Living Trusts

The End?

I’m not trying to be controversial or shocking by using an image of a tombstone, but I am trying to address a fact-of-life with a bit of humor, and also point out that sometimes people wait too long to plan. We’ve all got to go sometime! We don’t like to talk or think about it too much, but it is true. The fact is that we can go at any time whether it is from natural causes, while traveling, or – quite frankly – while driving home from work. If something were to happen to you today, ask yourself “how would my kids handle the sudden windfall of money?” Would they be completely responsible, or would there be a sports car, a bad marriage, and a trip to Las Vegas in their future? Perhaps they’d land somewhere in the middle, but even the middle can be wasteful. I remember how I was when I was younger, how about you? There are more reasons to create an estate plan than just preventing wasteful spending, but you have to admit it is a compelling reason! I’ll touch on more of the reasons to create an estate plan below. The bottom line is that we should care for our family and do a bit of planning before we wait too long and find ourselves at The End.

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Dan Powell 1-619-980-2297

Have you ever had someone close to you die? Did they have any estate planning in place?

I can show you 5 ways to make your passing easier on those you love, but more on that in a moment.

So, what did you learn when the person close to you passed? If they didn’t have any estate planning in place, I’m sure you learned what a mess that a failure to plan created – with the additional loss of time and loss of money. If one plans with just a Will, or fails to plan at all, then Probate must be opened and completed. The only exceptions to having to go through Probate are when the decedent owns less than $150,000 in assets, or when a spouse is the first to die, and all of that spouse’s assets are held in the proper manner and pass directly to the surviving spouse. (There are various limitations, qualifications, and potential pitfalls to those two exceptions that won’t be discussed here, but you can see my blog for more on these subjects.)

So, do you remember those 5 ways you can make your passing easier on those you love that I mentioned earlier? Here is the first, and the rest will follow.

1. Use Estate Planning to Show Your Love

That statement “use estate planning to show your love” sounds kind of odd, doesn’t it? Let me tell you a story. I lost all of my grandparents when I was fairly young. The first of my grandparents to pass left me some money. I pretty nice gift, and a pretty sizable sum. Now I didn’t run out to Las Vegas, but I did spend the money (they could have or even should have left me the money in trust!) I didn’t just “blow” the money in my opinion because I purchased some recording gear – a serious hobby that I still participate in, but I spent it all nonetheless. I really enjoyed the gift and what I purchased with that gift.

Now, when my other two grandparents passed, I received a gift that was quite different, and it brought me to tears. It was a medicine bottle with about 20 pennies in it. It has a label on it that is a piece of paper with my grandmothers handwriting, Scotch taped to the bottle that reads – “Some game George and Danny used to play”. My mom found it more than twenty years after grandma passed away, handed it to me, and then that gift went directly into my safe. Comparing the two by means of monetary value is actually no comparison. Likewise, comparing the two in terms of emotional connection, and there is – again – no comparison. The fact that my grandma cared enough to save something like that… that I can hold those very pennies in my hand brings my granddad front-and-center in my mind and I am playing with granddad at the kitchen table again.

The only problem was that grandma just left the bottle in a box, and gave no instructions. As a matter of fact, it was years after her passing that my mom found the bottle and gave it to me. They could have been lost in time forever. As it turned out, they were only lost for 20 years. Still a risk I wish grandma hadn’t taken. Both sets of grandparents could have shown they cared by doing a little more planning.

In your Estate Plan, we can leave specific items to specific people (just like my grandma should have done!) but we can also leave money with either specific instructions on how it is to be used, or with general guidelines or suggestions such as “we hope you will use this money to take family trips to Disneyland like we used to do, and think of us when you do so”. We can also do any number of combinations of the two methods.

Another way to show we care is to pick who will raise our minor children by naming a guardian in our estate planning documents. That is pretty important, and most people would rather decide who raises their children instead of letting the courts decide for them.

Aside from making sure your beneficiaries receive their gifts, we can use estate planning to make sure we add a layer of protection for our beneficiaries against creditors, predators, bad marriages, and wasteful spending.

The second way we can use Estate Planning to make your passing easier on those you love is next.

2. Make the difficult medical decisions regarding your care instead of making your loved ones make them for you.

In the estate plans I create, I always include an Advance Healthcare Directive (sometimes called a Living Will, AHCD, or AHD) for each of my clients. When a family member of mine recently passed, he had no Advance Healthcare Directive in place. Soon after he passed, the hospital started calling his son to ask if his father would have wanted to donate his retinas. Apparently, the decision must be made quickly because the retinas must be removed within an hour or two for them to have viability. Thus, the hospital was fairly persistent in their phones calls to his son. I watched all of this happen, and thought to myself that all of these decisions could have been made by the father ahead of time to prevent the burden that gets imposed on family members in times of grieving. Why push this burden onto family members? One more thing to consider is that among three of the leading cases that involved end-of-life care (remember Terri Schiavo?) all of the patients were under 40, and Terri Schiavo was just 26 years old when she suffered her initial injury that started the 15 year-long battle over her care. Again, preventable.

3. Save them the lost time and money that probate will take from them

Simply put, probate costs money, and takes time. Even a modest estate can cost $10,000 to $20,000 and up, and can take a year or even longer to complete. A proper estate plan is much more affordable, and certainly saves huge amounts of time compared to having to go through probate. Also, with a proper estate plan, funds and other resources won’t be tied up and inaccessible like they will be with an estate that must be probated.

Often times access to money and the ability to liquidate assets is needed to take care of immediate expenses.

4. Care for yourself so you can live how you like and not create a financial burden on those you love

One more scenario to consider when contemplating your future is what will happen to you and your family should you become incapacitated due to dementia, Alzheimer’s disease, or some other incapacity? I have seen it happen, and I would think that you have too. Mom is the last surviving spouse, and becomes incapacitated due to dementia. Now what? If mom has no estate planning in place, then the family may be stuck. If one loses mental capacity and has done no estate planning, then creating an estate plan, or transferring assets (like selling a home) is usually very difficult or impossible. Moreover, we have all heard of the unscrupulous family member that loots the parent’s estate, and puts the parent or parents that have lost capacity in a horrible living environment, or in a place that the parent never considered or desired. Perhaps they wished to remain in their own home for as long as possible, and wanted to use their own assets to pay for the increased cost of such care. There is nothing wrong with living the end of your life how you want. You have the power to dictate how your estate is consumed in order to provide the kind of long-term-care you desire. Planning for incapacity is growing in importance everyday with more and more people living longer lives, and the costs of long-term-care skyrocketing. Wouldn’t you like to decide and control how and where you live out your remaining years?

5. With proper planning, we can help keep peace within the family and potentially eliminate fighting.

When decisions are made, and a plan is established, we can potentially eliminate fighting. I’m sure you don’t have to be an estate planning attorney like myself to know that when someone passes, and money (even a little bit of money) is involved, the attitudes change, and people can come out of the woodwork. Let’s not let that happen. Also, when the decisions are made in advance, most of the time the beneficiaries will say “well, that’s how mom and dad wanted it”. This is a good thing no matter if we are talking about a lot of money, a grandfather clock, or a pocket knife!

Planning is important. Caring for yourself and your family is important.


Give me a call today and let’s get started.
I answer my own phone, and I even make house calls!

Dan Powell