Two real life stories underscore the importance of making plans for our assets before it’s too late. If we are lucky to have more money than we can spend in our lifetimes, our generosity can work wonders. Even when our means are rather modest, thoughtful estate planning can make a real difference to others.
How Inspiring!
Gerry W. Beyer of Texas Tech University School of Law shares the inspirational story of Charles “Chuck” Feeney, “a pioneer of duty-free shops and technology startup investments,” who before dying, at the age of 92, had already “donated almost $8 billion to charity, generally discreetly”:
Feeney’s life was marked by contrast. He came from a working-class family in New Jersey and served in the Air Force. He pursued hotel management in college and entered the duty-free shopping industry by selling liquor, cigarettes, and perfume to American service members returning from Europe in the 1950s. The duty-free business took off, and he began to amass a fortune. However, Feeney was uncomfortable with the lavish lifestyle. He distanced himself from wealthy social circles, flew economy class, purchased off-the-rack clothing, and opted for subways or cabs for transportation. More importantly, he committed to donate his wealth anonymously, a choice made by just 1% of American philanthropists, according to experts. Feeney didn’t wait to grant gifts after death or set up a legacy fund that annually tosses pennies at a $10 problem. He hunted for causes where he could have a dramatic impact.
Avoid Mystery…
Though few of us are likely to experience the joy of spending big dollars on causes we care about, we can all avoid leaving assets with no plan behind us when we die. Of course we are not all millionaires, but the delays and costs associated with probate complications can prevent our loved ones from benefiting from whatever we can offer, such as funds that put a dent in a scary mortgage, college loan or car payment–all of which can turn out to be life changing for the receiver. Now imagine what the $11 million, left, without a will or apparent heirs, by Joseph Stancak when he died in 2016, could accomplish. Unfortunately, it is frozen, while legal proceedings and mysteries pile up. As Law Professors share:
Stancak’s estate is considered one of the largest unclaimed estates in the United States, with more than 119 distant relatives around the globe who were informed that they would receive payouts. Then, a mysterious will surfaced in Cook County probate court … .A petition was filed asking that the newly turned-up will be probated, so a hold was put on any inheritance payouts until the will’s legitimacy could be sorted. The document presented was a will dated August 19, 2015, leaving Stancak’s entire estate to Smart Kids Child Care Inc. Only two copies were produced: one to be held by Smart Kids Child Care Inc. and one by the lawyer who allegedly drafted the will, a personal injury attorney John Alleman. But Alleman died in a plane crash a few months after the will was signed. The document has been called “highly suspicious” and …was only discovered after the unclaimed estate made international headlines.
Good To Do: Plan…The Basics
The basics of estate planning typically involve a will, which takes effect upon death, and some companion documents that help your loved ones make decisions about health and finances should you experience a decline. Specifically, according to estate planning experts, it’s a good idea for every adult to attend to these documents:
Last Will and Testament: This is a legal document stipulating who you want to receive your property when you die. This streamlines the probate court process….Your executor will carry out the wishes outlined in your will. You can also name a guardian for your minor children in your will….
Living Will: A living will is a legal document detailing the medical treatments you would or would not want to help keep you alive….
Health Care Proxy: A health care proxy is a legal document naming someone you trust to make medical decisions for you if you become unable to make them yourself.
Power of Attorney: This legal document allows someone you trust to act on your behalf with legal and financial matters. A Power of Attorney is a crucial document to have in place in the event someone becomes unable to handle their own financial affairs.
Establishing a trust, which can be used in tandem with a pour-over will, can also be an extremely useful way to ensure care for ourselves and distribute assets over time, based on specific family goals. Note that since wills only become effective upon the death of the testator (person creating the will), they are not a useful way to plan for our own potential declines. Additionally, wills do not allow for the distribution of assets to beneficiaries based on milestones, like age or educational attainment. Trusts can even be set up to care for pets or to commit funds to charities. You can get a quick overview right here.
An important aspect of estate planning is the designation of one or more fiduciaries to administer it. Burns & Levinson share these examples of the specific roles fiduciaries can play, depending on the specifics of estate plans:
- Executor (called a “personal representative” in Massachusetts and some other states) of your estate;
- Trustee of your trust;
- Guardian of your minor or incapacitated children;
- Attorney-in-fact authorized to act on your behalf pursuant to a power of attorney document; and
- Health care agent authorized to make medical decisions on your behalf pursuant to a health care proxy document.
Regardless of nomenclature, the representatives you designate to follow through on your plans are fiduciaries: they have a legal responsibility to carry out your affairs in accordance with your intentions and the law. Be sure that those you name understand the real responsibilities involved and are armed with the information needed to carry them out. When representatives such as executors, personal representatives or trustees are designated, estate bonds can be required. Learn more about estate bonds right here.
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