Planning for Change
Life is full of change. Witness just the last few years of American history. An unprecedented Presidential election and contest. Radical changes in tax laws (four major changes in four years) and almost constant revisions to retirement plan income taxation regulations. A dramatic decline in the stock market and significant increases in unemployment as some of the economic policy of the last few years plays out it’s course. Terrorism – BIG terrorism – on our own shores. Declaration of war on terrorists and those who harbor them – some 50+ countries! A recently confirmed economic “recession” and ongoing recovery. Enron … and more brewing.
Never in my lifetime have Americans been quite so insecure, frustrated, and concerned – but also focused on our families, God, charity and country.
It really forces us to think again about our own financial and estate plans. If something happened to me now, would my family be okay? Would they have a legal and financial mess to clean up, or a carefully thought-out plan to follow with minimal expense and hassle? Will they have sufficient resources to take care of them in the standard of living I would hope? Are the investments and insurance I have adequate to provide for them? Maybe my plan looked pretty good two or three years ago, but things are different now.
Estate plans must be adaptable to change. We find that most people have thought about doing an estate plan, but they have only considered one step of what is actually a three step process. Every estate plan goes through three phases. Your plan (1) is initially created. Then you do not become disabled or die immediately so that plan (2) needs to be reviewed and updated periodically to stay current with your life and the world around you; then (3) you become disabled or die and the plan has to be carried out to do for you and your family what you intended.
So when you consider your estate plan, consider more than what it takes to just “create” the plan. Think also about what follow-through is required to make sure the plan will actually WORK!
We suggest that people assure themselves of a plan that will work by taking three strategic steps: Strategy One is to work with counseling-oriented professional advisors in order to create a plan that matches your goals instead of one-size-fits-all legalese plan that a word-processing attorney would put you in (matching his goal of simple drafting!). The follow-through that is so often missed starts with Strategy Two, and this step has never been so important as in our world of change. To get a plan that will work, you should enter into a formal maintenance and education program. If you could design that updating program, what would it look like? We would suggest that it be designed to help you:
- Maintain a reasonable awareness of your planning and how your day-to-day life might impact that planning;
- Assure from day one, and thereafter maintain, proper titling of your assets as you buy, sell, trade, invest … as your assets change;
- Educate those family members (or other helpers) who you want to take care of your affairs, so they will be prepared for their roles if you become disabled, and when you die;
- Receive professional recommendations as to changes that occur in the law and have your plan documents updated to account for those changes, so your goals will be met despite changing laws that apply to those documents;
- Be reminded to review and update the instructions you put in your plan as your family and your hopes for them evolve over the years; and
- Receive these benefits at a predictable, low cost, while assuring yourself that a licensed professional is responsible to deliver them.
Because clients seem to want these benefits, we designed our LifeSpan™ (built upon on what we originally called TLC Planning™) annual maintenance program with these and many more specific, detailed benefits in mind.
Finally, your family can only stay in control of your estate planning process if you press on to
Strategy Three: SECURE appropriate assistance for you and your family to Transfer your wisdom along with your wealth.
Only if you get commitments now from the professionals who will have to help your family with administration of the plan upon disability and death will you stay in control of all three steps of the planning process.