(First published in The Greenwich Sentinel on March 27, 2020)
Ben Franklin famously said, “in this world nothing can be said to be certain, except death and taxes.” April 15 is right around the corner, but due to the coronavirus, “Tax Day” has been pushed back to Wednesday, July 15, to the great relief of accountants and procrastinators everywhere.
We are now a week or two into The Great Staycation of 2020, in which most of us are holed up at home quickly running out of Netflix binge-watching options and trying to keep our sanity and save our family relationships from a bit too much time together. The only ones that appear to be enjoying the situation are our pets, who are just eating up the increased attention they are getting.
Probably for the first time since we were kids or college students, we have more time on our hands then we know what to do with. That actually presents an element of stress in our lives, and the last thing we need right now are additional stressors. So, what to do?
I am no psychologist, but I do know that engaging in productive work can help relieve stress. Productive work is anything that accomplishes or makes progress towards a worthwhile goal. Cleaning out a closet or organizing the garage can be amazingly therapeutic. So can organizing one’s taxes, though as a committed procrastinator I will undoubtedly wait on that for a while. Which leads me to That Other Inevitability.
Despite being a fact of life, death is a very uncomfortable topic in our society. We will all die sometime, though most likely not of the coronavirus. I’ve spent most of my professional career advising and assisting individuals planning and administering their estates. No one has ever really wanted to do it, and some who fancied themselves immortal somehow even felt it unnecessary. But over the years I have become more convinced than ever that planning and communicating a vision for what you’d like life to be like after your own can be one of the greatest gifts you can leave to your loved ones.
So, for those who might be inclined to use their current free time to make progress towards that goal, here are a few (nonexhaustive) practical suggestions:
Review your Will and estate plan. Does it reflect your current wishes? Have there been changes in your family situation (e.g., children, grandchildren, charitable intentions) or assets not presently captured? A good rule of thumb is to review your estate plan every three to five years and on certain milestones. Tax law changes can also impact your planning. For example, some older Will provisions may have unintended consequences in light of recent changes to federal and state estate tax policies which have made many more estates tax free.
If you don’t have a Will or an estate plan, get one. This can be especially important for individuals with children. If you die without a Will (i.e., “intestate”), the government and courts will decide what happens to your wealth and who will be the guardian for your minor children. Given the current reputations of both, it is hard to have confidence that they will make the same decisions you would.
Review your choice of executor(s) and trustee(s). Are they still available and willing to play that role? Will they have the time to dedicate and the skills (or the ability to engage others with the skills) necessary to do the job appropriately? Are you expecting them to serve for free or have you made provisions for them to take a fee for their service? If you have chosen a family member, could that choice put them in a position of potential conflict with other family members? Your attorney or financial advisor can often be of help in this review.
If you would like certain people to inherit particular items, spell that out in a list or letter of wishes addressed to your executor(s). This is probably one of the most helpful things you could do. In my experience, families fight over personal items far more than money or other property. Personal effects often have emotional value far greater than monetary value, and I have seen (sadly) families torn apart over items that an outsider would consider disposable. It is far better for the executor to be in a position to say, “Your mother (or father, or grandparent) wanted you to have this.”
Don’t forget to review, and update if necessary, your beneficiary designations on insurance policies, employment benefits, 401(k)s, etc. Note that those assets pass directly to those beneficiaries on your death and not pursuant to your Will, so it is highly advisable that you consider those designations in the context of your overall estate plan.
Consider executing a Durable Power of Attorney which will give someone you designate the ability to take action on your behalf if you are temporarily or permanently incapacitated. It also is a good idea to consider executing an Advance Medical Directive (a/k/a “Living Will”) outlining your wishes with respect to medical treatment in extraordinary circumstances and designating an individual as your Health Care Proxy to make treatment decisions if you are unable to do so.
Review the title ownership of your assets, particularly financial accounts. In the event of death or disability, bank and investment accounts held in joint name (e.g., husband and wife) can continue to be accessed by the survivor/nondisabled owner without interruption or delay. However, accounts in sole name are frozen upon death and inaccessible during probate of the Will until an executor is qualified and appointed by the court. This can take some time and pose potential hardship on the family.
Many modern estate plans involve both a Will and a Revocable Trust (a/k/a “Living Trust”). This structure provides a number of benefits, including privacy and greater flexibility during the probate process. If your plan is structured this way, it is advisable to review whether you have effectively transferred title to relevant assets (particularly investment accounts) to the Living Trust. Doing so allows the trustee of the Living Trust to deal with trust assets immediately upon your death or disability, without the restrictions and delays involved in probate. I am currently advising an estate in which this was not done; the executors are now waiting quite uncomfortably to be appointed as the estate investment account remains frozen during this period of unprecedented market volatility.
Finally, many people have begun documenting their funeral wishes. This might seem macabre to some, but again can be a wonderful gift and help to the family at a time of emotional distress. I can testify to this from personal experience, as my father-in-law left a very detailed note of his wishes, even with respect to the choice of music. This was of immense help in organizing the practical aspects of his funeral, and quite comforting in terms of knowing that he would have been pleased with the result, especially (as a Navy man) with the singing at the recessional of the Navy Hymn!
Now for the elephant in the room (no, I am not making a political reference): how exactly to tell anyone that you are undertaking this review? Family and friends are likely to be alarmed and assume all sorts of dreadful reasons for the decision. I have a suggestion: show them a copy of this article. Blame it on me. Tell them that it is a much better use of your time and energy than re-watching episodes of “Orange is the New Black.” And tell them that they will thank you for it.
They will. Eventually.