Estate Planning - What I Learned From My Grandfather After His Death

By David Wise

This year has undoubtedly been the toughest for my family, as we lost my grandfather (pictured left) in February.  He was by far one of the greatest men I’ve known. Even though losing him was difficult, it gave me a chance to gain some valuable lessons first-hand about the dos and don’ts of implementing an estate plan.

As a Marine, Grandpa was rooted in the Semper Fidelis way, always faithful, always loyal.  He applied these principles to his everyday life.  Loyal to family, friends and the Marine Corps. To my grandfather, your character & your word meant everything.  ­He paid off the loan for his first business – a gas station right outside the Pentagon - within one year to the day of receiving the loan. I hope to honor his legacy by demonstrating the same honesty and integrity in my own life.  With his passing this year, I had the opportunity to help my father settle his estate. 

Let me begin by saying it’s a larger task than you expect before you’ve gone through it yourself. As financial advisors, we always encourage our clients to complete their estate documents, but it wasn’t until this year that I experienced first-hand just how important it is to follow through after the legal documents are drafted.

Executing the documents is just the beginning.  Where most people fall short is the implementation, which can be easily overlooked. You see, my grandfather did a wonderful job completing his estate plan, retitling his accounts and changing his beneficiaries.  Without these changes, it would have been a mess.  Even still, we ran into one little hiccup, a tiny checking account – this one account seemed so insignificant, but closing it meant we had to jump through a lot of hoops. (More on this later.)

As we at Hilltop gear up for mid-year review meetings with our clients, we have estate planning top of mind. It is a great time to put together a list of helpful estate tips, including some of the things I faced this year with Grandpa’s estate:

  1. Meet with an estate attorney and draft your documents. Pretty self-evident, but this is the most important step.  Get those documents drafted & signed, including your final will, trust documents if necessary, your living will, healthcare and financial powers of attorney, and HIPAA release.
  2. Implement your estate plan. Too often we meet with clients who have spent money on an estate plan, but never actually took the time to implement it. Here are some common steps to take after signing the legal documents. Your attorney should provide you with an outline of specific action steps, but here are some common items:
    1. Retitling accounts – If your attorney has recommended a trust or other ownership type for your accounts, you’ll need to work directly with your financial institutions to change the ownership.
    2. Changing beneficiaries on retirement accounts and insurance policies as needed to coordinate with your will and/or trust.
    3. Adding Transfer on Death (TOD) or Payable on Death (POD) arrangements to your checking and savings accounts, to name beneficiaries for those funds. This allows these funds to avoid the sometimes lengthy and expensive probate process after death.
    4. Notify your key persons of their potential responsibilities – You’ll have chosen an executor of your will, as well as somebody to make health and financial decisions for you (via powers of attorney). These are big jobs, and you want to make sure these people are comfortable with their roles.
  3. Review and update your estate plan periodically (at least every few years) and as your situation changes. Over time, the law will change, and your situation will change.  Keep these life transitions in mind as mental triggers to take another look at your plan:
    1. Your children become adults (age 18 or 21).
    2. Your wealth increases – this tends to cause your estate to be more complex.
    3. You get married or divorced.
    4. You get remarried – blended families can make for a particularly complicated estate plan.
    5. Key persons change – for example, your executor dies or cannot fulfill the role you’ve chosen for him or her.

So, you might be asking what happened with my grandpa’s little checking account. Well, we had to pay $300, submit the appropriate documentation to the court for a judge to sign and wait a week to close the account. If this account had been designated as a TOD, my dad could have simply asked the bank for the money and closed the account on the spot.

Thank heaven my grandpa took the time to be thorough with the rest of his assets.  This was just one small account; I can’t imagine the headache involved in settling an entire estate without a will. So, as you look to complete your estate documents, remember: the follow-through is as important as your signature on the documents themselves. 

 

This material is provided as a courtesy and for educational purposes only.  Hilltop Wealth Advisors does not provide legal or tax advice.  Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.