Amid a historic shift of intergenerational wealth, a large majority of US adults could be in for the shock of their lives as an ocean of wealth gets funneled into the probate system, according to new research by a leading digital estate planning platform.
The new study by Trust & Will, titled "The State of Probate in America," underscores a significant knowledge gap, with a concerning number of adults either underestimating or not knowing the financial costs, time, and emotional toll associated with probate.
According to the study, only 65 percent of Americans understand what the term means, while 19 percent are uncertain. More than a third of respondents (35 percent) admitted to having no comprehension of the process at all.
While the average probate process takes around 20 months, only 2 percent of respondents believed it would take that long. Nearly two-fifths (37 percent) said they were unsure of the timeline.
Fifteen percent of respondents believe it will take just one to three months, while another 15 percent think it will take four to six months, and 12 percent estimate it will take ten months up to a year.
The poll found Americans were mostly blind to the financial toll of probate, with 56 percent having no idea about the associated costs. Ten percent expected it to cost $1,000 or less, and only 4 percent anticipated costs exceeding $10,000.
Those estimates are wildly off the mark: with probate costs estimated to run between 3 to 7 percent of an estate’s total value on average, the legal process to settle a $750,000 estate could incur $22,500 to $52,500 in fees, according to Trust & Will.
Just over half of the respondents (52 percent) perceive the probate process as somewhat or very difficult, the poll found, with only 40 percent believing they have a strong understanding of it. Two-thirds (65 percent) of Americans indicated they would seek help from a probate attorney.
With tens of trillions of dollars at stake in the Great Wealth Transfer, the lack of probate preparedness among Americans is a real concern, according to Trust & Will CEO Cody Barbo.
"For most Americans, the inheritance process is far from easy, and the lengthy and costly probate process can make it even more difficult, especially as people are grieving the loss of a loved one," Barbo said in a statement Wednesday.
A large chunk of Generation Y could be in for a shock, Trust & Will noted. Citing its 2024 Millennial Study, it said 62 percent of millennials do not have a will or trust, while another 34 percent are unsure if their parents have an estate plan.
"Amidst an aging population that isn't fully prepared for end-of-life via estate planning, millions of Americans will be plunged into the long, expensive, and emotionally draining process of probate," Barbo warned.
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