Live, Love, PrepareSubmitted by MD Wendell Wealth Partner on March 31st, 2014
By Mark Wendell
Life is finite and infinitely precious. Eleanor Roosevelt nailed it: “Yesterday is history. Tomorrow is a mystery. Today is a gift. That’s why we call it ‘the present.’ ”
If you knew the day your life will end, what would you do today? Would you give your time to mending strained relationships, or to unrealized personal goals you’ve set aside for too long? Would you liquidate assets to pay off debts to simplify your estate, or make a new investment likely to pay off in the short run or long run? Would you make risky investments or would you be conservative? Would you inform certain people of your situation? Would you reorganize your financial affairs, or put your current strategy into order to assure a seamless and worry-free transfer of your estate to your heirs? Would you review and revise certain important documents so that they reflect your current family situation?
Do you even know where to begin?
Happily, while making plans about life and aging matters is simply smart and considerate, the same process can address the contingency of successful living while aging. Just as we pay attention to a healthy diet and exercise, social and intellectual stimulation, and regular medical checkups to stay ahead of the hazards and natural aging, it’s also prudent to have flexible financial arrangements to cover the special challenges of longevity: the inevitable emergencies and unexpected developments, resources for a secure and fulfilling lifestyle, arrangements for long-term care that won’t burden one’s children, and provisions for grandchildren and great-grandchildren. Human beings are notorious for our capacity for denial and procrastination, especially when it comes to envisioning the elder stage and declining health. But age brings wisdom, and it’s certainly wise to plan ahead.
It’s also wise to realize you don’t have to bear the burden of planning alone. The first step is simple: Contact professionals well versed in financial and estate planning — qualified financial advisors and estate attorneys — and let them help you. Your job is to determine what’s really important to you, and then provide whatever documents your advisors will need to help you achieve those ends. Below is a twenty-point list of important items to assemble and review at least annually.
- Prepare a file containing auto, home, life, long term care, health/disability insurance policies, credit cards, passwords, driver’s license and professional/business licenses, social security cards, passports, bank and brokerage account information, tax returns for the past three years, marriage/divorce/prenuptial documents, car titles, real estate mortgages, deeds and leases, paper securities certificates and bonds, safety deposit box information, treasured pictures and letters, current will and trust documents, powers of attorney, healthcare directives, a list of miscellaneous assets, and final service instructions.
- Inventory all physical assets of value — homes and vehicles, artwork and heirlooms — and record them in a ledger, preferably with photos, titles, and bills of sale.
- Inventory all non-physical assets such as bank, investment, and retirement accounts, insurance policies, stock options, bonds and certificates, deferred compensation accounts, pensions, employer-related benefits descriptions, and children’s accounts.
- Review all insurance policies with professionals and update if necessary. Discuss the need for an Irrevocable Life Insurance Trust (ILIT).
- Review all trusts with professionals — a CPA, Estate Attorney, and a qualified Financial Advisor — for appropriateness and intent, especially for tax and inheritance planning. Amend the wording of such arrangements to take into account past experiences and recent developments, not only in your life, but also with the tax and probate laws.
- Review the beneficiaries specified on all investment and bank accounts, wills and trusts to make sure the people you intend to provide for are actually specified. Be sure to include Pour Over Will details for all items not specifically mentioned.
- Review TOD (transfer on death) and joint account designations with professionals to avoid unintended outcomes.
- Set up funds, trusts, special needs trusts, trustees, and guardians for your children’s needs. Specify detail caring arrangements for special-needs children in your absence.
- Compile an up-to-date list of debts and debtors. Include instructions for settling your children’s debts to you if this is important.
- Provide a list of current and planned commitments to charitable entities.
- In the event someone else might have to temporarily or permanently handle your health care, prepare an AHCD (advance health care directive) to provide legal guidance and to relieve loved ones of the burden of painful end-of-life decisions.
- Prepare a DPA (durable power of attorney) to enable others to make specific financial and legal decisions on your behalf during periods of incapacity and to include specific conservatorship provisions.
- Prepare a DNR (do not resuscitate) with the specific hospital with each patient admission.
- Prepare a Physicians Order for Life Sustaining Treatment (POLST) to give clear end-of-life instructions to your physician.
- Compile a contact list of professionals involved in your life, such as lawyers, financial advisors, CPAs, and religious counselors. Bear in mind it’s important that these people know that they are on your final contact list and that they might be called upon, so they’ll have up-to-date, first-hand knowledge of your situation and wishes.
- Prepare a list of friends and relatives you would like to be notified of your death.
- List executors, trustees, and estate administrators to carry out your wishes; don’t assume family or spouses are the best choice. Be sure to include these names in your Pour Over Will and Trust(s).
- Place with responsible parties for safe-keeping copies of wills and trusts or directions for locating originals, keys, or passwords.
- Conduct occasional family meetings with your financial and legal advisors present so that your family is aware of arrangements affecting them, and so you can make adjustments to legal documents when necessary as family situations change. Additionally, this is the forum to be sure that you’ve been clear in communicating your current intentions to your heirs. The added purpose of meetings is to allow for the development and on-going refinement of your legacy as well as to provide stewardship guidance for multi-general planning and education purposes. However, be aware that a conflict may exist if an attorney attends family meetings and may present an attorney/client privilege issue that may later result in problems should family litigation become necessary. Be sure to seek your attorney’s advisement on this issue before confidential meetings take place.
- Establish a legacy by conducting family meetings on “heritage planning” objectives with assistance from professionals. This involves the process of laying a foundation to prepare heirs to manage both financial and emotional inheritances. With proper attention, heritage planning serves as a vital step to help shape the financial and estate guiding principles for current and following generations. (For more on this often neglected topic, see articles titled “What Is Your Legacy?” and “Family Stewardship” on my website.)
- Prepare a final letter or video giving instructions for a funeral or a party, or simply to soothe the grief of those you leave behind. Among other websites, www.mywonderfullife.com can help you get started.
Lack of pre-death planning can easily result in lengthy, expensive, and unnecessary difficulties. Taking a little time today to work with financial and legal advisors can save much time, money, aggravation and heartache for your loved ones, reduce your own worries about a future beyond your control, and let you get back to savoring each precious moment of life.