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Surprises in a will can complicate estate plans

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Handling the estate of a deceased parent can be an emotional process for children already dealing with grief. 

Those emotions can become more complicated if the estate plan doesn’t unfold as expected — say, if there is an uneven split of assets among children or a previously unknown heir who comes forward to claim a share of the estate.

Feelings of pain and betrayal can be avoided by having discussions about your estate plan with your family before death; however, estate planning attorneys say these conversations are rare.

About two-thirds of Americans, 68%, say discussing end-of-life preparations with loved ones is important, but only 47% have done so, according to a 2022 Ethos survey of 1,000 adults. A 2024 report from online estate planning service Trust & Will found that 34% of millennials are unsure if their parents even have an estate plan. The site polled 1,000 adults.

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If a client refuses to disclose information about their estate to their heirs, it can put an estate planner or financial advisor in the difficult position of doing so after that client’s death.

“I think a lot of lawyers are hesitant to point out the ramifications of some of these things,” said New Jersey-based estate planning attorney Martin Shenkman.

Unexpected heirs and beneficiaries

Key steps you need to establish an estate plan

In the case of a previously unknown heir coming forward, experts say the first consideration is the will. If the will is vague or unclear — say, if it designates an asset to be split “among my children” rather than naming individuals —  there could be disputes that could require court intervention, according to Mitch Mitchell, Trust & Will’s probate expert.

Probate laws vary by state, he said, but it’s rare for genetic testing to be required to prove that a previously unknown heir is related. Typically, half siblings don’t have to prove who they are more than any other child of the deceased.

“As for inheritance divided equally, while states may vary regarding how much of a share a half sibling is to receive, this variation generally only exists when a half sibling is inheriting through a sibling, not a common parent,” Mitchell said. “Generally, for inheritance through a common parent, half siblings receive the same inheritance in equal parts with all other siblings.”

When there is no will, a state’s intestacy laws will determine how the property is divided, experts say, typically favoring the closest relatives.

The kids ‘don’t always get along’

The inheritance process can be a messy one if someone is written out of the will or an inheritance is divided unequally — especially if the decedent doesn’t detail why they made such choices.

“There have been a zillion times when people have told me, ‘No, all the kids get along. They all understand what I’ve done,'” Shenkman said. “And they may believe that because the kids appear to get along. But as soon as the parents are gone, those emotions come out of the closet like a torrent, and no, they don’t always get along.”

The first step to avoiding these kinds of hardships is do everything from a compassionate perspective, not from anger.

Martin Shenkman

estate planning attorney

Shenkman said attorneys should have open and honest discussions with clients and ask questions about motivations during the will-writing process. 

“When I’ve seen parents or family members disinherit somebody, it’s really a kick in the gut in most cases,” he said. 

Shenkman also encourages clients to have discussions with their children that are age appropriate, even if they don’t disclose dollar amounts. This can help explain the decision-making behind how an inheritance is split up and avoid any feelings of betrayal after a parent’s passing, he said.

‘Don’t write a will from anger’

Other things that can complicate the estate planning process are non-traditional family situations such as same-sex couples, gender transitions, assisted reproduction or surrogacies. Anything that can create ambiguity in how wills or trusts are interpreted requires creative solutions, experts say.

Shenkman recommends involving an objective third party, such as a trust protector or friend, in the estate planning process to provide impartial perspectives for when it’s time to read the will.

Many people avoid writing a will or creating a trust at all due to procrastination or superstition surrounding death, experts say. But reframing the estate planning process as leaving a positive legacy, rather than just distributing assets after death, can help clients take on a more compassionate long-term view.

“The first step to avoiding these kinds of hardships is do everything from a compassionate perspective, not from anger,” Shenkman said. “Don’t write a will from anger. Don’t write an estate plan from anger.”

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Majority of Americans are financially stressed from tariff turmoil: CNBC survey

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73% of Americans are financially stressed

Americans are growing increasingly uneasy about the state of the U.S. economy and their own personal financial situation in the face of stubborn inflation and tariff wars.

To that point, 73% of respondents said they are “financially stressed,” with 66% of that group pointing to the tariff wars as a main source, according to a new CNBC/Survey Monkey online poll.

The survey of 4,200 U.S. adults was conducted April 3 to 7.

Americans feeling financially stressed

CNBC/Survey Monkey polls from 2023, 2024, and this year have found that, on average, more than 70% of Americans said that they are stressed about their personal finances. This year’s survey found that 38% of respondents overall said they are “very stressed,” and 29% of high-earners with incomes of $100,000 or more also shared that sentiment.

Consumers are, of course, increasingly stressed by rising prices for essentials like food, energy, and shelter. This is due to a number of factors, including rising inflation, supply chain disruptions and geopolitical events.

In the new CNBC survey, 86% of Americans cite inflation as the top reason for their financial stress, while 75% pointed to interest rates and 66% cited tariffs. 

While inflation peaked at 8% in 2022, a 40-year high, it has since cooled significantly, reaching 2.4% in March. Despite this decline, the increased prices during 2022 have led to a loss of purchasing power for Americans, meaning they can buy less with the same amount of money than before.

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It would take nearly $114 today to buy what would have cost $100 in January of 2022, according to the Bureau of Labor Statistics.

And while Inflation has eased, experts do say the fallout from President Trump’s trade war threatens to put upward pressure on prices in the months to come.

Tariffs are generally considered to be inflationary, economists say. This is because tariffs increase the cost of imported goods, which can then be passed on to consumers in the form of higher prices. This can lead to a temporary increase in the overall inflation rate.

“We know that tariffs are inflationary,” said David McWilliams, an economist, podcaster and author. “We know that’s hitting on people’s expectations of how much money they’re going to have in their pocket in a couple of months time.”

So, when it comes to financial stress caused by tariffs, 59% of those surveyed by CNBC oppose President Trump’s tariff policy, with 72% concerned about the impact on their personal financial situation.

As a result, 32% said they have delayed or avoided making retail purchases, and 15% said they have “stocked up.”

What’s more, 34% of those surveyed said they have made changes to their investments due to recent stock market volatility from tariffs.

Managing your money through volatility

Handling financial stress

Many investors are concerned about their retirement savings, but financial experts say it’s important for those with a long-term perspective to understand that short-term market volatility is a distraction that’s better off ignored.

“The biggest thing is that it’s unknown, and when we don’t know things, and we can’t control things, that’s when our anxiety and our worry can spike, and it’s contagious,” said licensed therapist and executive coach George James, CNBC Global Financial Wellness Advisory Board member, a licensed therapist and executive coach.

While the market could be in for a bumpy ride over the next few months, experts say it’s best to stay the course and avoid making major portfolio changes based on the latest news.

To manage investments during the latest tariff volatility, for example, financial advisors urge investors to maintain a long-term perspective, review and potentially adjust their asset allocation, and consider diversification to mitigate risk. It’s also smart to bolster emergency funds, review your risk tolerance, and explore opportunities for tax-loss harvesting.

Financial experts also urge investors to focus on their risk appetite — and their goals.

“This is the time to evaluate short-, mid-, and long-term financial needs, concerns, and goals. Evaluation before action or inaction is essential,” said Michael Liersch, head of advice and planning at Wells Fargo, said in an e-mail to CNBC. “Getting specific on exact dollar targets, timelines around these targets, and their level of importance [priority] can create clarity around what should be done, if anything.”

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What advisors are telling their clients after the bond market sell-off

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As investors digest the latest bond market sell-off, advisors have tips about portfolio allocation amid continued market volatility.

Typically, investors flock to fixed income like U.S. Treasurys when there’s economic turmoil. The opposite happened this week with a sharp sell-off of U.S. government bonds, which dropped bond prices as yields soared. Bond prices and yields move in opposite directions. 

Treasury yields then retreated Wednesday afternoon when President Donald Trump temporarily dropped tariffs to 10% for most countries but increased levies on Chinese goods. That duty now stands at 145%.

As of Thursday afternoon, Treasury yields were down slightly.

Still, “there’s a massive amount of uncertainty,” Kent Smetters, a professor of business economics and public policy at the University of Pennsylvania’s Wharton School, told CNBC.

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Experts closely watch the 10-year Treasury yield because it’s tied to borrowing rates for products like mortgages, credit cards and auto loans. The yield climbed above 4.5% overnight on Tuesday as investors offloaded the asset. As of Thursday afternoon, the 10-year Treasury yield was around 4.4%.

Kevin Hassett, director of the U.S. National Economic Council, told CNBC on Thursday that bond market volatility likely added “a little more urgency” to Trump’s tariff decision. 

As some investors question their bond allocations, here’s what advisors are telling their clients.

Take the ‘proactive approach’

Despite the latest bond market sell-off, there hasn’t been a recent shift in client portfolios for certified financial planner Lee Baker, owner of Apex Financial Services in Atlanta. 

“I’ve been taking a proactive approach” by shifting allocations early based on the threat of future tariffs, said Baker, who is also a member of CNBC’s Financial Advisor Council.

With concerns about future inflation triggered by tariffs, Baker has increased client allocations of Treasury inflation-protected securities, or TIPS, which can provide a hedge against rising prices.

Consider ‘guardrails’

Ivory Johnson, a CFP and founder of Delancey Wealth Management in Washington, D.C., has also been defensive with client portfolios. 

“I’ve used instruments to give me guardrails,” such as buffer exchange-traded funds to limit losses while capping upside potential, said Johnson, who is also a member of CNBC’s FA Council.

Buffer ETFs use options contracts to provide a pre-defined range of outcomes over a set period. The funds are tied to an underlying index, such as the S&P 500. These assets typically have higher fees than traditional ETFs.

Seeking safety amid market volatility: Strategies to keep your money safe

Take a ‘temperature check’

With future stock market volatility expected, investors should revisit risk tolerance and portfolio allocations, Baker said. 

“This is a good time for a temperature check,” he said.

Market turmoil has happened before and will happen again. If you can’t stomach the latest drawdowns — in stocks or bonds — this is a chance to shift to more conservative holdings, Baker said. 

“We’re not selling because I’m concerned about the market,” he added. “I’m concerned about comfort level.”

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Social Security COLA projected to be lower in 2026. Tariffs may change that

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The Social Security cost-of-living adjustment for 2026 is projected to be the lowest increase that millions of beneficiaries have seen in recent years.

This could change, however, due to potential inflationary pressures from tariffs. 

Recent estimates for the 2026 COLA, based latest government inflation data, place the adjustment to be around 2.2% to 2.3%, which are below the 2.5% increase that went into effect in 2025.

The COLA for 2026 may be 2.2%, estimates Mary Johnson, an independent Social Security and Medicare analyst. Meanwhile, the Senior Citizens League, a nonpartisan senior group, estimates next year’s adjustment could be 2.3%.

If either estimate were to go into effect, the COLA for 2026 would be the lowest increase since 2021, when beneficiaries saw a 1.3% increase.

As the Covid pandemic prompted inflation to rise, the Social Security cost-of-living adjustments rose to four-decade highs. In 2022, the COLA was 5.9%, followed by 8.7% in 2023 and 3.2% in 2024.

The 2.5% COLA for 2025, while the lowest in recent years, is closer to the 2.6% average for the annual benefit bumps over the past 20 years, according to the Senior Citizens League.

To be sure, the estimates for the 2026 COLA are indeed preliminary and subject to change, experts say.

The Social Security Administration determines the annual COLA based on third-quarter data for Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

New government inflation data released on Thursday shows the CPI-W has increased 2.2% over the past 12 months. As such, the 2.5% COLA is currently outpacing inflation.

Yet that may not last depending on whether the Trump administration’s plans for tariffs go into effect. Trump announced on Wednesday that tariff rates for many countries will be dropped to 10% for 90 days to allow more time for negotiations.

Tariffs may affect 2026 Social Security COLA

If the tariffs are implemented as planned, economists expect they will raise consumer prices, which may prompt a higher Social Security cost-of-living adjustment for 2026 than currently projected.

“We could see the effect of inflation in the coming months, and it could very well be by the third quarter,” Johnson said.

If that happens, the 2026 COLA could go up to 2.5% or higher, she said.

Retirees are already struggling with higher costs for day-to-day items like eggs, according to the Senior Citizens League. Meanwhile, new tariff policies may keep food prices high and increase the costs of prescription drugs, medical equipment and auto insurance, according to the senior group.

Most seniors do not feel Social Security’s annual cost-of-living adjustments keep up with the economic realities of the inflation they personally experience, the Senior Citizens League’s polls have found, according to Alex Moore, a statistician at the senior group.

“Seniors generally feel that that the inflation they experience is higher than the inflation reported by the CPI-W,” Moore said.

When costs are poised to go up and the economic outlook is uncertain, seniors may be more likely to feel financial stress because their resources are more fixed and stabilized, he said.

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