Discussing Estate Planning with Loved Ones
My father and I were sitting at the dining room table. I was home that week to take him to his radiation appointments, to his chemotherapy appointments, and to assist him around the house. He had mostly lost his voice at that point. Cancer of the larynx had transformed the voice I had known for almost 30 years into an indistinguishable, quiet rasp. Pill bottles strewn across the table, I pulled out a piece of loose leaf paper from my father’s laptop bag. “Dad...I need you to outline the entire operational process of HB Parking for me.” And there I went, building a flow chart of employees, accounts, cash flow processes, people who have access to accounts, commercial landlords, rent payments, etc. Little did I know that a month later that piece of paper would be critical when I took over a company that I knew nothing about.
The point of this post is neither to instill fear nor evoke sadness. It is to start a dialogue around estate planning and to encourage people to start the conversation before our loved ones are sick. My Dad had been the executor to many estates so he was actually extremely organized when it came to estate planning. He had a thick binder that included all of his assets and debts, color coded and all. This binder was a life saver when I first sat down with my estate attorney. In my opinion, if you can do anything for your executors and beneficiaries, it is this: write out all your assets and debts, keep them in a safe place, and tell those people where they are kept.
Although my Dad was organized, there was a critical component missing: we had never sat down together to go over this binder. Every deed to his real estate properties, his will and trust, his bank accounts, his credit cards, etc were inside that binder. However, while I knew my father owned a lot of real estate, I could not have told you where those properties were located, let alone a single detail about them. Now all of a sudden, I was the landlord. For anyone unfamiliar with being a landlord, let me tell you. There is a lot more to it than having a copy of the deed in a binder.
The importance of open communication with your loved ones about estate planning cannot be overstated. Executors and beneficiaries need space to grieve when their loved ones pass away. It is our responsibility to those managing our estate to make sure that our affairs are in order, our desires are written down, and any guesswork is eliminated. Being an executor is a big job. I will not sugar coat the responsibility that comes with this appointment. The best time to start talking about how your legacy will be passed down is when you, the person you appoint as executor, and your beneficiaries are all happy and healthy. Your loved ones are not protected when you pretend that nothing will happen to you. Your loved ones are protected when you make tax efficient estate plans and go over these plans with them in scrutinizing detail. Therefore, let’s shift the paradigm and be open about the inevitable. I encourage you to have these difficult conversations with loved ones and make the planning process inclusive. That is the only way our loved ones will be able to grieve freely when we leave this earth.