What do I Tell My Heirs?

When a client completes an estate plan, I am often asked whether they should give a copy of the documents to their children, or otherwise share the content.  Unless there is close relationship or unusual circumstances, I generally advise the client not to do so.  I do recommend that they give a copy of the Durable Power of Attorney and Health Care Proxy to both the primary and the alternate appointees, because those are documents that might have to be accessed quickly in the case of sudden illness or catastrophe. But otherwise,  I encourage clients to keep the contents of the other documents to themselves.  Even if assets are distributed equally among children, one may be appointed in a fiduciary role, which may insult another child.  One child may feel that he or she is entitled to more than their equal share.  One may have special needs that warrant giving such child a larger share of the estate.  There may be an asset (such as a vacation home) which some children want but others don’t.  Any or all of these, and many other circumstances, may create ill will among the children that the creator of the plan would rather avoid. There are myriad circumstances that warrant keeping the information private until death, so that the children have no opportunity to influence a parent to make changes during life time.  It is best to make your own assessment, and you may determine that keeping the information to yourself is the best course of action.

More on Digital Estate Planning

Last February I posted an entry about how to manage on-line accounts and social media sites after death.  The New York Times has caught up to me with this recent article:

http://www.nytimes.com/2014/07/03/technology/personaltech/how-to-digitally-avoid-taking-it-to-the-grave.html?emc=edit_tnt_20140702&nlid=10789246&tntemail0=y&_r=1

Worth reading.

Good Advice for College Graduates

This  isn't really within my usual range of topics, but as I watch both of my children graduate this spring, one from high school and one from college, I found this article of interest.
http://www.bostonglobe.com/business/2014/05/31/post-graduation-course-budgeting/wXMbYYRJmGPEWTfkxQ2wLM/story.html

It's Time To Have That Talk

As parents age, many families still have difficulty discussing end of life care.  Adult children don't like to think of their parents as mortal, and if they refuse to have the discussion, maybe mom or dad will never die.   Unfortunately, this is not true.  Perhaps the adult children feel that such a discussion is unnecessary.  Perhaps they are just too busy to find the time.  But many adult children become caregivers for their elderly parents, either physically, by having mom or dad move in with them, or administratively, by ensuring that mom and dad get the needed care elsewhere, such as in assisted living, or home with a caregiver.  It is very important for adult children to sit down with mom and dad and discuss a couple of things.  One is end-of-life care in the event of a terminal illness-- what medical interventions would they want, and not want, as they see the end of their life?  For this, a Health Care Proxy is an invaluable tool on which the adult children can rely for guidance, but it is no substitute for the conversation.  The other major topic is burial and funeral wishes.  Some wish to be buried in a plot, others wish to be cremated.  Some would like a funeral or memorial service, others do not.  Some would like visiting hours or shiva, others would prefer to skip those things.  By having the discussion with elderly parents ahead of time, when mom or dad passes away, the children will not have to guess what to do, especially at such an emotional time.  Most funeral homes offer advance arrangements, such as identifying a burial plot and discussing the type of services that will be needed.  This is difficult stuff, and losing a parent might be one of the greatest emotional challenges an adult child will ever face, but it is a gift you can give both to your parents and to yourself if you are armed with this information in advance. 

Estate Planning for the Childless

According to an August 2013 report from AARP, 11.6 percent of women ages 80 to 84 were childless in 2010. By 2030, the number will reach 16 percent. By 2010, the caregiver support ratio was more than seven potential caregivers for every person over 80 years old. By 2030, that ratio is projected to decline to four to one. By 2050, it’s expected to fall to three to one.  Children usually provide about 70 percent of long-term care.  But for those without children, alternate plans must be made.  The following article from the New York Times discusses those alternates.  http://www.nytimes.com/2014/02/15/your-money/the-childless-plan-for-their-fading-days.html?smid=fb-share.

Estate Planning in the Digital Age

Since the beginning of time, estate planning in some form has existed as even our biblical ancestors thought out which assets to leave to which individuals.  In recent times, planning has primarily involved the transfer of real estate, financial assets and personal property by will or trust.  As we have entered this new digital age, however, it behooves us to consider not only our tangible assets, but also our digital assets.

To begin with, most people these days keep information about assets in digital form.  Each of these accounts will be password protected, so the Personal Representative (PR) of the estate must have the passwords in order to access these accounts.  For this reason, the principal should keep a list not only of what assets they own, but also of the passwords for any and all accounts or assets that are accessed in digital form.  This list must, of course be kept in a safe place such as a jointly owned safe deposit box, a password protected document, or other secure location.

In addition to online information about assets, many people are now opting to receive bills only in online form and not by paper and mail.  This can result in bills not being paid if the PR is unaware of those bills, possibly accruing substantial late fees and interest or even having utilities shut off.  For that reason, it is also important that the principal maintain a list of all paperless bills, and passwords for each, so that the PR can be sure to pay any liabilities of the decedent without adverse effect. 

Further, some digital assets may have monetary value, such as online photos taken by a photographer, writings of an author, and the like.  It is suggested that the owner of such assets hold title in the name of a revocable trust to avoid the issue of probating the digital assets, which can be challenging.

Finally, there is the issue of social media.   Facebook, Twitter, LinkedIn or other accounts may continue life long after the person is deceased.    The PR should have the passwords to those accounts as well, so that they may be terminated once the owner is deceased or at some appropriate time thereafter.

So the message here is important.  Just as you should maintain a list of all tangible assets so that the PR may best administer your estate, so should you keep a list of all digital assets, accounts and other such items, with passwords, so that the PR will be able to locate and access all such assets and accounts for the most orderly management of your estate.

Get Your Affairs In Order

I recently heard a story from a couple in their 80's that struck me as interesting.  Though in relatively good health, they each have their maladies and one has started to develop some more serious health issues.  They recounted that in a recent visit to their primary care physician, in addition to the medical exam, the physician initiated a conversation with them about end-of-life issues.  "You are nearer to the end than to the beginning", said the physician.  "Do you have all of your affairs in order, including estate planning, burial wishes and arrangements and the like?"  I was taken somewhat aback, but quite pleased,  by this story, as it had not occurred to me that this was advice that would come from a physician.  I was happy to hear that the physician was advising the couple on how to prepare for their end not only in a medical context but in an overall life context.  I commend this physician on doing so and hope this is a common practice in geriatric medicine.

As I have often said, particularly to elderly clients, putting your affairs in order, having a complete estate plan, and sharing your wishes for end-of-life care with your loved ones are all immense gifts you can give to them.   As children and grandchildren must mourn the loss and adjust to life without their loved one, it is an additional burden to have to go on a treasure hunt to gather information about the estate of the deceased and deal with a disorganized probate process to transfer assets.  It is also imperative for parents of minor children to establish guardianships and a method of managing assets for the benefit of the children while they are young.  For this reason, I highly recommend that everyone, regardless of age, take the time and effort to establish an estate plan that will allow for the orderly administration of an estate in the event of a loss.   Life is precious but fleeting, and one never knows when it might be taken, whether expected or otherwise.  I specialize in compassionate,  comprehensive and competent assistance with these matters.  Make it your new year's resolution to call me and take care of this work in 2014.