people indicated they would proceed with adopting a will.

“Furthermore, the results did show that different types of people react quite differently to the different settings and interventions,” the authors note. “Financially sophisticated individuals and homeowners respond better to financial incentives to write a will, and are less deterred by the mortgage setting regarding the timing of will-writing.”

Additionally, while not conclusive, the authors say their results are also consistent with the benefit of wills for the retention of wealth within families being driven by the practical protection that wills provide against the dissolution of wealth among multiple heirs — rather than by changing the intentions of potential donors to leave more bequests.

Credit: Adobe Stock 

John Manganaro

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