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Estate Planning: The Most Important “What If”

Financial PlanningLittle known fact about me: I love “if you” and “what if” conversations, or anything similar. If you are not familiar, the questions in that type of conversation might be “If you only had 24 hours to live, what would you do?” or “If you could only pick 3 stores to shop at for the rest of your life, which ones would they be?” The latter question came up a few years ago in a conversation with a friend; one of his picks was Amazon. (Please know — in the spirit of the game — I didn’t count that response. That’s the equivalent to picking the entire Internet as one of your “stores.” Specifics are key in this game.) In any case, these conversations are a great way to see how people prioritize, rationalize, and reason differently from each other. People also tend to highlight different areas — and in turn — completely disregard others. In a very similar way, you can apply this concept to estate planning: it’s like a very important “what if” scenario.  The problem is that it’s not always “what if”; it’s more often “when.”

Estate planning is crucially important, yet often overlooked.

As we mentioned, when entertaining these scenarios, people often skip areas of concern completely and decide to focus on something else. In similar ways, proper estate planning is a key area of financial planning that is too often missed. There’s a tendency to experience inertia and overthinking; so many fear the planning process itself, and for understandable reasons. I remember my own estate planning, in fact. There were many deep discussions (and some tears) about who would take our kids, make medical decisions for us, and who would be the trustee of the assets in our absence. These are serious questions that require our attention, and are not easy or fun conversations to have. What if I cannot make medical or financial decisions for myself? Who will be the trustee of my assets for the benefit of my young and dependent children? Who will be my guardian should I need one appointed?

TogethernessHow your assets are handled may not be the most important factor.

People have a strong focus on “who gets our stuff” as the primary question when it comes to estate planning.  But the reality is that — while important — determining who inherits the home or the car may not be the most important factor. In fact, the most important things to look after are yourself (in a dependent state) and those that depend on you (like small children or those with special needs.) It’s crucial to remember that this is not just an issue for young parents or the elderly; it also affects college students over 18 who may no longer live at home. If a medical emergency happens, who can acquire information and make important decisions? Consider also: parents who have children with a history of addictive behavior, who have the potential to inherit a large sum of money. How do they protect the lives of their children — who may struggle with addiction — without their presence?

Client MeetingStart your estate planning now

These “what ifs” take many forms when overlaid to the unique lives and situations of individuals and families. Yes, estate planning is complicated and can be overwhelming, especially if it’s the first time. However — if you have yet to create an estate plan — the New Year is a great time to start. If you do have one in place, I urge you to have your estate plan reviewed and updated by tax and legal professionals in tandem with your financial advisor, who can help you along the way. Please contact me at any time if you need advice!

December 2019