There was an article in the NY Times this week about James Gandolfini and his will. Essentially the article spoke to the decisions he made in regards to tax planning around his assets.
I remember when we first sat around a large conference table setting up wills for me and Fred. The first time you sit down and begin talking to accountants and lawyers about this kind of stuff it is strange and off-putting. What goes through your head is why am I planning for my death. Now that I have been through this more than a few times I am incredibly comfortable with it. I was actually quite comfortable with it after our first meetings around this topic a long time ago because I understood the value and importance of what we were doing.
After that first meeting I began to quiz our friends about their wills and what have they set up. I was amazed at how many of them had not planned for it. How can you not plan for this when you have children? It doesn't matter how much you have but to leave a financial mess for your kids, which hopefully will be very old adults when you die, it is just not the right thing to do. You want to make sure that they won't have to sell anything or take money from their own pocket to pay taxes upon your death. You also want to leave them as much as possible.
I got to spend a lot of time with Josh this past week as we spent most of Friday at the Hospital for Special Surgery having a new doctor look at his wrist. A very smart move. He started to ask me a bunch of questions that the girls had asked roughly around the same age as him about how we have set up things. To understand at a young age the importance of trusts, wills, legal documents, mortgages, investments, etc is a blessing because he won't be as weirded out as I was the first time we started to talk about estate planning. If anything, they all have the utmost respect about how thoughtful we have been.
I hope that Gandolfini planned better than they assume in the article, especially for his family. It is hard enough to lose someone you love at any point of time but when they did not take responsibility for the next generation and in turn leave them with a mess, it can make for anger vs grieving and there is absolutely no excuse to not plan accordingly.
I was totally shocked to find out that a friend of mine (also in his 40s) has no idea about his parents’ will or even bank accounts. If something happened to them tomorrow, he would have to start digging through desks to find out how their money is invested and where.
something that MUST be discussed!
This is a really important topic which touches several raw nerves for me. Elderly parents (by that i mean in their 70/80s) often don’t like discussing money as it is sometimes the last symbol of control they have over their lives. But having gone through now four different experiences where parents/grandparents intentions were murky at best, being absolutely clear before the fact is critical. But it is a difficult conversation, especially when in means facing the fact that it is an admission you don’t live forever. This kind of stuff destroys families. A couple rules our family broke are:1.) Legal advice is only good if it is followed up on. Remember to title property properly.2.) Don’t allow family members who are lawyers to write Wills, even if it is free. Everything will be suspect, sometimes with good reason.3.) Try to avoid making a child the executor. It creates all sorts of ill will in the family.4.) Make sure one or two people in the family know where the documents, safe deposit keys, and bank/investment accounts are located. Keep a list of accounts and passwords hidden somewhere…just don’t to forget to tell someone where.5.) Some people think talking about money is in poor taste. Get over it unless you really like surprises.6.) And finally, irrespective of anyone’s ability to support themselves, even splits are the only solution (unless your intention is to screw up sibling relationships from the grave).
I really love this post. It is so true. Also, just another microcosm of how fucked up our institutions are and that we accept it as the norm. The reality is even after you explain everything it is still not that easy to handle afterwards but it does make it 100x easier. I could only imagine what the process is like for people who don’t have much and aren’t able to secure a competent estate planner. Probably just costs them time and money. And so it continues…
It does continue
Great post. When I got sole custody of my son I immediately went to an estate attorney to have my will updated. I couldn’t sleep until I knew that my estate and son’s future were secure. Even though he’s 10 we’ve discussed this and, God forbid anything happens, he knows who will take care of him and who to trust for financial help.It is important to plan so that heirs aren’t left a financial mess and it’s important that children are not left vulnerable when when they inherit. It’s vital to ensure that there is no way greedy relatives can manipulate the estate. I’ve taken the precaution of scheduling payouts at long intervals so if my son makes a mistake he can learn from it (my parents idea and a very good one I think).Good estate planning helps both generations emotionally and financially.
good for you. our kids know the deal too and i am thrilled that they do.
.Effective estate planning is as much about tax avoidance — not tax evasion which is illegal — as it is about the distribution of one’s lifelong assets.An effective estate plan converts wishes into reality while preserving hard earned wealth and keeping it out of the government’s hands.You have paid taxes on this wealth at least twice already and there is no good reason why your untimely death should be a taxable event.The step up in basis for inherited assets is perhaps the last real tax advantage that one can embrace. People should understand this.Estate taxes were originally created to fund wars and they were enacted and terminated regularly as wars wound down. They just forgot to do it the last time around.Folks should not be even remotely sensitive about preserving their wealth — you earned it.JLM.
Thanks for this. Just sent the link to my mom, who avoids the issue because it makes her nervous. She does not even have a will. Crazy.
that is ridiculous.
She read the post last night. I think we’re gaining some momentum.