Revealing Vulnerabilities Necessary to Create Appropriate Estate Plan

I often begin my initial consultations with a simple question. “What do we hope to accomplish today?” intend for that question to be more complex than who should receive what in your estate plan.  

The longer I practice estate planning law, the more that I find it to revolve around emotion and feelings than as a technical exercise to transfer wealth. Sure, when I was a young attorney, I learned all the techniques to minimize taxes, properly provide for spouse, and protect our progeny’s inheritance from the dangers of spendthrift beneficiaries, divorcing in-laws, and bad investments.  

When we’re first married and our children are young, life is relatively simple and so are our estate plans. Our major assets might include a residence, retirement account, and life insurance. Our relationships are fresh and straightforward. We worry over who will act as the guardian of our children if we should die in a plane crash.   

As we reach retirement age, it all becomes more complicated. We may still be in our first marriage, enjoying many years together. Or we may be in another relationship, complete with step-relations. Here, providing for our spouse to maintain her standard of living with the rest passed down to our own children and grandchildren isn’t so easy without having serious discussions and making hard decisions.   

Our children are no longer those rascals playing in the backyard, instead they’ve grown into adults who have their own strengths and weaknesses. They’ve married and perhaps divorced and have families. They may live near or far away, and our relationships with them are vastly different than what we may have imagined before they grew up.  

We worry about our grandchildren’s educations. College is so much more expensive today than ever. It’s difficult for a middle-class family to make ends meet when they have two or three children attending university within a few years of one another. Yet a college diploma remains a ticket to a better lifestyle in our economy.   

Our assets are a hodgepodge of complexity. We opened IRAs and 401(k) accounts that have minimum required distributions once we’re 72Florida homestead must be left to a spouse if we have one unless we have a nuptial agreement specifically waiving the constitutional and statutory descent and devise rules. We have bank accounts, investment accounts, second residences and, perhaps, rental properties. Life is good, but not simple. 

So when you sit down with me, your estate planning attorney, I need to know a few things. Not just who is supposed to get what.  

Rather, I want to know what you’re worried about. Most of us don’t want to think about our own demise. It’s ghoulish, and against human nature to do so. Yet, the thoughts creep in. What is it that keeps you awake at night when you think about leaving your loved ones behind? In the best of circumstances, what do you hope to leave them, what structure would you like to create? What structure will give you the feeling that you’ve left a platform enabling them to excel?  

How are the relationships between your family members? Does anyone have money issues? Marital problems? Have you loaned or gifted any substantial monies to one of your children and not the others? Some of my clients are hesitant to discuss these issues as they don’t want the other children to know, yet it’s important to your estate plan.    

This requires deep thinking and exposing vulnerabilities, both yours and your loved ones. What do you anticipate the emotions to look like following your demise between your surviving spouse and your children and grandchildren? How can your estate plan promote family harmony, and the values that you hold dear?  

That’s where I can help. When I hear from my clients what exactly it is that they’re thinking beyond the dollars and cents, we can get creative.   

Another aspect to estate planning is communication. Our culture discourages parents and children from talking about money. For some reason, it’s out of bounds. Some parents fear that if their children knew their net worth, then they might harbor expectations of gifts or assistance. That fear is compounded when our children don’t understand the amount of principal it takes to generate retirement income.  

Others fear becoming a burden to their loved ones. No one wants that. This is where having a team consisting of your financial advisor, CPA and estate planning attorney can illuminate a pathway to independence. But again, before we can guide someone down that path, we need to know what the emotions are. It requires revealing vulnerabilities.  

That’s why this whole process isn’t a transaction. It requires an ongoing relationship. Over time our family dynamics change, don’t they? Our assets fluctuate, as do our financial needs and desires. Tax laws change seemingly every year.  

So that’s where we begin. With a simple question. “What do you hope to accomplish today?” 

© 2020 Craig R. Hersch. Originally published in the Sanibel Island Sun.