Naming Names

Dennis Friedman

I JUST WENT TO SEE a lawyer about making changes to my trust and will. It’s been some 20 years since I had my revocable living trust drawn up, and a lot of things in my life have changed since then. 

For most folks, it’s difficult to decide how they want their estate distributed upon their death. Consider five questions:

  • Should the division of your assets be based solely on relationships, leaving your assets to immediate family, your lover or perhaps close friends who are an important part of your life?
  • Should you consider how people treated you?
  • Should you base the distribution of your estate on each person’s financial needs?
  • If you have children, should each get an equal share, so there are no hard feelings?
  • If you have grandchildren, do you leave money for their college education?

For some people, it’s an easy decision. I have a friend who has a son and daughter. He says he hasn’t seen his daughter in about 30 years. He has never seen his grandchildren, who are ages 25 and 28. The only time he talks to his daughter is when she needs money.

Meanwhile, he has a close relationship with his son, who looks after him and provides companionship. He decided to give his son everything, except $5,000 for his daughter. His rationale: She may be his daughter by blood, but she doesn’t behave like one in real life.

I have another friend who passed away last year. He has no family, except for a nephew who lives in another state. He had a girlfriend who took him to all his doctor’s appointments and chemotherapy treatments. She cared for him until the very end. Although his girlfriend stayed with him and provided him comfort, he gave his whole estate to his nephew.

The upshot: For some people, the decision on how to distribute their wealth is based solely on family. For others, it’s about how they are treated by family, close friends and loved ones. There is no one formula that everyone should follow. It’s your perception of what’s fair that counts.

Personally, I would not feel hurt or slighted if my mother left my sister more than she left me. I know how much I receive from my mother’s estate doesn’t equate with how much she loves me.

I decided to distribute my own estate based primarily on three criteria. First, I want to leave my wealth to the people who were an important part of my life. Second, I want it to reflect how I’ve been treated by them. Third, I want to do so based on need.

One surprising result: Currently, a major beneficiary of my estate is my 95-year-old mother. She depends primarily on me for care. Without my help, she would need to pay for a caregiver. I would leave her enough money to make sure she’s taken care of. I’m also thinking of providing an open letter, so I can explain my decisions.

When you’re planning your estate, don’t forget about the possessions that aren’t listed in your will—things like photos, furniture, keepsakes and jewelry. They may be just as valuable to your family as your portfolio and your real estate. Indeed, the arguments over these items can cause just as much friction among loved ones. The important thing to remember: These are your assets—and it should be your decision how they’re distributed after your death.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Blame GameNot as Advertised and A Fine Example. Follow Dennis on Twitter @DMFrie.

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