Episode 33: You Can’t Take It With You… But You Can Plan for It: My Top Three Tips

Estate Planning Lawyer, Peter Klenk

It’s Peter Klenk. Klenk Law. Again, here to talk about death and taxes. I’m sitting here with my red coffee mug, and hopefully you’re relaxed too. Let’s talk.

The subject this time is: you can’t take it with you, but you can plan for it. I’m gonna give you my top three tips — things that I’m always talking to people about. Just things that you can consider when you’re thinking about your estate plan in preparation. That way, if we talk some time to come in, you’re ready to hit the ground running.

These are just basic things that pretty much help everybody as we go through. And if they don’t help you, they help the folks after you go. They’re gonna make things easier, cheaper, meaning more of your money ends up in your children or your heirs’ hands. Which is, you know, why not? That’s the way to go.

First thing: Control.

Just try to be a little more organized. I know that sounds simple, but you’d be surprised. You know where all your stuff’s at. You do. It’s easy. You know where your checking account is, you know who your accountant is, and you know where that CD is.

But maybe once in a while, you don’t even remember where your stuff’s at. You have to sit down and scratch your head and go, “Yeah, there’s that bank… that bank…” Now think about how hard it would be if you just died, and now somebody needs to find your stuff. It can be a real pain.

Now we can do it, alright? We can get your tax records. We can find out where your income was coming from, where your interest came from. We can find out where you send checks to pay for an accountant. We can do all that, but it takes time and money.

So how do you communicate that? Because it is your private business, and a lot of people don’t want their private business being shared during their life. I’ll tell you how we do it, and maybe you can use that as a guide.

Everybody we do estate planning for has what we call a summary. That summary is a document that outlines the documents they’ve done: wills, trusts, powers of attorney, living wills, all those things. It’s easy for the client to look at quickly and say, “Oh, yeah. That’s right. I did that.” Because, you know, you’re not gonna remember after a while.

Part of that includes a set we call, “Who do we call when you’re dead?” I mean, that’s not what we tell you we call it, but that’s what we call it. Because it’s true. Who do we get a hold of?

And it really is not that much information. A lot of people hesitate putting their things in order because they envision they need a spreadsheet with account numbers and passwords. We don’t need any of that. We just need to know where to go.

This list just says “Bank” and the name of your bank, like PNC or TD Bank. They don’t need your accounts. They don’t need to know how many you have. They don’t need account numbers or passwords. None of that is relevant. After you go, all that kind of goes away anyway. They just need to know what bank to go to.

Same thing with financial institutions, CDs, retirement accounts, 401(k)s — just who to call. That’s all they need. The breadcrumbs. The basic, basic things.

It’s really easy to do. We nudge our clients every six months to keep that up to date because then, when you go, we can hand that list to your kids or whoever you’ve named as your executor. Days later, they can be on the trail of getting all your stuff without worrying about losing things.

Good example: life insurance. I can’t even tell you how many times people come to us and say, “My mom had life insurance.” Which company? “We have no idea.” What a pain.

If you just wrote down the name of the life insurance company, they just have to call and say, “Did my mom have something here?” And they’ll say yes. Then we find it. So much easier.

So again, a little organization doesn’t have to be hard. Really just the basics: the skeleton outline of where your stuff is, who to call, and things are so much easier.

Second thing: Be realistic about who you’re leaving your money to.

Now I’m gonna keep using “kids” as the example, but you can apply this to whoever you’re leaving things to. A lot of people are not honest with themselves about who they’re leaving their things to. And I think that’s human nature — we don’t want to look at potential blemishes.

But you gotta be honest. That helps us do planning.

Example one is obvious: your kid is on Medicaid and has a disability. You gotta let us know. If you die and leave that child funds, you disqualify them for Medicaid because now they have too much money. That’s a horrible mess for them.

You also have to be honest about personalities. Leaving a chunk of money to somebody in a lump sum when they have a gambling addiction, or they’re in the middle of a divorce, can be harmful. It can vanish. It can hurt them in negotiations.

So be honest about your heirs and their situations. Then we, as the trust and estates people, can help craft something to avoid those conflicts.

Remember, it’s your money. You’ve worked hard for it. You’re leaving it to them. It would be good if it had the opportunity to be used in a good way rather than causing harm or being wasted.

You also have to be realistic about how your heirs get along. I can’t tell you how many times we’ve seen estates where the person in charge causes nothing but conflict. People often pick their eldest child, but that child might not have the personality to handle things. They let things slack. They don’t want the responsibility. It gives them anxiety.

Now you have family conflict that could have been avoided by picking a better person. Sometimes, if you have three kids and you pick one, the others get irritated. Maybe it’s better to pick your brother, or somebody else, to avoid conflict.

So be realistic about who inherits and who is in charge.

Third thing: Plan for family dynamics.

Humans tend to avoid things that seem like a lot of work or that might create conflict. But if you’re honest about it, and if you brainstorm with your estate planning person, there are always ways around these issues.

The end result? Things flow more smoothly. You’re organized. It’s easier to find things. It costs less. All the heirs see the estate flowing easily. They’re not in charge, but they can see the process, and it brings them comfort.

You’re not causing conflict or harm. You’re not throwing gasoline on the fire of your family. You’re making it smoother for them.

These are things your trust and estate attorney can help with. It’s what I do every day. So as you prepare your plan, be realistic about these things and bring them up so we can address them.

Those are the big three. There’s a lot more we’ll talk about — tax-related, asset-protection-related — but these are the basics that help everybody.

Anyway, it’s been great talking to you. Take care, and at least like and subscribe so you know when I release these podcasts. I look forward to talking to you again in the future.