“Avoidance is the best short-term strategy to escape conflict, and the best long-term strategy to ensure suffering.” -Brendon Burchard
According to a 2017 survey from Caring.com, 60% of Americans do not have a will or living trust. There are many reasons why people avoid estate planning. We tend to avoid things that make us uncomfortable. Talking about finances and death with our loved ones is not the most exciting conversation to bring up at Thanksgiving dinner. Discussing complex financial matters can be complicated and require the help of an expert. We find it easier to procrastinate than to find the time to sit down with an expert amidst the daily grind. Complicated family dynamics can also make these conversations difficult. However, these exact things that make us avoid the difficult conversations are the same exact reasons why we should be having them.
John is married to his second wife, Jane. John has a son from his first marriage. With no estate plan, John’s assets would go directly to Jane at his death. However, John would like to leave a portion of his estate to his son and grandchildren. Funding a revocable trust during his life to instruct how the funds will be distributed at this death would ensure both his wife, child, and grandchildren are taken care of financially.
Bob and Sally have an adult daughter, Sara, who is incapacitated. Bob and Sally have provided Sara’s care throughout her life. They are concerned about what will happen to her care once they are gone. Establishing a Special Needs Trust will help ensure funds are available for Sara’s care while not interfering with any governmental assistance that may be available to her.
Mary has five grandchildren and would like to provide for their college education. With appropriate planning, Mary could set up an educational trust utilizing her Generation Skipping Tax Exemption. The funds would pass tax-free to her grandchildren and they could utilize the trust for tuition, books, housing, or even provide for a small stipend while they complete an unpaid internship.
Alma, a cardiologist, is concerned about frivolous malpractice suits that some of her colleagues have endured. In order to protect her personal assets from any malpractice claims that may go beyond what insurance would cover, she could establish an Asset Protection Trust to shield her personal assets from potential lawsuits and creditors.
Life is unpredictable and navigating the estate planning process can be overwhelming. Having peace of mind is worth navigating the unknown and uncomfortable. As fiduciary experts, we have the ability to help our clients navigate these uncomfortable conversations to help safeguard their financial futures and help ensure their families are taken care of. I have been fortunate enough to work with many clients over the years when they are faced with some of these uncomfortable dilemmas. Being a trusted partner, experienced resource, and compassionate sounding board has been both beneficial for the clients and rewarding as a fiduciary professional.
For more information, please contact:
Wendy M. Swift, CTFA
Vice President and Trust Officer
The posts expressed are views of FSTC and are not intended as advice or recommendations. For informational purposes only. FSTC does not offer tax or legal advice, professional counsel should be sought for tax or legal advice.