Before you Go

SEVEN PRACTICAL LESSONS REGARDING ESTATE SETTLEMENT & TRUST ADMINISTRATION

Lesson #1: Someday…you will die.

It seems harsh, but it’s a reality we all face. If you don’t agree, then estate planning may seem unnecessary. However, if you accept the fact that you won’t be alive forever, you should keep reading.

When we die, someone will be asked to pick up the pieces (at least financially). Therefore, why would you want to leave anything to chance? It’s your legacy, shouldn’t you exercise control over it? If you were to die tomorrow, how confident are you that your wishes would be carried out to your liking? Does your family know everything about your life they should? What will your legacy be?

If the answer to any of these questions makes you uneasy, it may be time to start planning.

Lesson #2: Estate Planning is for everyone (see Lesson #1).

Everyone has a reason NOT to do their estate plan. And chances are, most planners have heard them all. Some of the most common are as follows:

• I can’t die – I’m needed here
• Talking about my death is depressing
• I don’t have enough money to bother with estate planning
• I have no family
• My estate is simple
• My family will know what to do
• Everyone in my family gets along, so there won’t be any issues
• Estate planning is expensive

Despite these, and many other, objections to doing your estate plan; the ramifications of dying without any plan (or “intestate”) can be dismal. A great estate plan just may be the best gift you leave your descendants.

Lesson #3: Your concerns about your family are not unique.

Every family has quirks. Period. So you don’t need to feel embarrassed about yours. Any advisor you visit has likely seen the worst of the worst – several times over. Some of the issues advisors see regularly include:

• The family spendthrift
• Litigation
• Divorce
• Alienation
• Trouble with a child’s spouse
• Addiction or substance abuse
• Special Needs Issues
• Favoritism
• Alzheimer’s or dementia

Do any of these look familiar? They should, because nearly everyone has had to deal with at least one of these. If you are affected by one or more of these issues, you have two choices: (1) You can cross your fingers and hope for the best, or (2) You can make a plan.

Lesson #4: Words matter, so choose them wisely.

After you’re gone, your chosen executor or trustee can consider only the words within the four corners of your estate planning documents. To highlight the importance one word can make, consider the word “education.” Most trust documents provide for it, but what does it mean? Does “education” mean college only? For how long? Is it limited to traditional college programs only? What about private versus public tuition? Are advanced degrees covered? Travel abroad?

Words matter. Therefore, it may be beneficial to provide further explanation of your intentions now in order to avoid confusion later.

Lesson #5: In the end, it’s not about the stuff.

After you’re gone, your earthly possessions will remain. Those possessions are the most common catalysts for family dispute. Why is that, you may ask? In my experience, most property disputes have very little to do with the property. Rather, the family has simply chosen this as an opportunity to air their grievances. Maybe they feel that they were treated unfairly during life. Maybe they believe one sibling was unjustly favored. Or maybe they feel they received less than entitled to from their parents’ estate. There are a million reasons why conflict could erupt when dividing up the personal property. But chances are the fight won’t be over the property itself. It’s for this reason that advisors regularly suggest completing a list of personal property you wish to go to specific individuals. That list may go a long way in helping alleviate many disputes and hurt feelings over the “stuff” you leave behind.

Lesson #6: Just because your documents are signed, it doesn’t mean your work is done.

If your estate plan includes a trust that will be funded during your life, your attorney will likely advise you that all assets that will be held in the trust must first be retitled in the name of said trust. The reason is this: If your goal is to avoid probate, you must get all your assets out of your name prior to death. For instance, if your investment account or real estate is in your name only at the time of your death, probate will likely be necessary in order to get those assets from your estate into your trust. But, had you retitled your assets in the name of the trust during your life, a probate may be avoided.

Lesson #7: In most cases, it’s a good idea to discuss your wishes with your family before it’s too late.

The final lesson is that it is generally a good idea to have an open and candid conversation with your family regarding your estate plan during your life. Admittedly, this conversation will most likely be uncomfortable – for everyone. However, it is far better to set the proper expectations early and not let the reading of the Will be the first time your descendants learn of your wishes. Grief can turn to anger very quickly. Strive to provide your family with the opportunity to grieve their loss rather than experience feelings of anger and resentment over how they were treated in your estate.

As with all estate planning issues, it is always a good idea to discuss them with your estate planning attorney as they arise.