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Grave Robbers

Estate Planning Tips


As another made up holiday approaches, courtesy of Hallmark and American Greetings, Michelle has been romantically dropping hints I should draw up a Will.  I know, I know: the cobbler has no shoes or something to that effect.  Sleeping with one eye open, she got me thinking this was an adult financial task.  Even though our situation is pretty simple, a properly drafted will can alleviate confusion, delays and expenses.  Most importantly, creating a Will or Living Trust can make a difficult life event just a little easier for your beneficiaries.


Unfortunately, we’ve experienced many family, friends and client deaths the past few years.  The double whammy hits when the estate is settled.   Problems we observe are poor beneficiary titling, Will not updated, or no Will at all. Hey, I get it: we may worry more about maximizing our assets than the passing of them.  While knowing just enough to be dangerous, I’ll share a few basic remedies.


What exactly is a Will?  It’s a legal document that states your intentions to coordinate the distribution of your assets after death & appoints guardians to any minor children.  (Also called Last Will and Testament.)  Simple enough, but confusion sets in when the term Probate is thrown around.  Probate is merely the legal procedure of distributing your estate assets to the proper heirs – proofing the Will so to speak.   Naming an Executor to oversee your final wishes also helps expedite the Probate process.  Hint: name an executor who pays their taxes & doesn’t use aliases.


Step One: get out a scratch pad and list all your assets worth bequeathing. Take inventory of your financial accounts & account numbers.  Then pour a double and decide who gets what.  This is a great time to air any grievances.


Next: drawing up the Will.  I guess you can take the cheaper short cut and draft one on-line.  I wouldn’t advocate it:  find a reputable estate attorney and pay a little more.  Their expertise will help drill down to matters you likely have overlooked and you’ll get a side order of free education.  If you already have a Will, check the last time it was updated.  Have any major life/financial events happened?  Probably a good practice to update every 5-10 years.   Thankfully, still being in the age 35-54 demographic, I have plenty of slacker company as just 27% have a Will.  Shockingly, the over 55 crowd is at just 45%.

This is also where you can designate the Power of Attorney (POA) & Healthcare Power of Attorney (HCPA).  If the person in question is a veteran, the Veteran Affairs (800 827-1000) may provide special burial services.


Finally - properly title your assets. Review this before meeting with said attorney.  IRA’s mandate you name primary and even contingent beneficiaries.  This expedites the assets passing to beneficiaries.  {Pro Tip: non-spouse beneficiaries have to open a special Inherited IRA account to avoid running afoul with the IRS.}  As for non-retirement accounts: I advocate Joint Tenant (JT) or Transfer on Death (TOD) titling.  Not required to be a spouse but again helps with the speedy distribution of assets.  Real Estate is trickier – especially if high value.  If no heirs or executor are named, the state may step in and assume the selling responsibility.


What about Trusts? At the risk of getting a ruler over the knuckles from my attorney friends, I’ll tread lightly & give them a promotional plug.  A Trust is just a fiduciary arrangement where you (Grantor) allow a third party (Trustee) to hold assets on behalf of your designated beneficiaries.   There are all types and can get quite complicated - GRITS, GRATS, CRUTS or an ABC Trust – there’s an alphabet soup of options.  They can also be expensive, puzzling and sometimes unnecessary.   So, who really needs one?


For starters: do you have enough assets for consideration – I’ve seen trusts with $500 in them – what’s the point? Tax efficiency is always a consideration.  Divorces and blended families may warrant attention – as would those with special needs children.  Perhaps you want to shield assets from financial liability?  Parents may also be leery of their 36-year-old, ne’er-do-well, inheriting large sums of money – trusts can have tight distribution parameters.  Or you may be charitably inclined - aforementioned deadbeat may choose to blow it all on a 6-team parlay instead of gifting to Queen of Angels.     


Tidying up your final affairs will garner a hearty toast at your Wake.  It will ease the mind of your loved ones.  Also helps clarify your intentions and & minimize family quibbles. But let’s face it: when it comes to money and family there will always be one or two that are complete thorns.  Inevitable perhaps, but having a validated legal document can help squash the infighting.    


A final tidbit on Saint Valentine: he was actually a Roman priest.  The details of his death were conflicting as there was supposedly more than one St. Valentine (Valentini)[i].  As for the romantic connection, he defied the Roman Emperor Gothicus orders prohibiting Christian marriage rituals.  For this rebellion he was beaten to death & beheaded circa February 14, 270.  The lengths men will go in the name of love.


Fiscal Fitness is a publication of Houlihan Asset Management, LLC for the benefit of its clients and friends.     Houlihan Asset Management.  Wealth Counseling/Asset Management. Copyright 2024


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