Death and Taxes

April 12, 2021

You know Mr. Franklin’s reflection that: “…in this world, nothing is certain but death and taxes.†Although we know we cannot live forever and we want to organize our affairs and take care of our loved ones, we have a strong tendency to choose to deal with our mortality tomorrow. Unfortunately, if we wait too long, we will move from “kicking the can down the road†to “kicking the bucket.â€

I get it, estate planning is complex, and all that death talk is just not fun. But, at its core, estate planning is about having a plan that formalizes our wishes and helps manage risk. We need a plan if we fall ill suddenly and are unable to manage our assets. We need a plan in the event of our untimely death. We need a plan to make sure our heirs can deal with what they are left. Most of all, we need a plan to make sure our wishes are reflected in the way that our property is passed on.

Okay, let’s do an exercise: say you knew, with certainty, that you would fall very sick in four years and die in five. What would you do?

You would probably:

• Identify that person that was to take care of your financial, legal, and/or medical decisions when you were too sick, and make sure that person knew what to do.
• Reread and update that old will, so it reflects your current wishes and considers all your loved ones.
• Evaluate whether you could, in good conscience, leave certain property outright to loved ones, or whether you needed someone to protect them from themselves or others.
• Check your retirement accounts and life insurance policies to make sure your beneficiaries are correctly stated.
• Seek help to make the transfer of your property tax efficient so that your heirs, your spouse, and your church or other charity received as much of your wealth as possible
• Consider:
  • Coming up with a plan to communicate your family values or set up an organization to facilitate your family’s philanthropic goals.
  • Hosting a family discussion.
  • Writing down your master plan, which identifies all your assets and where they were held; who the family should call if they needed help; and how to get access to cash to pay bills and funeral expenses.

Making a thoughtful estate plan is exactly like all the other things we are supposed to be doing that are good for us, like working out and eating our vegetables. The hardest part is getting started, but the right place to start is simple, just ask yourself what is it that I am worried may happen if I’m not around. Don’t wait for tomorrow to address this concern – start now because once the uncomfortable planning is done, you can start worrying less.

And, you don’t have to do any of this alone. You have a team of individuals here at your family office, all with different fields of expertise, from family mediation, to foundation management, tax mitigation strategies, and trustee or executorship support – just ask.

Whitney