Estate planning done right
January 17, 2012
A reader story on Get Rich Slowly was the most impressive set up of an estate for an executor I have ever seen.
Her father familiarized her with all of his key financial people, negotiated legal and funeral fees, made all the funeral arrangements that he could prepay himself, keeping all the necessary copies of records for her, and settled his money on the children in such a way that accounted for the extra work that she’d be doing as the executor.
He outlined and folder-tabbed the process of settling all the major and most of the minor aspects of the impact of his death on their lives long before he passed. If that’s not love, I don’t know what is.
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For my side of the family, I had nothing but the funeral to settle and pay for when Mom passed, because I had long taken financial responsibility for just about everything else. The funeral arrangements still cost a fair amount of money, not to mention the travel and other costs.
Dad is now free to earn a bit of a living for himself, and is doing so, but there is no expectation on my part that his efforts will yield more than enough to pay for his basic needs, and just some of them at that.
I’m the first in my family to worry about any kind of estate planning and while I have the framework mentally shaped, it is nowhere near the level of organization that I know a true, developed estate will one day require. And for the moment, that’s ok. My own finances weren’t there yet a few years ago when I started the process, and neither are ours right now. I will be taking the post shared by Jody as a blueprint.
For PiC’s side of the family, we have no clue what the estate plan looks like. As they actually have some sort of family money, that scares me at least a little bit. I have no interest in the money or the estate itself. Marrying into money of any kind was the last thing this Make-it-Entirely-on-Your-Own girl wanted, but I do have concerns as a principle.
Handling any estate is a fair job and handling one with any real value well requires time and diligence that I just don’t see at anyone’s disposal. And by George, I can only imagine the mess of sorting an unfamiliar estate when you haven’t got any of the groundwork laid. Because of this, I’ve long encouraged PiC to have a conversation with his parent and siblings. They should have a clue about where to begin, end, and how the middle bits join up.
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One good friend’s elderly mother, now in her mid 90s, is comfortably well off but frets over saving her pennies. There’s no good reason to, my friend scolds, her children most certainly don’t need, want or expect any money from her so she shouldn’t have to worry about anything but keeping her health and enjoying her days.
Another friend is into her 70s and is hale and hearty but is still working. Partly because of a late in her years divorce which left her financially stranded, partly because it keeps her busy. I don’t know if she’s also trying to leave something to her children.
Friends in our cohort who are just starting out with young families are just saving or new to investing and haven’t really begun “disaster” planning yet. To my mind, though, anyone with dependents really has to get that set down on paper. I would never want to assume that my children would automatically go to the surrogate parent or family of my choice without making certain of it and be raised or supported in the way I hoped. There’s no guarantee that an estate plan wouldn’t going to be needed until the children were well into their adult lives and were ready to assume the relevant duties of executor or help as necessary.
For me and Snork Maiden we don’t have wills and Snork Maiden doesn’t want to hear any details about the finances… Kind of burying head in the sand. So there are a couple of files on my computer with all the relevant information. I told her it’s on the computer.
For my Mom, yes there is a will and my brother and I manage the money and know where it is. She has early stages of dementia…. We are still tidying up from my Dad’s estate – he died 10 years ago this year. The problem is having investments in other countries than where you die and whether they accept the documentation. We have hired a lawyer now to sort out the situation in the UK. So we have been trying to make sure that things are organized.
Bill and I have each written a will with the bare bones and appointing an executor (his poor son). We have neither yet done the rest that really must be done, a document that gives the details or a Letter of Wishes. This latter is something here in Britain that is not ‘legally binding’ but is ‘morally binding’. I think that means it would be a good tool to use if one wished to dispute the distribution of assets were it not followed. I don’t expect there to be great wealth left when we’re gone, as we’d not got that amassed before we retired, but I do think it is important to make the executor’s task as straightforward as possible.
We’ve not made our own funeral arrangements either, which I think is a kind thing to do. I’m sure it’s a bit strange, but no weirder than writing a will and realising that one day one will no longer exist… Cheerful topic! But necessary.
We have a will, which we will have to get updated this summer. It’s got the important things like custody of our kid (DH’s brother and sister-in-law) and who gets custody of his money (my sister).
Sidenote: I got the word verification wrong… so the new one it gives me? moron. What is it trying to tell me?
My parents asked me to be their executor and haven’t gone over any paperwork or any special instructions they may have. I want to ask them what exactly they’d like me to do…but feel uncomfortable asking them about it.
We have nothing prepared/written up for ourselves, though I keep thinking we should write wills at some point. Honestly, though, we have so little right now that I don’t worry about it too much. Almost all of our money is in a joint account, we do have designated beneficiaries for our IRAs, and basically everything else is in both of our names, so if something were to happen to one of us, it shouldn’t be overly difficult to figure out (I mean, aside from the inherent difficulty of a loss like that). We know each others’ wishes about end of life care and stuff, and so do our parents.
The first time my parents took a trip together without me when I was in college, my dad walked me through all of their accounts and wills and everything. I didn’t know much about it then, but I at least knew where everything was, and who to contact at each relevant institution. It really freaked my brother out (he was 13ish, sitting in the kitchen while we were going over everything), but it is good to know what I’d be dealing with if something happened. We’ve also gone through this stuff (myself, my sister, and my parents) with 2 of my 3 sets of grandparents in the last 5-10 years, and they all have their funeral arrangements pre-paid. The other set…well, let’s just say that it will not be an easy time when they pass.
Rina – If they’ve named you as executor, they’ve dealt with the issues. I think they would probably love it if you asked if there was anything you needed to know or do to prepare for that job. They’ll want to make it as easy for you as possible, I’m sure, and I would think they’d feel comforted that you were going to take the responsibility seriously. Just my thoughts.