By Ilyce Glink and Samuel J. Tamkin | Washington Post
My mom just passed away just shy of 105 years of age and her estate is a mess. I don’t want to make the same uninformed errors with my estate, so I need to plan and execute documents for my estate. Can you give me any suggestions?
First of all, our condolences on your loss. Sometimes it takes life-changing events to make us realize the importance of getting our finances and other personal matters in order. We think it’s a great thing for you to realize the need for you to order your estate and plan for the future. There are various underlying matters that come to mind when we hear people talk about getting their estate in order.
We’d like to start with a pretty simple issue that can really cause people trouble. Before we even talk about wills, trusts and other legal documents you might need or want for your estate, we’d suggest you start with your personal effects and personal financial organization. If you think that having an estate well-organized from a legal perspective is all you need, you’re going to fight an uphill battle. You also need to have good organization in your documents and files.
Great starting point of matters to consider when considering your estate plan. I will add two more:
1. Online Accounts: the article mentions having personal documents in order to ease administration. While this is great advice, increasingly we receive bills, account statements, and the like via email communication, which creates the necessity to not just have our physical papers in order, but our online accounts in order as well. For your family’s sake, make certain the individual(s) you would expect to help manage your affairs on your behalf know your passwords—or at least where to find them. They will need to be able to long onto your computer, check your email, log into your online banking accounts, investment accounts, online insurance profiles, etc. This is part of the modern-day equivalent of having your documents in order “with neatly labeled files.”
2. Disability Planning: Much of this article focuses on transfers of assets upon the death of the asset’s owner. Of course, estate planning addresses this issue, but also addresses a critical issue of managing assets on behalf of their owner while the owner may be incapacitated, yet alive. A will cannot accomplish this because a will is a Testamentary Instrument, meaning it is only activated by the death of the will-maker. Pay-on-death beneficiary designations are likewise Testamentary planning techniques, and thus have no effect until the death of the property owner. Among other reasons, a living trust tends to be the most holistic estate planning tool by the very fact that the trust becomes active upon its creation and can address property management while the trust-maker is alive.
Lastly, a comment: the article makes the following statement, “Your next step is to make sure that what you own gets passed down according to your wishes.” I have had enough conversations about estate planning with all sorts of people to know that to many, this statement sounds petty. Why would you feel a need to control where your assets go after your death? Why should you care at that point? For those who resonate with this concern, I invite you to not think of your estate plan as a means of controlling your beneficiaries, but as a means of supporting your beneficiaries through an inherently difficult, and potentially divisive time in their lives. Articulating the allocation of your assets upon your death relieves your beneficiaries of the challenge of deciding what should happen to your property. These decisions are difficult to make and emotionally charged. The clarity of your estate plan case eases the transition and supports the relationships between your beneficiaries.
~ Tim Heileman