Memorial Day Estate Planning Thoughts

Hard to believe it’s almost Memorial Day weekend. But it is. For the first time in over a year, extended families may finally get together (in person) to kick off the official start of summer. Whether masked or unmasked, the focus will be on grilling, boating, beaching, golfing and maybe a parade. But the term “Memorial” will be especially poignant this year. Traditionally, this is the weekend we honor all U.S. veterans who have sacrificed their lives for our country. But we’ll also be remembering the half million Americans who lost their lives during the pandemic.

As COVID forced us to contemplate our own demise like never before, estate planners have been exceptionally busy. Three of our clients have been interviewed in the national media recently about trends they’re seeing in estate planning, planned giving and legacy planning. Here are some highlights about what they shared:

What are the most common mistakes people make when it comes to estate planning? 

Randy Fox, CFP®, AEP (Two Hawks Consulting, Skokie, IL) points to five common errors he sees in his practice:

1.      Not getting it all done.

2.      Not reviewing it regularly for life changes.

3.      Not funding trusts and not changing owners/beneficiaries properly.

4.      Not telling anyone where their documents are.

5.      Not thinking through who should be executors, trustees, or attorneys in fact for Powers of Attorney (POA)s.

Mark Rioboli, CFP®, PFS, Principal and Wealth Manager, Modera Wealth (Wayne, PA) agreed with Fox that way too many successful people do not have current wills, powers of attorney, or healthcare powers of attorney. “I recommend that anyone 18 or older gets these documents prepared.” Rioboli also said since estate laws have changed significantly over the years, documents need to be updated “especially if you've changed state residency.”

Dr. Guy Baker, CFP, Ph.D founder of Wealth Teams Alliance (Irvine, CA) agreed that many otherwise financially literate people fail to keep their estate plans updated and forget to designate proper beneficiaries for their IRAs or life insurance. Baker also observed that many affluent people do not have updated wills and/or trusts “that accurately disposes of their assets in the way they would like to benefit their heirs.” He also said they may have set up a living trust but have not funded it properly. As a result, “they leave out important assets which now have to go through probate.”

Rioboli pointed out two other common estate planning errors:

1. Assuming your will controls all of your assets. “Assets can transfer by title or beneficiary designation independent of your will. You may gift assets in your will that your will doesn't control.”

2. Not following through. Rioboli said you can hire a top estate attorney to draft the best will that money can buy, but “it's up to you to re-title your assets, transfer them to a trust and follow whatever the attorney recommends.” Without the proper follow through, the will can be useless,” Rioboli added.

Why is it more complicated to get your affairs in order in the Internet age? 

Fox said since we all have a "digital presence” today, all of those categories need attention just like other assets and accounts do. According to Rioboli, password management is a challenge for most of us, and he highly recommends using a password manager. “I've used a password manager for many years, and I have over 450 passwords securely saved in it,” observed Rioboli. “I recommend using a password manager that allows you to designate an emergency contact who can access all of your passwords and notes after a period of inactivity that you specify.”

What wisdom can you share about one of the problems organizing your passwords?

Dr. Baker recommends creating a list of algorithms that can be readily found in your phone. “Make them complex --numbers, letters and symbols. Keep your public emails similar because no one is going to try and hack those.” For your financial and personal passwords, Baker said be sure they are complicated and hard to discern from information that people can find out about you. For instance, he said your street address without letters and symbols would be easy to spot.

Bottom line: Fox said don’t be cheap about your estate planning or related personal security. “Pay for and use a good password manager-account i.e., LastPass.”

What’s your take? I’d like to hear from you.

Conclusion

Look how far we’ve come since Memorial Day 2020? As with social distancing and getting vaccinated, now is not the time to let your guard down when it comes to updating your estate plan and maintaining personal security.

Enjoy the weekend. Celebrate our progress. Let’s remember those who fought so hard for our country or against the ravages of the pandemic. Get some R&R and hit it hard on June 1!

#estateplanning, #powersofattorney, #POA, #LassPass. #MemorialDay

John Legend: Winning Doesn’t Have to Be a Zero-Sum Game

Grammy Award-winning singer-songwriter, John Legend, delivered a stirring commencement address at my son’s college graduation last weekend. With his signature tenor-baritone voice wafting over Wallace-Wade stadium, he shook the sleepy students out of their slumber with expletive-filled acronyms DDMF and GTHC familiar to anyone who’s watched a Duke-Carolina basketball game. Clearly, it wasn’t going to be another “life lessons” speech from a famous rich guy struggling to connect with restless undergrads waiting to collect their diplomas.

Legend knows how to read the room.

“The fact that you’re here today, graduates of one of the world’s greatest universities means that you’ve had to approach life with a certain competitiveness,” explained Legend, who related his own experience academically competing to graduate second in his high school class, attending the University of Pennsylvania and securing a job in management consulting (Boston Consulting Group).

“That path required this constant drive to push harder, reach higher, do better —to be perfect, or close to it. I’m sure it sounds familiar,” added Legend, who regrets he was “too cool to care” during his own college graduation ceremony.

Competition post-COVID

Legend reminded the students that over the past year, they were forced to pause and suddenly see themselves, not in competition with one another, but in community with each other. Imagine that.

“We all had to slow down. Social distance. Cover our faces. Stop filling our days with maximum productivity, and simply keep each other safe. Keep each other alive. Care for one another,” related Legend.

While the competitive drive that gets students into (and through) highly selective universities can get in the way, added Legend, a multi-talented EGOT winner (Emmy, Grammy, Oscar, Tony) and philanthropist.

“If you let that competitiveness take over your thinking, you start seeing life as a zero-sum game—i.e. for me to win, someone else has to lose.”

Legend reminded us that America’s history has long been marred by dangerous zero-sum thinking: Those in power suppressing people with no voice, no power, and no opportunity including workers, women, indigenous people, black people, immigrants, the LGBTQ community. But in reality, Legend argued that when more people made more money, rich business owners didn’t suffer. They got more customers! Prosperity increased for everyone. 

Karen J. Koch, CPA, MT, (Bedford Cost Segregation) told me she agreed with Legend’s view on zero-sum thinking: “In the world of business and entrepreneurship, it is about encircling ourselves with a team of not only bright people, but people who have a heart and passion for the success of others. Creating an environment where we all win, is when we can live in a world without fear, a community with justice for all.”

Unfortunately, many professions pressure young workers into thinking the only way to get ahead is to outwork their peers, out-network them and bill more hours. But if this last year of remote work has taught us anything, it’s that “work life and home life can be successfully intertwined,” observed Randy Crabtree, CPA, (TriMerit Specialty Tax Professionals). “By getting a glimpse into our co-workers’ family lives, we have gotten to know them in a way that we couldn't previously,” Crabtree told me the other day. “The more we get to know about the lives and passions of the people we work with, the more motivated and productive we all become."

Valentino Sabuco, Executive Director (The Financial Awareness Foundation) told me we have been “mis-led and mis-educated” all these years that it must be a win–lose world. “I win you lose or I don’t succeed. It really doesn’t have to be that way. Wouldn’t it be great if CEO’s and ‘C’ class executives would communicate this message to their employees?” asked Sabuco, whose organization has championed financial awareness and financial literacy for all for over 40 years.

According to Sabuco, the 26 wealthiest people on the planet own as much as the 3.5 billion poorest! And powerful people are spending a lot to keep it that way. “Think what this might look like if we can help the nearly billions of people around the world living on less than $10 per day to reach even lower middle-class status. “If we could double the buying power of the middle class, global equity markets would skyrocket,” predicted Sabuco. “Everyone would win big, including the ultra-wealthy. The people win by improving lifestyle and quality of life, business people win by making more money equitably, and the world can win by having a safer cleaner planet!”

Conclusion

Sixty years ago, John F. Kennedy said: “A rising tide lifts all boats.” Or as Legend observed, “We all do better when we all do better.” As Legend reminded the new graduates, a commencement marks the beginning, not the end, of your next phase in life. You can’t do any better than that.

#JohnLegend, #DukeCommencement, #equality, #ZeroSum