MY FATHER-IN-LAW Carson was a stereotypical engineer—organized and precise. All four of his children know the motto “measure twice, cut once.” Carson applied these traits to his finances, which he managed on behalf of himself and Mary Jean, his wife. Mary Jean depended on this.
As they aged, Carson maintained his mental acuity, but he was the first of the two to deteriorate physically. Mary Jean was strong physically but slowly surrendered to Alzheimer’s.
MY HUSBAND AND I WERE late bloomers when it came to estate planning. Though we took care of the basics when we became parents, such as purchasing term life insurance and naming a guardian, we never had a professionally executed will and trust until 2016, when we were in our late 50s.
Observing my in-laws, now in their 80s, made us realize how important it was to get our own estate-planning house in order.
EVERYTHING I KNOW about managing money I learned in court. As part of my legal practice, I represent people involved in disputes over money or property. These can include claims against financial advisors for alleged misconduct, contested wills and trust disputes, and family members at odds over a family business.
These disputes can teach us important personal finance lessons. Here are four lessons—learned the hard way—from four cases my firm handled. All are based on an actual case,
HIGHLY INTELLIGENT people sometimes don’t know much about investing. Still, they can have a misplaced confidence in their own abilities and feel certain they require no help. In the end, it’s often their adult children who sort things out—which, in this particular case, meant me.
Five years ago, my 84-year-old mother and 85-year-old stepfather moved from the mountains of Colorado to Georgia to live closer to my wife and me. For more than 20 years,
THIS PAST SPRING, my brother Phil made the six-hour trip from our hometown in North Carolina to northern Virginia to visit our 95-year-old aunt, whom we know as Aunt Ina Lou. We hadn’t heard from her in a while, which was unusual.
Since we were children, she’d always sent us Christmas and birthday cards, and she’d missed some recently. Phil tried calling several times, but she hadn’t been answering her phone. This wasn’t particularly surprising since our aunt is almost deaf.
I CALL IT MY “BIG BOOK.” I got the name from a Washington Post article about compiling all the information your family will need to navigate your life, should you become incapacitated or after you die. It can include your will, insurance information, investments, real estate deeds, car titles—even who gets the family china handed down from Grandma.
I started my big book in Dropbox, the cloud filing service I can access from home or away.
I’M TOO EMBARRASSED to reveal how long it took my wife and me to prepare our wills. We knew this important task was near the top of almost every financial “to do” list—a list that, it seems, we’ve spent our adult lives slowly working our way through.
We’d discussed the details of our wills, including the crucial decision of who would care for our minor child in the event both of us died. Despite this,
I AM NOW AGE 78—the same age at which my father died 34 years ago. I’m starting to think about dying, though I have no immediate plans to do so.
Of course, my father effectively smoked himself to death, unleashing a combination of heart disease and emphysema. I’ve been a no-smoking zone my entire life. No, I’m not depressed and I’m not being maudlin. But if Queen Elizabeth can’t go on forever, what hope is there for us commoners?
THE WILLS, POWERS of attorney and advance directives drawn up for my wife and me were drafted according to the laws of another state—and were badly out-of-date.
For example, these various documents included guardianships for our then-young children, with a trust to make gradual payouts until they turned age 35. Both our children have since graduated college, become professionally employed and demonstrated they’re financially responsible.
Despite all that, I’m embarrassed to admit that we procrastinated over getting new wills.
WHAT HAPPENS WHEN a person dies without a will and there isn’t enough money to pay all of his or her debts? Who gets paid and who gets shorted?
I’d always heard that funeral expenses were the first priority, and then unsecured creditors got everything else. I’ve recently learned from personal experience that the rules are more complex—and more generous to widows and widowers.
A 60-year-old friend of mine recently died. He hadn’t written a will.
RULES OF THUMB and conventional wisdom often serve us well. But we should make sure they’re truly applicable to our situation.
Like many parents, my wife and I prepared our first estate planning documents when our children were young. The estate planning lawyer suggested a so-called AB trust. If we’d taken his advice, when one of us passed away, half of our joint assets would have gone into an irrevocable trust. The surviving spouse would get the income from that trust,
WHEN IT COMES to estate planning, folks with taxable estates—that is, with assets in excess of $12 million—tend to fall into one of two camps. The first recognize that their estates will have to hand the IRS 40 cents out of every dollar above that $12 million threshold. They also know that this limit is scheduled to be cut in half in 2026 and could be even lower in the future. As a result,
WHEN PEOPLE DISCUSS financial matters or take the “A Year to Live” class that I lead, there’s a common refrain: They don’t want to be a burden to their loved ones. They’re concerned about having enough money to take care of themselves when they’re older.
But even if we have plenty of money, we can still end up being a burden. How so? Our kids and other loved ones don’t want the stuff we’ve gathered over the years.
IN THE EARLY 1990s, my employer—an aerospace manufacturer—sent a small group of employees to Winnipeg, Canada, to help set up a production line. We were chosen because of our familiarity with the product involved.
The company provided us with a furnished apartment, a rental car and $40 a day for food. They flew us back home every two weeks, so we could take care of personal business. I’d fly to Los Angeles on Friday and return to Winnipeg on Monday.
ROUGHLY A QUARTER of my investment portfolio sits in three Roth retirement accounts. Ever since I first funded a Roth a dozen years ago, I’ve thought of this as money I’d avoid spending for as long as possible, so I milk maximum gain from the tax-free growth. But lately, it’s dawned on me that it’s highly unlikely I’ll ever dip into these accounts—and that realization has triggered a slew of investment decisions.
My three Roth accounts are all at Vanguard Group.