Estate Planning Meditations Perspectives
Winnetka Estate Planning Attorney
Putting Estate Planning in Perspective
Death is an inevitable part of life and the destination we all share. The physical timeline of life moves inexorably in that one direction. This is the end of the journey that each life takes. Nobody can escape it. Not the most powerful athlete, the richest person, the most beloved, the wisest, or the youngest. From this perspective, not thinking about it makes no sense.
Estate Planning Meditations to Consider
While inescapable for us all, death's timing is unknown by the vast majority. I may be dead when you read this, but you haven't gotten there, yet. At this moment, your demise may seem abstract or unimaginably remote, but you must realize that it could be lurking around the corner.
You may not know when or how, but at some point you will die. Accept this and free your mind from dread. Fully acknowledging death intensifies life and lets you enjoy each day to the fullest. You will tell people that you love them more often. You won't get as worked up by little things, like being stuck in a line or cut off in traffic. Whether you die two weeks from Thursday in your bathtub or thirty years from now finally celebrating a Cubs World Series championship, it's going to happen.
The truth of the matter is that estate plan or not - loved ones will continue to live their lives, making everyday plans that do not include you. If that hurts to consider, use estate planning to soothe your angst, perpetuate your spirit, cast your shadow, and sharpen your legacy among those you love. It is probably most concrete step you can take right now to achieve your life goals.
One of the most useful estate planning meditations is to ask your self: "What can I do right now to prepare for what follows my death?" You may find that such a question gives immediate rise to spiritual answers. A spiritual mindset is a helpful ingredient to participating in this exercise.
Mr. McKenzie allocated a few thousand dollars to have a memorial party (he could have made the party annual, with a substantial "party pushkie" if there had been enough thousands) at his beach house. His trustee, via some direction in the trust, paid for transportation, food, drink and lodging. In some sense he really is still with them. Their lives continue without him, but Mac's spirit lives on more intensely thanks to his thoughtful planning.
Death, Dying, and the Grief of the Survivors
It's not death itself that's difficult, but rather the process of dying and the grief of the survivors. Ideally we would all be blessed by a long and healthy life followed by a painless death, but unless it is imminently expected or you are living in a war zone, you simply cannot know when the end will arrive. When you're planning, think about being gone, not how or when you're going to get there.
If you can acknowledge your own impending mortality with a clear eye, you can transcend some of its more painful aspects. Plan for your death as if today is your last day on Earth and you may find that the prospect of your finality is less grim. Planning can even be fun, if not riotously so.
As you live, you exert influence on those whose lives you touch, generated by the big and little actions you take every day. The people who most obviously feel your presence are those closest to you, but there are others - slight relationships and influences, consisting of little more than a glance, a few words spoken or exchanged, ephemeral and non-existent connections on their surface but still important nonetheless.
The entire package of your life-influences comprises your legacy. Just as your legacy doesn't begin at your death, neither does it end at that moment. Directly or subtly, your karma/shadow will continue after you are physically gone. Open your inner eye and picture life continuing without you. Estate planning can extend and sharpen your legacy, casting your astral self into a future path. It can also prevent tremendous heartache for those you love.
Consider the good things you have done for your loved ones and the greater community. An estate plan allows you to add a vibe that will live far past your expiration date, in the hearts of close loved ones and the "other".
It's Not Just About Money
Though an estate plan directs the flow of your assets, large and small; though it may save taxes; and though it can even, ultimately, help save you from lawyers and courts, it can encompass much more than that if you take a broad perspective.
It's your understanding of life that ultimately allows you to make a meaningful estate plan in preparation for death. Look at planning as an opportunity to reach objectives that serve your greatest aspirations. You can help others, make the world better and enshrine your place in your community. Serious and creative planning can help you do something extraordinary-or at least deliberate-after you die. Extend your life force and moment on this earth in your own small-or large-way.
You may not enjoy the prospect of planning for your potential incapacity and certain death, but failure to act can have long-lasting reverberations and leave attainable dreams unfulfilled. Moving estate planning from your general "to do" list to the top of the list may involve some pain, but consider the relief and satisfaction of removing this nagging piece of unfinished business from the fuzzy back of your mental shelf. We all prioritize, but consider that death (and sometimes incapacity) is a deadline that can hit with no warning, leaving your family to adapt to the consequences.
Though it takes effort and sometimes courage to plan your estate, you'll find there's an upside. You will feel more in control and secure because there's one less thing rattling around in your mind. You can rest, knowing that exerting the effort can help your family avert big logistical problems in the future. Inaction, in contrast, can lead to unintended if often foreseeable nightmare scenarios.
Unlikely as it might be, you could die on your next trip to the store or soon after this narrative puts you to sleep.Acknowledge the inevitability of death now as the only common denominator among all of us. It may be age- and health- appropriate, or it may be random, sudden and unexpected.
People close to death ask:
- Was mine a good life?
- Did I leave the world a better place?
- Will people remember me well?
If you only ask these questions on your deathbed, it may be too late to do anything to shape the answers. You can think about these things now if you recognize that part of your life is preparing for death. These estate planning meditations and preparations may be a minuscule part of who you are and what you do, but they deserve to be well considered even so.
Adopting this perspective also gives you a chance to ask "What's important to me?" with fresh eyes. Our lives-and even our estate plans-may not amount to much in the context of a constantly changing universe exponentially larger than anything we can imagine, or when weighed against the concept of eternity. The economy can completely collapse, the dollar rendered worthless beyond the fuel value of burning it, electricity absent. Social and economic upheaval can turn any plan into a cruel cosmic joke, but just because estate planning is absurd at some levels, don't despair. Though we don't know what tomorrow will bring, we live our lives and do what we can within our sphere of influence, hopefully leaving the world a better place due to our existence. Though estate planning may be absurd at some levels, we live our lives and do what we can within our sphere of influence, hopefully leaving the world a better place due to our existence.
"If you want to make God laugh, tell Him your plans". - Old Proverb
About Regrets: Some legacies are great, some are good, and some are downright horrible; still others are somewhere in between. Every person has done something that he/she is not proud of--enhance the positive, outweigh the negative. Estate planning can be a way to tip your karmic balance.
Thinking about your existing legacy and estate planning may lead you to imagine an ideal vision of the future. Will things turn out as you desire? Nobody knows what the future holds, but you can try to influence contingencies that arise when you no longer have a physical voice. You won't see the results of your plan yourself, but you can chart a course for those who continue in your wake and feel satisfied with your best effort.
Everyone has some special estate planning concerns: a project you'd like to see to fruition; a particularly difficult relative; a piece of jewelry that, continuing a maternal line, must end up with your eldest niece; a potential family conflict brewing on the horizon. Your planning hot buttons may not be particularly complex, but you probably have at least one shouting to be addressed. I urge you to make the effort to do it right.
You probably already know that you need to do some amount of estate planning. You procrastinate. On both counts, you're in good company. Every poll I've seen says that less than half of adult Americans have a valid will. Fewer still have done more complex or thoughtful planning. What's more, most existing estate plans need a serious update.
Given these facts, chances are that you belong to the overwhelming majority of people who have not yet moved estate planning to the top of your "to do" list. Don't let some existential crisis be the catalyst for you to do your estate plan. It may then be too late.
There is an attitudinal continuum when it comes to estate planning. You can plan as much as you care to, need to, or want to. You can make things easier for your loved ones, in ways both practical and less tangible. You can dream about the legacy your plan can perpetuate, and the good your estate plan can do. Examine your values and your life expansively while you contemplate how you can help the world, a little or a lot. By taking a fast-forwarding mental trip that bridges your perceived now to an unknowable future, you can best consider the ways to project your spirit and influence.
As an exercise, complete the following sentence: "I'm not doing estate planning for myself. I'm doing it for ______________________________________."
You may want to help just your own family. Or you may have friends and acquaintances whose lives you would like to improve by giving them an amount that is small to you but large to them.
In a 1975 interview, Neil Young told Cameron Crowe, "When I'm gone, there's just going to be those records. Let the lawyers fight about the business. The records matter." While those records make up a considerable legacy, it can be enhanced by specifying the manner in which they benefit his family, friends, and charitable causes. Mr. Young, who famously does not allow his music to be used for commercial advertising, would definitely want that specified in his estate plan, along with directions regarding whether other musicians can commercially release new versions of his songs. Since the future revenue of his estate likely exceeds that of more than a handful of countries, these are important considerations. I would guess that the Neil Young of 2008 does not think about his legacy the same way as the Neil Young of 1975. You aren't Neil Young (unless you are-hi, Mr. Young!), but is there any asset you own that you want to make sure gets into the right hands?
Originally a voodoo term, mojo became more generally associated with the magical charm that blues musicians sing about. In estate planning, it's using your heart, not just your head, to spread your own magic. It can't necessarily be quantified but its value is unmistakable.
Howard had very little money, but his will left his buddy Lou all of his fishing gear and a framed picture of their trip in 1996, when Howard landed "The Big One."
Compose a message to be read during your funeral service, when your friends are eulogizing your virtues to a captive audience. Make a list of psalms you want read or sung. Develop a music play list for your memorial that has your favorite classical or pop music. Think of your send-off as another opportunity to inspire. Sam was always telling jokes. In his will, he ended with a joke, to be read at his memorial, just so he could have the last laugh.
Even though you don't have the impact of Martin Luther King, Jr., Albert Einstein, or John Lennon, you still leave something behind. Use the finishing touches of estate planning to add to your legacy.
Why Is Estate Planning So Difficult to Get Around To?
Social taboos: Many people don't like delving too deeply into either death or finances. When the subjects are intertwined, things get even touchier. Some would say that discussing such matters is impolite or morbid - even in the context of drafting wills or establishing trusts. But what is morbid about preparing for the inevitable?
Psychological reasons: Few things are as difficult as facing your own death, yet by doing so you can live your life more fully. Combine this with an aversion to lawyers or complicated legal documents, and common sense flies out of the window. One great truth about death is that failing to acknowledge it inhibits your actions in life.
Complex or failed relationships: The peculiar dynamics of your own family may make it easier for you to ignore the difficult job of critically examining the results you want to achieve from an estate plan. It's always easier just to do nothing and be reactive. Taking charge of your estate planning is a prime opportunity to be proactive.
Frenetic lifestyles: The fast pace of your life, together with a short attention span, may leave little room for critical thinking about issues that don't seem overwhelmingly important at the moment. Estate planning requires a commitment that must be fit into our constantly moving lives.
Lack of awareness of all that estate planning can accomplish. I hope that I can provide some guidance.
"There is no tragedy in the death of an old man. Forgive him his shortcomings, and thank him for all his love and care." - Robert Altman's A Prairie Home Companion, 2006
God bless those who die heroically putting themselves in harms way for other citizens--police, fire, military and others!
A tragic death, to me, is one that occurs "out of order", a child or young parent. Otherwise, tragedy finds itself in the dying process or the brutal and sometimes comic way that people manage to die.
Once you accept that death can occur at any time, imagine what the future will look like without you - and how you would like it shape it. First though, continue to examine your life:
- What values define what you do and who you are?
- Who or what in this world is most important to you?
- What have you tried to do with your life?
- What do you still hope to accomplish?
Which goals do you want to achieve or strive for, whether during your life or after your death? Some of your goals are difficult to achieve, but by defining them in a scope that allows for their fulfillment even when you are gone, you can come closer to bringing them about. Estate planning can be both a trigger for and an important part of a cycle of self-analysis and strategizing.
If you approach estate planning with gusto, you may find solutions to problems that have paralyzed your planning thoughts, preventing you from taking steps necessary to make your final wishes a future reality. You may find that what seemed to be boulders in your path really turn out to be pebbles. We all have an imagined vision of the future shaped by our perceptions of current reality. Do what you can to help an idealized vision come to fruition. There may be no perfect solution to your own set of complex circumstances, but that's no different from many aspects of life. Search for partial solutions and plan to the best of your abilities. New opportunities often appear once you've addressed these anxiety-provoking issues. Imagine the relief!
What Kind of Estate Plan Do You Need?
Lots of people who do estate planning reflexively think that all they need is a simple will. If you take nothing else away from this, know that at the very least you also need powers of attorney over health and over finances. This is true no matter how broke you may be (still paying off student loans?).
Even without valuable assets, you have some thinking to do. Most people's lives contain some element that requires a departure from a ready-made estate planning template. Maybe you have a blended family or other non-linear relationships. Or a family business, valuable collection, horrendous in-law or some other situation that requires special attention. It could be that you have seen or heard about something terrible happening to the loved ones of a person who didn't plan and you want to ensure that you avoid that particular result. Estate planning offers a means to do some critical thinking about your past, present, and future. The more difficult the circumstances, the more essential it is to plan. The more complicated or crazy the situation, the more estate planning becomes a source of relief when you address that aspect of your life.
Beyond powers of attorney, and a "simple" will, what you will need is a matter of your particular goals, concerns, and complications. Estate planning includes document preparation and execution. It sometimes includes a restructuring of your assets (changing ownership and beneficiary designations).
While traveling this road, don't get too bogged down searching for perfection. It may not exist under your difficult circumstances. Just do the best you can to provide for expected and unexpected scenarios. Seriously explore your most important issues without getting hung up on minutiae. Figure out what your planning wishes are and keep them in perspective. I have met many people whose estate planning put to rest issues that they obsessed over for years prior.
In most cases an estate plan simplifies transitions for your family and serves as a tool to defuse foreseeable problems. Few things can tear families apart as easily as dividing an estate. Think carefully about your family and try to envisage things that could go disastrously wrong in your aftermath. Consider writing down your wishes, make note of a few bullet points, fill out a questionnaire Talk the issues out with a lawyer and if it helps, discuss these matters with those closest to you.
The core of most estate plans includes smoothing or avoiding death probate, minimizing taxes, distributing assets and establishing "control." Death probate is the link by which your material and financial possessions flow, from you to someone else--your beneficiaries. Legally, it is a court process to establish new ownership, involving the validation of a will, if one exists, and making the transfer according to your instructions.
Even the most basic estate plans include other issues. They provide answers to questions like:
- Is my life partner provided for?
- Who will my children live with?
- Who gets my cash, real estate, business, and insurance assets?
- Under what conditions will they receive the assets?
- Who gets my "stuff" and what is the fairest way to divide it or maximize its value?
- Who will care for my pets?
- What's left for charities, the "other"?
- Who makes medical and financial decisions for me if I can't communicate?
- What about organ donation?
- Cremation or burial?
What Happens Without a Plan? Have you ever seen:
- A brutal fight over personal property that concludes with some undeserving step-relation ending up with an item that should have gone to someone else?
- A nasty guardianship battle over an incapacitated parent, sibling, or minor child?
- A protracted probate battle with shifting alliances and lawyers all over the place?
- A hefty check written to the IRS, "Estate Tax" on the memo line?
- A loved one withering away in misery without being able to communicate her wishes?
- A grievous wrong caused by statutes at the hands of judges or even juries who must follow the letter of the law without regard to individual circumstances?
- People scrambling to accomplish estate planning when it was already too late to do it properly?
Situations like these can give you an idea of what an estate plan can help you avoid. It's the aftermath of YOUR life that you're planning for - your issues, your beneficiaries. Don't leave things to chance.
The law has a "spirit," but nearly every time it comes face to face with the letter of the law, the spirit loses.
You can't depend on the spirit of the law to do what is right. Instead, you need to plan your estate in accordance with legal requirements. Laws of succession are written for masses of people, so they don't always work fairly in particular cases. They can hurt your loved ones if you die without a proper plan. You need the proper legal documentation, based on statutes, to carry out your wishes.
If you die without a will - intestate, in legalese - your estate will be subject to your state's laws of intestacy. Your probate assets will be given to your relatives based upon prearranged formulas.
Probate Assets - These are assets owned by you when you die if:
- There is no surviving joint tenant.
- There is no effective beneficiary designation on file with your insurance company or other financial institution. Most bank, brokerage and mutual fund companies now allow for beneficiary designations that avoid probate, but such designations must be relatively simple. Without further documentation, you normally cannot avoid probate on real estate simply by designating a beneficiary unless a "trustee's deed" is built into the deed.
- The asset does not pass by trust or other contractual agreement.
Joint tenancy delays, but doesn't eliminate an asset from the probate category, because the surviving joint tenant will eventually die too.
If you have a valid will, then when you die, your probate assets will go to the people or charities you designate, after passing through probate court. Without a will, the court will look at your relatives and distributes your assets based upon your state's intestacy law without regard to your preferences. In most states, assets will be divided between your spouse and children, if you have them. The law makes no distinction among your children, so your devoted daughter and the son you haven't seen in 10 years will receive equal portions of your estate.
If you don't have a spouse or children, the law follows various formulas, and usually looks to a combination of parents, siblings, and children of deceased siblings. If none of those people exist, then assets will continue to follow the branches of your family tree to living descendants of your great grandparents-second cousins or other remote relatives that you may never have heard of.
"Godchildren" You may have special people in your life whom you want to include in your plan but who aren't blood relatives. Take godchildren, for example. The dictionary definition of a godchild is a person for whom one becomes sponsor at baptism. My broader estate planning definition of a godchild is someone who gets an extra share of a person's estate, especially when that person has no children. Is there a young person you want to help out? This is your chance.
If you have a small estate, you may be able to avoid probate. Go to the Small Estate Charts to see what is considered a "small estate" where you live.
The Estate Planning Continuum
With all of this in mind, consider your potential continuum of actions. On one end of the spectrum, you may say, "I'll be dead, so why should I care?" On the other end, you may undertake an introspective analysis of life and death that leads you back to the big questions: "What is my legacy? What can I do to improve it, intensify it, and allow it to continue for as long as possible?"
Estate planning does not necessarily equate to a good time, but it may lead to insights and turn out to be a highly positive experience. If lack of organization is preventing you from planning, you'll have to expend the necessary energy needed to overcome the problem. You may be waiting for the right excuse to get organized because you know how much better it will make you feel. If you aren't one of these people, and instead are overwhelmed by the prospect, you have options. Either muster the energy yourself or hire someone else to do it for you: a professional, a friend, a grandchild. It's worth the effort.
Now that you've gotten organized and finished your estate plan, don't you feel a load off your mind? Oh, wait, you haven't done it yet. It's not that easy, but trust me: planning for the here-in-after will make you feel more in control of the here-and-now.
Organizing your paperwork may be a daunting task,but the sense of relief and satisfaction can make it so worthwhile. If you need to, hire a professional, a friend, a grandchild.
Now this is YOUR plan I'm talking about, not the plan of the person who wrote the form book that lawyers rely upon. Let's say you have some money or other equity.
Ask yourself these questions:
- Did you work hard your whole life to get it with no outside help?
- Did you inherit what you have and find that it robbed you of the adversity that can be essential to developing character?
- Did you benefit from the generosity of someone who owed you nothing, but helped you get ahead, perhaps through a scholarship?
However you acquired your assets, do you want to pass them on to your family as efficiently as possible? No matter what your situation is and your motivations, you can use estate planning both to perpetuate your values and to right some wrongs.
After your bills have been paid, careful planning can ensure that what's left serves your particular ends. Here are some memorable ideas:
- Fund a party at your favorite tavern.
- Pay for a weekend spa retreat for your girlfriends.
- Fund a school lunch plan.
- Fund a renovation project at your house of worship.
- Help volunteering teens feed the hungry, build houses for the needy, or work on farms.
- Ensure that your children or grandchildren have money for their college education.
- Donate your collection of books or music to the library of your choice.
- Donate to your high school with the stipulation that the school put a stone bench out front that says "From the Class of 1995."
- Arrange for a museum to put an item from your collection of fine art on display so that the public can enjoy it as you have.
- Establish a family fund (a "party pushkie") that makes gifts to family members for birthdays, holidays, weddings, or achievements-or fund summer family reunions.
- Surprise a loyal employee with a windfall. ("Steve worked for me for 12 years. When he gets $10,000 from me, it will be a huge surprise-like money falling out of the sky.")
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