Article of Interest

Baby Boomers and Estate Planning - Get Started!
By: David F. Johnson & Jennifer Lovelace, Winstead PC

Nearly 76 million baby boomers – people born between 1946 and 1965 – are headed for retirement in the next 20 years or so in the United States. Even after the recession took a significant toll on the value of their homes and investment portfolios, they remain a powerful force in the nation’s economy. They control an estimated $10 trillion in assets -- most of which they will still own when they retire.

Additionally, in 2007, Forbes magazine wrote that the Fort Worth-Arlington area was the best place in Texas, and the second best place in the nation, for boomers to retire. The Forbes writers noted the lower cost of living and a slightly better health-care score than other cities in Texas based on health-care costs and the number of physicians per capita. Other factors include the area’s relatively low taxes and the availability of arts and leisure activities.

The 2000 census reported that 9.6 percent of Fort Worth’s population was 65 and older. That number is higher today. And the metro area is already bracing for a new population of relatively wealthy, newly-retired boomers. Last year, U.S. News & World Report ranked the Dallas-Fort Worth-Arlington area eighth on its list of top 20 retirement areas for baby boomers and predicted a growth rate of nearly 23 percent in the number of seniors in the region.

The oldest baby boomers are turning 64 this year. As one might expect of a generation that is accustomed to setting the tone for the nation as a whole, baby boomers tend to be hands-on with their investments. According to a 2010 study by the Conference Board, an independent consulting firm, nearly 75 percent of high-net-worth baby boomers -- individuals with a net worth of $1 million and above -- are very involved with their investment portfolios and monitor their savings and investments fairly closely.

However, the same Conference Board study also indicated that while baby boomers are often involved on a day-to-day basis with their portfolios, 62 percent of them have not consulted with an investment advisor for “foundational” planning – the type of financial planning that provides for the long-term preservation of their assets and for appropriate disposition of their assets after death.

In fact, study after study shows that only 30 percent of Americans have wills. Baby boomers apparently have not moved in any larger proportion to write wills that dispose of their assets according to their wishes. That may not be surprising, considering that this is a generation that apparently is not willing to contemplate their retirement from work, much less their death. (Nearly three-fifths of baby boomer men say they want to work past normal retirement age, according to a recent study).

If current trends continue, courts will be faced, sooner than many people realize, with the massive task of distributing trillions of dollars of assets belonging to the deceased baby boomers without adequate legal direction.