Sushi Money

Do you ever wonder if at the end of your life, after the funeral, when the family and friends go home, and when people think about the person who you were, what they remember of you?  Do you care about a legacy?  Is it important that some sense of who you were is left behind or considered by others?  Does it matter to you at all?

Those are all questions that many of us consider from time to time, especially as we get older or go through a life changing experience.  If some of those questions strike a chord within, perhaps it’s because at some level we want our life to matter. 

What we do in life, and what we leave behind does matter to many, many people.  It matters so much that many of us do something to show that we care.  We work to help others in our community, or a charitable cause, in life or after.  We have life insurance, or make bequests from our will or estate.  Or we write a letter or note for loved ones to read after we’re gone.  Maybe we simply try to divide our belongings and estate among family in friends in a manner we think would help them.  

For many of us it’s hard to really understand how our actions may have helped others through life.  We wonder if our lives really made a difference and reach for some sense of how our life mattered.

Of course there are other people that do have some sense of the impact they have made, or that they will make, and some seek the opportunity to contribute, give back, or “make their mark” to such a degree that their lives have been a statement in and of themselves.  I think of Bill and Melinda Gates’ legacy with their charitable foundation, and I marvel at what they’ve achieved on behalf of others.

But some people live their lives to such a degree that they don’t care one bit about what other people think, in life or in death.  And that’s fine too, and it’s their choice.

Most of us do care however.  Yet realistically we will never know of our impact or how others wil view our life. And that’s just the way life is.  

Personally I can think of nothing worse than seeing the last statement of who I was as someone who abandoned any sense of humanity or care towards other people. 

Apparently Leona Helmsley did just that.  She died in 2007 with over $2 billion in liquid assets on hand, and left most all of it for the welfare of dogs.   That was certainly her choice and I don’t begrudge taking care of animals in any way.

But it was the singular focus on animals that, for me, made a statement of Leona Helmsley’s inhumanity towards other people. 

“The [New York] Times said Helmsley signed the mission statement in 2003 to establish two goals for the multibillion dollar trust that would dole out her assets following her death.”

“The first goal was to help poor people, the Times reported. The second goal was to provide for the care and welfare of dogs, the paper reported. In 2004, Helsmley, erased the first goal, the Times said.”

What wonderful goals she had on her personal mission statement. To help poor people, and to help dogs. And then to abandon people altogether? I think that’s very sad.

Most of us won’t ever be able to conceive of the differences we have made to the lives of others.  The little things we have said or done, or the people we’ve helped along the way.   Have you read the story of Eddie in The Five People You Meet in Heaven?  Watching the 2005 movie by the same name provokes some profound thoughts about the journey of our lives and the people we have touched.

The story of Eddie is about someone who doesn’t think his life really mattered.  On his 83rd birthday he dies in an accident trying to save a little girl.  And then he wakes up in heaven where five different people take him through the journey of his life, and show him how his life touched theirs, and that it did really matter.   The story shows how connected we are with each other, and that whether we realize it or not, our actions and kindnesses do matter.  Eddie discovers the meaning of his life and learns that what matters most is the love and kindness that we show to others. 

It’s a wonderful story that frames the small inconveniences and daily frustrations of our lives in such a way that we may let them go to understand the greater good.   And maybe take heart that our lives do matter, and will have mattered long after we are gone.   Who we are does matter, and we can make a difference.

Leona Helmsley’s estate legacy will certainly make a difference in the lives of dogs.  It’s a shame so many children and families living in poverty could not have received the same consideration.  Or a school, or a shelter, or a foundation… 

Even so, we won’t ever know of the lives she touched or those she may have helped during her life.  Maybe somehow her support for the welfare of animals will foster a greater awareness for animal welfare, and ultimately a greater good among people?   It’s possible.

I don’t know what the last statement of who I am as a person will be. I hope it’s something that involves helping other people, and whether remembered or not, that it’s something that makes a difference.

Maybe it’s a good time to look at the will.

    When was the last time you talked with family members about estate planning and arrangements after death?  It’s not an easy topic for most of us, and for some it’s a balancing act between both personal emotions and that of other family members.  Getting it right is something we all want, but so many questions remain unanswered.  In this short video the Wall Street Journal’s Jeff Opdyke talks with his grandmother about her estate planning wishes.  It’s an interesting look at family discourse, perhaps a little structured but honest and… well, just kind of nice.

I’ve had similar conversations with relatives and things are not quite that simple at times. Heck, I don’t even have my own estate planning issues solved either.  But it’s so important to consider end-of-life issues.  Especially regarding paperwork and record keeping.  Between the many different banking and other accounts, it can be quite challenging to manage for everyone.  But getting everything in order is very important, and having a will is the first of many steps to think about. 

     I recently ran into a situation where someone has a trust, with  most of their property in it. But they don’t have a will!  They’ve had a living trust for over 20 years, without a will to go with it.   Is that a problem?  Absolutely.  In this case, the individual had several accounts and other property that were not placed into the living trust.  What happens after death?  The estate of that individual may be partially intestate and the courts would have to decide what to do with the property that was not placed into the living trust.  Having a will is essential, and with a trust a “pour-over will” serves as a safety net.  The “pour-over will” functions to “catch” anything that was either intentionally or inadvertently left out of the trust, in most cases directing the distribution of assets to the trust itself.  There’s lots of information out there, and it’s always good to look at your personal situation and see where you stand.  If in doubt, talk with an attorney or estate planning specialist.

“How I Made My Fortune? It was really quite simple. I bought an apple for 5 cents, spent the evening polishing it, and sold it the next day for 10 cents. With this I bought two apples, spent the evening polishing them, and sold them for 20 cents. And so it went until I had amassed a dollar and sixty cents. It was then that my wifes father died and left us a million dollars.”

Author Unknown

Now wouldn’t that be nice!  An inheritance is certainly a gift, yet more frequently I am reading that many people are counting on an inheritance to support them in their later years.  While talking with an elderly person recently I thought it interesting that as much as we plan for our future, and attempt to secure our financial lives through estate planning, etc,  we really don’t know how much of our savings we may need during our last years.  Unless someone is extremely wealthy, the money set aside in savings and retirement accounts may be needed for assisted living, nursing care, medical costs…on and on until?  Maybe until it’s gone.  There are many people using various strategies to shed income and move assets in order to qualify for Medicaid.  But realistically, Medicaid is a program for the poor… and those who need it most.  Ethically there is a great debate about how individuals may shift money around to qualify in later years.  Suffice it to say, if we want to have a choice of the type and location of care during our “nursing home years” we may just need to ensure we can pay for it.  If a relative is counting on some type of inheritance, they may be surprised when ‘ole mom, dad or grandma lives another 20 years!  And you never really know what someone may decide to do with their money… it is, after all, theirs.  As for me, I don’t believe in counting on an inheritance, and if it ever did happen- I would consider it as many do… a loving gift from one who has moved on.   I think I’ll go polish another apple…

When we hear the phrase “Estate Planning” we often think it’s more of a concern for the wealthy… or something we don’t have to worry about for many years.  But realistically, estate planning is a collective function that we should consider throughout our lives.  After all, we don’t know “when” our number is up…    I’ve heard stories of individuals taking out insurance policies, and within days of the policy being active, or just after it has become active, they die in a car accident or meet a similar fate.  In either case, estate planning takes on new relevance for the families and survivors.  So does the need for insurance!

What concerns are paramount for estate planning?  For most of us, a Will is the primary requirement.  The will should be pertinent to where you live, i.e. your domicile or State of permanent residence.  This is usually where you have your driver’s license, vote, pay taxes, etc.  If one dies without a will, then the state considers them to be “intestate” or “dying without a will or testament.”  What does that do?  I means the State will administer probate without regard to your final wishes, and distribute your estate according to State law, which means family or relatives will receive whatever the State’s laws say they should receive.  What if you have no living relatives?  Then you may have given the State everything you have by default.  A will is important… it helps decide “who gets what” and how things should be distributed.  Along with a will, could be a Letter of Final Instruction where you may make “bequests” of money or property, state your burial wishes and say anything else you think appropriate at that time to friends and relatives.  Not a bad idea.

What about Probate?  Well Probate is the legal administrative function of the courts in a given State to certify a Will and distribute assets.  Sometimes this can be a lengthy process, and expensive.  Many people go to great lengths to avoid probate because they want their estate to be settled quickly and with the least hassle.  A Living Trust can be used avoid probate by transferring assets into the trust. 

How else can we structure our accounts and property in a simple manner?  Lots of folks like to use “Pay on Death” or “POD” for bank accounts, and “Transfer on Death” or “TOD” for other accounts like brokerage or mutual fund accounts.  This enables the account to transfer immediately to the named individual(s) that are cited.  Insurance is not a problem, and avoids probate because it has a beneficiary designation.  IRA’s can also have a beneficiary designation, which is an excellent idea.  When was the last time you updated your beneficiary designations on your IRA or insurance policies?   In some states you can even avoid probate through the use of ”Transfer on Death” for automobiles and “Beneficiary Deeds” for real estate.

Sometimes people decide just to put a relative or friend as “Joint” on their account so they don’t have to worry about it… if they die, the account is already in the other person’s name and “Joint with Survivorship” applies, meaning the survivor is the full owner of the account.  That can be problematic though, especially for larger values of money or property.  If you make someone, outside of marriage, a Joint account holder, you may be making a taxable gift to them.  Also, once someone becomes a Joint account holder or owner, that account or property can be subject to the reach of their creditors.  Choose carefully if you are doing this.   Problems can be far reaching… consider the married couple with children.  If they accumulate substantial assets during marriage and one spouse dies, let’s say the other spouse inherits and receives all the assets from the marriage.  Naturally this couple wanted to provide for their children one day, and worked hard to get there.  Now lets say the surviving spouse re-marries, and re-titles everything as “Joint” with the new spouse.  Okay… that’s not abnormal.  They have children as well, but one day the original surviving spouse passes away, leaving everything to the spouse from the second marriage.  That may be fine, or it may not…  what if that spouse decides not to provide for or give anything to the original children, especially when they are older?  In some cases, original family members may be left out of any possible inheritance or assistance from enormous assets that originally came from their parents!  That’s one example of why estate planning is important, especially as we accrue assets and property throughout our lives.  There are many other issues such as divorce and taxation that are important to consider.

More formally, estate planning may involve the Financial Planner, Estate Planning Attorney, CPA and Trust Officer if there is one.  The client is kind of like the Director, and the professionals fulfill the direction of the client.  Often, the Financial Planner is the person the client is seeing for guidance, and will refer the client to other professionals as required.  A good Financial Planner can help look at the whole picture of your estate and financial matters, providing a holistic plan that meets both your financial goals during life and in retirement, as well as assisting with planning for after your death.

Some of the critical functions of estate planning involve tax considerations, trust integration, beneficiary structure and how insurance can be used to help survivors, as well as offset estate taxation upon your death.    For 2007 the Unified Credit for estate and gift taxation provides a $2,000,000 exemption.  That means most of us do not have to worry about estate taxes.  But often we are surprised at how things add up.  When you consider your home and personal property, insurance proceeds, investment real estate, stocks, bonds, etc. it can add up quickly pushing your Gross Estate pretty high.   If you are anywhere close to this number, it may be time to see your Financial Planner.  Of course seeing a Financial Planner is a pretty good idea anyway. It’s never too late to start!