Where There’s a Will

getting your affairs in order can give you – and your survivors – peace of mind

Tom Giffey

“If you fail to plan, you plan to fail.” It’s one of those quotes we’re accustomed to hearing from coaches, guidance counselors, and others who extol the virtues of setting and achieving goals. It’s an anonymous pearl of wisdom that’s been placed in the mouth of everyone from British Prime Minister Winston Churchill to contemporary time-management guru Alan Lakein.

And while it’s tempting to dismiss such sentiments as motivational-poster pablum, the idea that failing to plan is akin to planning to fail is actually quite sensible. Consider the necessity of making plans for what happens after you die. If you don’t take the steps to put a will, a trust, an advance directive, or other necessary documents in place, it’s quite possible that whatever wishes you had for your legacy will die with you. Sure, you won’t have to deal with the failure, but your survivors certainly will.

If you want to avoid that possibility, it’s time to make a plan.

What About the Kids?

Anyone and everyone can benefit from estate planning, from younger couples with children to older people with large assets hoping to pass them along, says attorney Laurie Klinkhammer, a partner in the Eau Claire law firm Nodolf Flory who specializes in estate administration and planning. In fact, Klinhammer emphasizes, “It’s much more important (to get a will) if you have minor children than if you’re single and have $40 million.”

“All of a sudden they realize something could happen to us, and what’s going to happen to these kids?” Klinkhammer said of parents who make their way to her office. In such situations, two of the most important questions a will can address are who will take care of the children and who will oversee their deceased parents’ assets for them.

If you don’t have a plan in place when you die and you are survived by minor children, a court steps in and appoints a guardian. Courts can also create mechanisms to hold assets for the children until they reach the age of 18, but not beyond. “An 18-year-old with a big chunk of money is a bad idea,” Klinkhammer noted. Even adults who receive inheritances typically spend them within a year, so you can imagine how quickly a teenager could burn through a newly attained pile of cash. An alternative is to create a trust that delays an inheritance until the child is older and (ideally) better able to manage his or her finances. Such trusts can distribute funds to help pay a child’s medical,educational, or other expenses, even before he or she becomes an adult.

Time for a Trust?

Parents of minor children aren’t the only people who need to consider what will happen to their assets after they are gone. For the owner of a business, for example, failing to plan correctly can lead to major problems, Klinkhammer notes. In some cases, it may be wise to create a revokable living trust, which allows you to control your assets while you’re alive and capable but transfers control to a trustee when you die or become mentally incapacitated. This trustee will make decisions on your behalf and settle your estate as you wish once you’re gone. One advantage of creating such a trust is that your estate will avoid the sometimes lengthy and messy probate process.

However, trusts aren’t for everyone, and sometimes relying on a will alone is more appropriate, Klinkhammer says. In other words, talk to a financial advisor or an attorney before making any big moves.

Do It Yourself? Not Always

And speaking of getting help from folks who know what they’re doing: When it comes to creating legal documents such as wills, it’s possible that preparing these papers on your own can work. At other times, not so much. Klinkhammer says you shouldn’t assume that it will cost a fortune to prepare the legal papers you need. It probably won’t, and you should ask an attorney upfront what the fees will be.

It’s quite possible that consulting a professional will actually save you money in the long run. That’s the case when it comes to certain tax moves that might have a long-term impact on your personal bottom line and your estate. Kristopher Becker, tax manager at InCity Tax Service in Eau Claire, advises that when it comes to planning for the long haul you must make sure you know what you’re doing before you do it. This may seem self-evident, but some decisions that impact retirement savings and other later-in-life financial matters are irreversible and can lead to problems – consider, for instance, the tax penalties people may face when they make IRA withdrawals just a few months too early.

“The biggest mistake that I see is that some people will try to answer the question after the fact, rather than going through the process of asking the question before the decision,” Becker said. “People will come in and say, ‘This is what I did. I took it out of this fund.’ ” By the time people have made a bad decision, it’s usually too late to reverse.

“The saying that you can’t un-ring the bell typically holds true,” he adds.
In addition to seeking authoritative advice before making major financial moves, Becker says people should also keep good financial records – particularly if they have small businesses – and to remember that financial decisions made on any day of the year can have an impact when April 15 rolls around. “The only time they pull that folder out, the only time they’re interested (in taxes) is this time of year, and that can pose issues,” he says.

Fortunately, April 15 isn’t quite here yet. And, if you’re reading this, you’re still alive, which means you still have an opportunity to get the necessary paperwork in place for when – far in the future, we hope – that you finally leave this earth. You’ve still got time, so don’t fail to plan.


BY THE NUMBERS

44%

Share of American adults who say they have a will, according to a 2016 Gallup survey.

68%

Share of Americans 65 and older who have a will, according to the same Gallup survey.

36%

Share of Americans with children under 18 who have a will,
according to a January 2018 survey for Caring.com.

37%

Share of Americans who have advance directives, according to 2017 research by a University of Pennsylvania doctor.

21%

Share of Americans who have prearranged their own funerals, according to the National Funeral Directors Association.

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