Mañana Mentality
Given the choice  between
making estate plans in anticipation of one's own morbidity and mortality, or doing anything
else, most adult Americans would choose to do anything else. Not
surprisingly, only about three out of every ten adult Americans have
prepared their estate plans. What about the other seven adult Americans
who have not made plans, are they irresponsible by nature? No, in fact,
many are very responsible and caring people. But while many of these
Americans fully intend to make proper estate plans, they adopt a mañana mentality (i.e. they procrastinate). Unfortunately, tomorrow never comes for too
many Americans with this mañana
mentality when it comes to their estate planning.
Root
Causes
Why do people procrastinate, especially
regarding something as fundamental as their estate planning? Because it
is human nature to avoid unpleasant experiences and people. Period.
As noted earlier, when it comes to life
experiences, disability and death are certainly not at the top of
anyone's must do list. Even though every man, woman and child alive
today will eventually experience death (according to the actuarial
tables of every life insurance company and a long history of anecdotal
evidence to support them), American life expectancies are increasing
with every medical miracle. That is good news. Now, for some bad news:
The longer you live, the greater your chances of wearing out physically
and mentally before you pass on. Just visit any local nursing home or
hospital for proof.
When it comes to avoiding unpleasant people,
most people need not wander too far from their own family tree. For
example, while many Americans live in a world of almost unlimited
choices, few are able to pick their own parents or the spouses of their
own children. In a sense, every extended family is a unique, dynamic
ensemble of individual personalities and values. Just like a musical
ensemble, family relationships can produce beautiful music or horrific
noise, and oftentimes they produce a little of both.
Excuses,
Excuses
The handmaiden of
procrastination is rationalization. We human beings have an
uncanny ability to rationalize our procrastination, commonly in the form
of excuses. Here are a few representative excuses to postpone
proper estate planning, along with tongue-in-cheek responses to each of
them.
We don't have time, because we are getting
ready to do some traveling. Curiously, most people spend more time
packing their luggage, than they do making proper estate plans.
My son can't get away from work to come
with me for an initial consultation. Perhaps it is best to wait
until you are incapacitated or dead, so your son can take off work to
sort through your assets, squabble with his siblings, hire an attorney
and develop an almost first-name relationship with the probate judge.
Since my children all get along, there's
no need to bother with any estate planning. You may be right. They
will certainly know your special wishes regarding your home, your bank
accounts and your investments, not to mention your one-of-a-kind
heirlooms like the kind over which you and your siblings fought after
your parents died.
We don't have an estate tax problem. Why,
my business has no value without me. Perhaps, but the IRS may not
agree with you, especially given your inventory, equipment, real estate,
loyal customer base and goodwill.
It's too expensive. You have spent a
lifetime building your wealth, by working hard and making a good return
on your investments. Wouldn't it make good business sense to invest a
few thousand dollars in professional fees to save potentially hundreds
of thousands of dollars in unnecessary taxes, protect your financial
legacy (both from and for your children) and preserve family harmony?
Final
Thoughts
It has been said that tomorrow is not a day
of the week. Imagine the peace of mind you will enjoy when you
overcome your mañana mentality and implement a proper estate plan for yourself,
your loved ones and your hard-earned assets. Nevertheless, proper estate planning is a Lifetime
Process. Once your plan is implemented, it must be properly
maintained as important changes inevitably occur.
First
Things
In this article we
will review the first things adult Americans must decide as they make
proper estate plans to protect themselves and their loved ones in the
event of their incapacity or death. First, who will take care of their
minor children and, second, who will manage their financial matters and
the inheritance for their children?
Guardian
Guidance
Even if you are separated or divorced, the
surviving biological parent of your minor children will continue to be
their legal guardian, absent a court-proven case of unfitness.
Otherwise, you can control who will rear your minor children to
adulthood.
While every family situation is different, here
are some general pointers for your consideration when selecting
guardians for your minor children:
-
Select
guardians who share your faith, values and life priorities; and already
have an established positive relationship with your minor children;
-
Consider
selecting a married family member, appointing the family member only,
not their spouse in case your family member predeceases or they divorce;
-
Make
sure your estate plans provide for the compensation of the guardians, or
at least that assets are available from your children's inheritance to
cover all expenses incurred on their behalf; and
-
Obtain
the permission of the selected guardians before appointing them in your
legal instruments.
Fiduciary
Fulfillment
Simply put, a fiduciary is a person or an
institution legally responsible for the financial affairs of another.
Fiduciaries are held to the highest standards of care and loyalty in
this role. Who will manage your financial matters if you are ever
incapacitated and any inheritance left upon your death? In the absence
of appropriate legal planning, the selection may be left to a judge who
likely does not know you or your family.
With proper estate planning, however, you have
several options, including:
Option #1: Appoint trusted family members or
friends. After all, they are more likely to know the strengths and
weaknesses of your heirs, plus they may not charge much, if anything, to
oversee the inheritance. Downside: They may be busy with and distracted
by their own financial responsibilities.
Option #2: Appoint a professional fiduciary,
such as an institution (e.g. a corporate personal
representative/trustee). While such a party may not know all of the
strengths and weaknesses of your heirs, this could be an advantage. Who
better to disapprove the use of an inheritance for an expensive sports
car than a non-family member?
Option #3: Combine Options #1 and #2 for the
best of both worlds. In other words, the family appointee who knows the
strengths and weaknesses of your heirs will not jeopardize their
relationships with your children, nor will they get bogged down with
investments, accounting and tax details. Instead, the professional
fiduciary shoulders (and is compensated for) all of the green-eye-shade
and stubby pencil work regarding the day-to-day management of the
inheritance for your heirs. Plus, they can play the heavy, if needed.
Summary
Few decisions in life are more important than
those appointing appropriate guardians and fiduciaries. Accordingly,
always seek competent legal counsel for these and other legal decisions
affecting your family matters.
Copyright © 2005 Integrity Marketing Solutions. All rights
reserved. Some artwork provided under license agreement. This
publication does not constitute legal, accounting or other professional
advice. Although it is intended to be accurate, neither the publisher
nor any other party assumes liability for loss or damage due to reliance
on this material.
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