This is not about you. You have left life on this planet. We are talking about the impact that a death may have on those remaining….and what they are experiencing with your passing. Maybe not the top of your reading list or things you want to think about. However, please read on.
Discussion of three different experiences.
In two of these experiences, you are the person remaining after a loved one has passed and the third is your passing.
Death is a sensitive topic for some people. It can also become very complicated. Complicated when it comes to ferreting out the distribution of assets and responsibilities to minors and special-needs persons. I am hoping to discuss the simplification of some of the complications.
You could be the “sandwich” generation.
If your children are still at home or are grown with families of their own and your parents are still living, you are the middle of the sandwich.
Your parents are getting along in years. One or both of them are still living in their home and seem to be faltering a bit. Memory issues; mail is piling up; more dings in the car; the refrigerator seems to have spoiled food. You begin to wonder: “Are they taking their meds correctly; are they missing doctor appointments; are the bills getting paid; do they have a will or trust; and how vulnerable are they to identity theft or credit card or internet fraud?” Have you considered how being a caregiver for your parents could impact your retirement?
How and when to intervene is awkward at best and impossible at worst. My suggestion is to be kind, compassionate and persistent. Let them know you want to help but not take over. Repeat over and over that it is their money and their decisions. Properly written estate planning documents can help facilitate transfer of financial responsibilities and assets.
Your children are adults with a family. Both spouses work to support their life today and the build for their future. What happens if tragedy strikes and one spouse dies? Can the survivor support themselves and the children on a single salary plus additional expenses like more childcare? What if both spouses die? Who will be responsible for raising their children both in terms of parenting and financing? Without a will or trust, the probate and family courts will make their decisions for your family. Have you considered the impact of helping to support your widowed child and grandchildren could have on your own retirement? Do your children have sufficient life insurance?
What about you? You have various investments, retirement accounts, a home, maybe other real estate investments, a business, or other assets. Have you decided who will manage your assets if you are either mentally or physically not able to communicate your wishes before your death? What is the process? If you have a revocable trust, you will have named a successor trustee that will manage the finances if you are alive or take care of distributing your assets upon your passing to the beneficiaries named in the trust.
If you have only a will or worse yet, no document and are still alive but incapacitated, your spouse or children may need to hire an attorney and petition the court to be named your conservator so they can pay your bills and handle financial matters. If you died with or without a will, the remaining family may likely need to hire another attorney and go back to probate court to settle your estate. In California, this probate process is usually about two years and could cost three percent of the value of your estate in court costs. Assets held by a trust and proceeds from retirement accounts, annuities and life insurance with named beneficiaries skip the probate process.
In addition to the revocable living trust (or will), you will probably want to have a health care power of attorney to name the person empowered to make medical decisions if you are unable as well as a financial power of attorney naming a person to act on your behalf regarding financial assets like retirement accounts.
You can do this the easy way or the hard way. Or put another way, investing some time, energy and thought will likely make these difficult and emotional situations go much smoother for your family and heirs. Frankly, procrastination and inactivity by you, could probably create additional expense, delay, frustration, and even family conflict.
Your decision. We are not attorneys or licensed to practice law. However, after forty plus years of partnering with families to arrange their investments and financial matters, we have had numerous experiences and situations that evolved very smoothly as well as witnessing a few train wrecks caused by poor or no planning. We can help you to understand some of the basics, but then you will need to seek out a qualified estate planning attorney to draft your documents and put into writing your wishes.
Wollman Wealth Designs, Inc is a financial planning and investment advisory firm in Escondido, CA partnering with families, friends and clients in San Diego County and around the country. Please visit our website, call the office or send us an email with your comments or questions.
Securities and advisory services are offered through Cetera Advisor Networks LLC (doing insurance business in CA as CFGAN Insurance Agency LLC), member FINRA/SIPC, a broker-dealer and registered investment adviser. Cetera is under separate ownership from any other name entity. CA Insurance License #0604093
The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. For a comprehensive review of your personal situation, always consult your legal advisor. , Neither Cetera Advisor Networks LLC, nor any of its representatives may give legal advice.