25 Aug Estate Planning: Caring For Your Family, After You’re Gone
It is our nature to read into the passing of famous people, to look for lessons and parallels to our own lives, however small, because we feel like we know them on some level even if we don’t.
If there is one universal sentiment we can all legitimately relate to, it’s this: we love our children.
That is true of me, of you, of Paul Walker, Casey Kasem, Philip Seymour Hoffman, and recently the gifted and beloved actor Robin Williams. I’d like to think this is true no matter how tormented life might be, as it appears to have been for Hoffman and Williams.
With that in mind, one of the greatest acts of caring you can see to now is to thoughtfully plan your estate. Whether or not we’re rich and famous, not enough of us do it. I was reminded of this especially when reading the news of Kasem and Hoffman.
Kasem, the legendary radio personality, was survived by his second wife and four children, three from a previous marriage. They are embroiled in a very public, bitter dispute over his assets and even his remains.
Hoffman, a highly respected actor, had three children with his life partner, to whom he was emotionally committed but not legally married. Public documents revealed he left his $35 million fortune to her, but specified little else except that he did not wish for his still underage children to be “trust fund kids.” His intent was obviously to act in their best interests, but without spelling out exactly what he wanted for them, he might have inadvertently made things more complicated for his family.
Hoffman reportedly did not believe in the institution of marriage, which is his prerogative, but the fact is that tax and inheritance laws are based on it. Because he was not married to his intended heir, the money he left her was taxed at a much higher rate, a circumstance he could have addressed and ameliorated with some planning.
Perhaps he knew the IRS would get a big chunk of his estate and was fine with that, but experience tells me that if he put even a little bit of thought into it, he would have realized he’d rather have that money go to causes he believed in, or perhaps used by his children to pay for school tuition. Like many people, he may have wanted those outcomes but just never got around to documenting them due to the busyness of life.
By not making those decisions yourself, you’re simply leaving that burden to your survivors, and believe me, those decisions are a burden not a privilege.
The more assets you have, the more heirs, the more specific your wishes, the more important good estate planning becomes. Inaction might seem, on the surface, like the simple, modest, less self-absorbed option, but it really just means that you’re going to leave the work and potential pain of sorting out your estate to your heirs while they are going through the pain of losing you.
Death is inevitable, perhaps the one thing we all know will come eventually. While we can hope that we will see it coming and be prepared for it, we have to plan like we won’t.