Paul Hechinger is writing a good series on some of the basic issues on estate planning from the client’s perspective. In his August 6, 2015 posting in Financial Planning, he acknowledges the fear and anxiety many individuals face when considering estate planning. These, he states, can lead to procrastination, indecision and inattention. The article is a good, quick read, and I recommend the series he has produced thus far.
I would like to add one more item to his list of stumbling blocks that fear and anxiety can cause: intentional lack of information, or the ‘head in the sand,’ syndrome.
There is a lot of good information out there. The internet is full of information, advice and sales pitches on estate planning, but it can be hard to know what is good advice for you and what is merely a good sales pitch. Common sense should play a big part in evaluating some of the information and advice out there – if it sounds too good to be true, it probably is. However, keep looking to reputable sources and articles for information. You may want to keep copies of information, or at least bookmark the sources. When you do contact an estate planner, don’t be afraid to take that information with you into a meeting.
Further, estate planning is not a one-size-fits-all proposition. For example, planning for long-term care costs will differ widely depending on the assets you have available. For those with modest means, planning for Medicaid may be the best option, and that planning should start early because of the Medicaid look-back period. For those with more assets, but maybe not enough assets to cover all the costs of long-term care out-of-pocket, long-term care insurance can offer good planning to meet some of those costs. Others with more means may simply decide to self-insure, meaning they will cover the costs with the assets they have. Any search for information should keep in mind your own situation.
Having information will help you to overcome that ‘head in the sand’ syndrome.
One other source of information that might be more of a stumbling block is an advisor, be they an attorney, a financial planner or an accountant. While there will be expenses involved, they are nothing compared to some of the potential costs of not planning, or working with an old estate plan that no longer fits your needs.
For example, assets, such as bank or investment accounts, may pass outside of a will or probate by using ‘payable on death’ designations. Great idea, right? Maybe not. If different designees are on each account, but some of those accounts are drained because of living expenses or nursing home care, the accounts left will only go to the designee on that account, meaning a child or even a spouse may be unintentionally left out.
A professional advisor can see and recognize these situations, and point them out to you. They can also point out options that you may not have found, or that you thought did not apply to you. An estate planner can also provide a comprehensive plan to address your needs instead of a piecemeal approach. While the idea approaching someone for assistance can lead to “procrastination, indecision and inattention,” (did I mention that the article above really is full of good information?) an estate planner can also provide timely, relevant information for your situation. Arming yourself with pertinent, applicable information is the best way to boost your confidence level and face any decision.
How do you overcome the stumbling block and contact an estate planner? Find someone you feel comfortable working with. Instead of looking at estate planning as a series of hurdles, you need to take control of your situation, and find someone who can advise you on meeting your needs. For example, I work with many couples who have busy families, and time is an extremely valuable commodity for them. I make house calls because these clients do not have the time to make it to an office, find a babysitter, and get everything else done in any 24-hour period. Some clients may need continuous support while they are in the estate planning process, including setting deadlines, setting up decision trees and keeping the process moving. Other clients simply need all of the options laid out before they will consider the ones that work best for them. Do not be afraid to speak with several attorneys until you find the one that will listen, and who can communicate with you, not at you.
One definite warning sign: someone trying to sell you planning that you feel uncomfortable with. This may be the planning itself, or possibly the over-involvement of the planner. You may be uncomfortable with the idea of a trust, and if the planner cannot explain and address that uneasiness, you need to find someone else. In addition, most attorneys will only act as a personal representative or executor of an estate, or as the trustee of a trust, as a last resort, not as a first choice. These represent additional fees for the attorney, and may not represent your best interests. The solution is to look for another advisor.
Finally, and this is a restatement of a point in Paul Heckinger’s article, estate planning is an on-going process. Very rarely is everything set in stone and unchangeable. As your situation changes, so should your planning. It is a good idea to touch base with your advisor every few years, or if there is a major change in your life, such as an inheritance, a change in your family situation, or just an extended lapse of time. Many estate planners will contact their clients every few years, just as a reminder that they need to think about any changes in their life that might affect estate planning. It is well worth the ten minutes it will take to look back over your life in the past several years and note any changes that may impact your estate planning, and to make that call.
Originally published 8/9/2015.