Far too many people view estate planning as a way to bequeath “gifts” to future generations. There are properties and trusts and various types of accounts to be managed, and it’s up to you to determine how and what you what to gift to whom. What many people don’t necessarily consider, however, is that the very act of planning for the financial future of your family is its own gift.
Consider this article from Forbes.com (“What My Father’s Death Taught Me About Estate Planning”) in which an adult child of a hard-working man describes the financial lessons taught both before and after the father’s death. The father was a planner, and he decided to involve his daughter as much as possible, since she would be the executor of the estate. There were several “gifts” he provided his daughter in the form of education and preparation:
- The executor was already on his bank accounts. Dad gave her access and had her name included on the checks. That meant that it was easy for her to take over bill paying as he became sicker, and even after he passed away, she felt that it was “absolutely seamless” to take care of expenses. Being a true planner, Dad even placed enough money in the account to cover the bills for two years, just in case the home didn’t sell right away and needed to be maintained.
- She met the right people. The father discovered he was dying of cancer and had only a short time to live. In that time, he made sure that his executor had the opportunity to meet those who would play important roles in the dispersal of funds and property upon his death. In addition to the estate attorney, it makes sense for the executor to get to know insurance representatives, bankers, accountants, etc. When the time comes, the executor will be miles ahead of the game in knowing who to contact and what to expect from them.
- Dad anticipated legal fees. It’s quite common for attorney’s fees on an estate to run between three and five percent. This particular dad was savvy enough to negotiate a fee with his attorneys up front and then placed the amount into a separate account. When the executor needed to pay the attorney, she simply withdrew the funds rather than having to scramble around to try and make the situation work.
- The funeral and costs were planned in advance. Dad put together a master binder that included all of his funeral plans, right down to his obituary and photos. Many people are unaware that it costs money to place an obituary in the paper, and there were other unforeseen expenses. Fortunately, he recognized that this might be the case, and he left some extra money in a checking account precisely for that purpose.
Working with an estate planning attorney now can offer so much solace and support for your family and friends later. While this may be an extreme example of planning ahead, it is possible to do what will work for your situation. It truly is a gift that you can give your family that goes far beyond financial rewards.