Estate Planning – Why Bother?     Its a Head thing & a Heart thing

Let’s work our way down, starting from the brain, the logic center that deals with figures and facts.

Facts  – we are all going to die. Along the way some of us may be injured or ill. Many of us will live well into our 80s and 90s, but need care for daily activities. While today you are mobile, active and extremely competent, believing that you will always be is naive and dangerous.  A little planning can make it less confusing and less costly. Accept the reality, make a plan and enjoy life.


Figures – it costs money to die. Aside from the cost of the funeral, which can fall within a wide price range based upon many choices, there are legal obligations a deceased person’s family must meet. Paperwork, forms, filings are all needed to finalize a person’s estate.  This is no easy task and often an attorney is retained to assist the family through the process.


During our lifetime we actively work at growing our wealth and saving our dollars. We buy forever stamps, prepaid legal services and home insurance. While most of my communication is via email I still like knowing I have a hedge against the potential cost increase of mailing a letter. The chances of a home fire that completely destroys my home are less than two percent and yet I know with 100% certainty that one day I will die. If there is something I could do today that will reduce or eliminate the future cost of an inevitable event it certainly seems to be the financially prudent thing to do.


From the Heart:

While I have heard a number of people say they don’t care and their family can sort things out after they are gone, very few actually mean it.  From an unselfish view point, making plans is a gift we give to those we love. It allows them to be emotionally involved in care giving and grief without the disturbance of dealing with legal and financial matters. Properly done it provides a ‘helper’ to guide them through what needs to be done without the burden of cost and time expenditures. Someone to lean on and hold their hand at a time when both are so necessary.

Selfishly, making a plan assures your legacy.  How will you be remembered? In my own life, memories of some relatives are clouded by ‘the mess they left for us to deal with’.  Are family members no longer on speaking terms because there was conflict around settling an estate or did “Mom left us with a plan in place, it made things so simple.”


In Summary – Since we are all going to die and leave behind work that must be done by others it makes both economic sense and emotional sense to prepare for this inevitable event by putting a plan in place that will provide both the structure and the help that will be needed.

The Best Gift

phoneThe best gift we could ever give a loved one is a phone number.

They say that diamonds are forever and flowers create emotions. While these are both true I want to suggest that when you care the most you provide a hand to hold and a shoulder to lean on.

I’m married. I have kids, a mortgage and all the financial burdens of the American Dream. So I bought life insurance. But then I went one step further. Anticipating that if my wife became a widow, she would appreciate some direction in her life I wrote a letter. I told her of my love and gratitude for all that we had together. Then I told her about the couple of business cards that are in the envelope. These professionals are people I have met and trust. They could be helpful on how best to mange the finances she now has to deal with, the life insurance proceeds. I provided more than one name, allowing her to meet and decide for herself who to work with. The envelope is inside the policy jacket of the life insurance and she doesn’t even know it is there, unless she reads this post.

She also has a phone number. My kids have it too. It is to the company that services our Revocable Living Trust. The customer service representative and the local representative are the best gift I can give them. I might be dead, or in a comma, and they need to know what to do. What forms to fill out, what papers to file, what legal obligations do they have? For a lot of people this becomes a confusing and emotionally draining time as they try to figure this out by themselves or enlist the costly services of someone they don’t really know. All this happens soon after a loved one is buried or in a critical state of health. My family just calls the number I gave them and along comes someone to answer questions and hold their hand through a messy part of life.

I’m not much of a gift giver, I often forget what flowers she likes or what is her birthstone.
But I know the gift of that phone number is a powerful reminder of how much I care.

A sad story of a lost gift

  • Preparing For Hurricane TogetherA disappointing phone call came in today. Not the first time I had heard these same words. An appointment I had made with Ms Smith (not her real name) was being canceled.
    She explained that her son and her nephew had told her she didn’t need an Estate Plan. Something they had done with her home and her accounts were all she needed.
    I could have told her that her son was doing something illegal – the unlicensed practice of law, UPL, but since it is his mother it probably wasn’t illegal, only misguided.
    There seems to be a mystery around estate planning. Years ago it was very uncommon for folks with less than a million dollars in assets. Banks would maintain ‘trust departments’ to invest those assets and set up a trust over which they would be trustee. This was beyond most people’s financial ability and so the idea that trusts were for the wealthy was the accepted belief.
    Since Estate Planning is a specialty in the practice of law not every attorney is well versed in the drafting of a trust document and it continues to be made more complicated than it needs to be. Therefore people try to find loopholes.
    There are a number of things a person can do to try and avoid the frustrations and cost of probate, but each of these are only a part of a total plan. Often I’ll use an analogy or two to explain.
    I am a DIY, a do it yourself kind of guy. If I can figure it out and do it myself there is no reason to be paying someone else. Drives my wife nuts. But when I die, the DIY is gone and the family is left to deal with whatever I left behind.
    I live in the northpart of the mid west. I have never been in a hurricane, but I’ve seen the news footage on television. The folks down there are not boarding up their homes and windows with 2 x 4s. They are using full sheets111 of plywood. They know that if they put a few 2 x 4s across the window the storm will blow in and destroy the house. Those 2 x 4s represent the quick solutions people use rather than engage a professional. They think they have out tricked the storm by doing it themselves. In many cases the storm still enters the house and ends up costing more time and money than if they simply sought expert advice and purchased the plywood.
    I hope Ms Smith’s son calls me back. If he is willing to listen I can explain how the benefit he hoped to gain in one area will be trumped by the tax implications in another area. Ms Smith’s other adviser is in the financial services industry. There is a lot of information to keep up with in that industry. During my 25+ years as a licensed financial adviser I would never advice my clients on estate planning matters, it was out of my area of expertise and seemed morally wrong if not illegal.
    The sad thing is that I don’t think I will ever hear from Ms Smith’s son. I could tell him that the cost of the plywood is a whole lot less than the 2 x 4s and more of a sure thing. He would be doing himself a big favor. After the storm Ms Smith will be gone and her son will be left alone to clean up the house. That’s why I made sure that I got my own father set up properly. It’s a gift to me. Then I set up my own estate plan. Its a gift to my wife and family.

Estate Planning Mistakes to Avoid

We are all going to die.

This is not a bad thing. It is a part of life. Ideally we should all die in our sleep of old age after having watched our children grow, played with all our grandchildren and love and be loved in wonderful and fulfilling ways.  But this is out of our control.  What is in our control is what we leave behind for those we care about.

No one has a crystal ball.

There is no possibility to predict what position you or your loved ones will be in when you die. Financial, physical and emotional well being at some point in the future can not and should not be guessed at as part of a well designed plan. We also can not predict what will happen in our situation based upon what happened to another person. There are too many factors to guess at anything.

Control what you can control.

There are certain things that we have the ability to control. Taking the steps and making the decisions that are within our control should not be difficult and is fully our responsibility.

There are only two legal documents to choose from.

When it comes to making plans for your future a Will or a Trust are your only options. Both of these have upsides and downsides. If a person fails in getting one of these prior to their death, the state in which they live will give them a standard Will. It is seldom a good option.

Documents to protect us while we are alive.

yourself. A Power of Attorney gives the legal right to a person of your choosing to handle your business Three documents are crucial in choosing who will speak for you when you are unable to speak for affairs when you are unable. A Medical Power of Attorney / Medical Guardianship gives the legal right to a person of your choosing to speak on your behalf in regards to your medical care when you are unable. A Living Will / Medical Directive states your wishes regarding what life saving steps you choose to be performed on you to maintain your life as well as a variety of other medical decisions you have made for yourself.

There are often future costs because there are always future services.

Obtaining the right documents from a qualified Estate Planning Attorney is only the first step in proper planning. Lives change and if your documents  are to be effective they also need to change to properly reflect your wishes. Knowing what future costs will be is a wise and prudent move in making responsible plans.  Regular reviews, updates and end of life settlement are life events that require assistance. Skipping the first two only makes the last one more costly and more confusing. Planning for these necessary future services should be a part of the total plan, and is a gift to those you put in charge.


In Summary:
  • Making plans is an important part of life since no one can avoid the reality of death.
  • There are only two documents for you to choose from, so there is no reason to over analyze or procrastinate.
  • Estate Planning is a specialty. It is not financial planning. Seek advice from the proper people.
  • There are always future costs. Ask enough questions so that you understand all the costs for today, in the future and after you are gone.
  • Know who will be there to help both you and those who will need assistance after you die.
  • The biggest mistake people make is thinking they don’t have enough to cause a problem.

This short summary report is the beginning of your education about planning properly for your future while protecting yourself, your estate and those you love.