One of the more egregious stats I have come to learn was the opening paragraph of a recent USA Today article How asset titles and beneficiaries save your heirs from costly probate: “Fewer than half of Americans have any estate planning documents and of those who do have a will or trust, 14% have never updated it and an additional 13% update only every 10 or more years, according to Trust & Will.”
Less. Than. Half.
Let that sink in. Do you know what happens when Mom and Dad die without a will? The family home goes to probate so that the Next Generation has to fight with the state for years to prove that it is their property.
I met with an RIA this week who shared with me that he and his siblings have spent the last 2.5+ years arguing with the state of Massachusetts about the family home. Dad passed 30 years ago with a will from a now defunct law firm drafted in 1984. Mom did not touch the estate paperwork.
The result? Paperwork crises amongst the estate chaos, a process full of curbs, cul de sacs, and sharp corners. Time and energy focused on admin tasks and arguments rather than grieving and honoring our ancestors. A falling apart rather than a coming together.
Two key things to do per the article:
- Beneficiary Naming - Being clear who is to inherit the estate assets (think an ex-spouse, minors, or joint tenants in common as being something to address)
- Titling - Explicitly maps who will control or receive the asset upon estate settlement
And the concluding advice: "Look at the difference of ownership and map out your situation," Stevens (note: managing director of Hightower Signature Wealth) said. "Do you like the outcome or not? If not, change it." Once that's done and there's a baseline, she recommends revisiting and updating after a life event, like divorce or marriage, or every year or two, even if there isn't a major life event.”
The business of the family should be treated as such. Well organized, well documented, well tended to, and well understood. This ensures that Mom and Dad’s wishes are honored while the Next Generation has a stable foundation upon which to give their family a better life than was given to them. It takes a little work, but we can help each other and our families move forward…