In the late 90’s Spencer Johnson wrote Who Moved My Cheese? a story about changes we experience in life and four typical reactions to change in our ongoing quest for the cheese. Johnson’s main premise is that change happens, and anticipating and adapting to change is key to our success in life.
This is why we want our clients and friends to continually monitor their estate plans in view of changes in their lives. One of our professional goals is for all our clients to be able to answer yes to the following four questions:
- Do I understand my estate plan?
- Does it meet my goals and will it have a positive impact on my beneficiaries?
- Are my assets titled in a manner that is consistent with my plan? AND
- Do my helpers understand their responsibilities? (“Helper” refers to agents, trustees and executors)
If you are unable to comfortably answer yes to all of these questions, we recommend scheduling a review of your plan or attending one of our free
Planning for loss of independence and incapacity is one of the most difficult and overlooked aspects of estate planning. The need for action can be unexpected. This brings front and center our fourth question above: Do my helpers understand their responsibilities? Put another way one could ask: Do my helpers have a clue?
Planning for incapacity involves more than signing powers of attorney for health care and financial matters. A periodic review of the transition from independence to dependence is a must. As a starting point, we recommend developing a summary of critical providers (health, finance, legal, tax) your helpers need to know: names, phone numbers, email and other contact information. We call this our Helper’s Cheat Sheet.
Give your helpers an updated copy every year. Make it a ritual on your birthday or on a holiday. We also recommend introducing your helpers to your various healthcare providers and other advisors. If they know each other, your transition will be smoother.
One of life’s most daunting challenges is dealing with memory loss. Caregivers need substantial help from family, friends and professionals, and must navigate a great deal of information from a variety of sources in order to successfully manage this sometimes long and always difficult journey. In November 2013 the Fourth Edition of the Dartmouth Memory Handbook, edited by Robert B. Santulli, M.D., a recently retired associate professor of psychiatry at the Geisel School of Medicine at Dartmouth, was published. It includes a collection of articles written by various practitioners about Alzheimer’s disease and planning for incapacity. This handbook is available in paper or by clicking here.
Whether or not you anticipate transitions of the nature just discussed, the following is a list of events that could impact your plan:
- Death of a spouse or partner.
- Birth of a child or other beneficiary.
- Divorce or other change of a beneficiary.
- Purchased real estate; how should it be titled?
- Anticipation of substantial inheritance; how should it be inherited?
- Opening new investment account(s); how should it or they be titled?
- Purchase of life insurance; who should be the beneficiary?
- Turning 70 years of age; time to start planning for your retirement plan distributions.
- Moving to a new state.
- Permanent disability of a family member.
- Ownership of real property in a state other than your state of residence (especially if the other state has its own estate tax, such as all northeastern states except New Hampshire).
- Beneficiary with special needs.
- Beneficiary with substance abuse problems.
If your thinking has changed, you have new ideas, or any of the events listed above have occurred, we recommend you review your plan to make sure you can still answer yes to our four questions noted above. Happy New Year!