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