EVERYTHING I KNOW about estate planning I learned in court.
As part of my litigation practice, I represent parties—often warring family members—involved in disputes over wills, trusts and family businesses. These disputes have common themes that teach important lessons about financial planning in general and estate planning in particular.
Driving these disputes is the enormous transfer of wealth—trillions of dollars—from the Greatest Generation to their children, grandchildren and great-grandchildren. Couple that wealth transfer with other demographic trends,
SHOULD LEAVING money to our children be a formal part of our financial strategy—or should we focus on our own wants and needs, and let the chips fall where they may?
My wife and I have four children ages 45 to 50. They’re all married and, between them, have 13 children ages five to 17. They’re also all college graduates, with almost the entire cost paid by my wife and me. Three have master’s degrees.
YOUR ESTATE PLAN specifies what you want done with your money and possessions after your death. But your life’s treasures extend beyond these material items—to your values, heritage, relationships, hopes, dreams, memories and stories. You can share some of this with family and friends through a legacy letter, sometimes called an “ethical will.”
Not long before my mother died, she wrote her legacy letter. She asked that it be read during her memorial service.
A FEW YEARS BACK, I found myself in the emergency room, thinking I had a serious condition. As I sat there, I worried about my family, including my wife and young children. If I didn’t come home, would my wife have a clear picture of our finances?
Fortunately, the health scare turned out to be a false alarm, but it was a wakeup call. Sure, I had an estate plan, but I realized that a binder full of legalese wasn’t enough.
IF YOU DESIGNATE beneficiaries for your retirement accounts, that’s usually a surefire way to pass those assets directly to your desired heirs without going through probate—but not always.
Because those beneficiary designations are so important, you should verify your choices every year in case there’s a change due to, say, marriage, birth, divorce or death. Especially marriage and divorce. Which brings me to a crucial issue: When dealing with IRA and 401(k) beneficiary designations,
I’VE BEEN INVOLVED in settling five estates. They ranged from insolvent to almost seven figures. Some were well-organized, but one took significant time and effort to settle. These experiences taught me a key lesson: An organized and easily understood estate is a gift to those you leave behind.
I’m not an estate planning attorney. I’ve dealt with a few and found them to be professional, empathetic and helpful. If you have a complicated financial life or family situation,
FOLLOWING MY husband’s death, I went from feeling prosperous to precarious in the space of a few short months. For decades, I’d had something extra in hand, beyond the minimum sum necessary to keep going. That sense of prosperity was now gone.
This wasn’t just my imagination. Studies have found that widows are significantly less wealthy than their married counterparts. One academic article notes, “The death of a spouse is an event that may precipitate a large decline in wealth.” Similarly,
I LIKE TO THINK my husband and I were savvy and careful when planning our estate. Yet anybody can make an occasional dumb mistake. That brings me to my next surprise in settling my husband’s affairs—and it came with an unfortunate legal bill.
As a couple, we’d established a revocable living trust at a young age, when death was a strictly theoretical idea. The trust eliminated the need for our estate to go through probate,
FROM LISTENING to financial talk radio shows, it seems the hot topic these days is the SECURE Act and how it’s hurt the middle class. One caller had $2 million in his IRA, and was worried about the impact of the stretch IRA’s elimination on his children and grandchildren.
What am I missing here? I thought IRAs were a vehicle to help average Americans save for their retirement, not an estate-planning tool. Under the new law,
AS IF ON CUE, Ebenezer Scrooge recently showed up in Washington, DC. The result wasn’t pretty.
A bill known as the SECURE Act, a favorite of the insurance industry, had been stuck in Congress all year. But suddenly, on Dec. 20, it got tacked onto another bill and signed into law. As far as I can tell, the primary beneficiaries of this new law, which heavily impacts retirement plans, will be the IRS and the insurance industry—but probably not you.
TWO WEEKS AFTER my husband’s death, we held a memorial service for local friends and family. Days later, after a reasonable amount of online research, I visited a car dealer.
It’s my experience that bringing at least one youngster along speeds up dealmaking, plus a parent can get unvarnished opinions about life in the backseat. So I brought along my 13-year-old. The two of us test drove two used cars and bought one of them.
WHEN STEWART MOTT died in 2008, his obituary in The New York Times described him as offbeat. That’s probably a fair description. Mott’s father, Charles Mott, had been one of the founding shareholders of General Motors. As a result, the younger Mott didn’t need to work and instead pursued other passions.
Among his many activities, Mott enjoyed political activism, but he wasn’t a strict partisan. To underscore this, he once brought both a live elephant and two donkeys to a fundraiser.
I HAD AN AUNT who did everything for her husband. She paid the bills, invested their money and oversaw the family budget, plus she did all the household chores.
They both liked this arrangement. It worked for them. But as they grew older, people were concerned about what would happen to Uncle Bob if he outlived my aunt. He depended on her for everything. How could he take care of himself?
My uncle could not operate a washing machine,
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,
ONLY ABOUT 40% of Americans have a will, including just 58% of those ages 53 to 71. The good news is, among those of us 72 and above, the percentage is much higher—81%.
Putting in place a will, trust documents, powers of attorney and so on is no easy task. I’ve been through the process twice and it’s not fun, mostly because a good attorney will ask a lot of uncomfortable questions you’d probably rather not think about—like,