Estate Planning

Valentine’s Day Planning

Posted on Feb 15, 2019 in Community, Estate Planning, Family

Sweethearts Candies

If all the pink hearts and chocolates you’ve been seeing in stores since just after Christmas weren’t enough of a giveaway, it’s Valentine’s Day. The first conversational candy hearts were crafted by the New England Confectioners Company in 1866.  Yes, that means we’ve been doing this for over 150 years.  And this year you probably heard that due to a change in control at the company, it would not be producing the chalky, nearly flavorless candies.  Yet Valentine’s Day marches on.  The National Retail Federation projects that we will spend $19.6 billion this year on Valentine’s Day.

All the hubbub can leave many feeling like they’re missing something: a romantic partner, a partner who is romantic, or the right combination of candlelit dinner/jewelry/flowers/candy. Setting aside the consumerist take-over of the day (as well as its dark history), and considering its modern meaning more broadly — as a celebration of love  — that is a worthy goal.  Love is one of the few truly infinite resources we have, and it takes many forms: romantic love, friendship, familial love, self-esteem or love of oneself, and love outside of one’s self, whether that be for humankind, nature, a vocation or God.  Building a truly rich life incorporates as many of the types of love as possible. Celebrating and enhancing these connections is what we strive to do.

Valentine’s and Love

Last week I went to hear John and Julie Gottman talk about love. Not about finding it, but about knowing when you really have it, and about keeping it once you do. The Gottmans were at Town Hall to promote their new book, Eight Dates: Essential Conversations for a Lifetime of Love.

Gottman and his colleague Robert Levenson founded the “Love Lab” 45 years ago. As the story goes, they were “two clueless guys who knew nothing about relationships” who decided to research relationships.  John recalled how, 33 years ago as a newbie to Seattle, he decided to answer every personal ad in the Seattle Weekly.  In two months, he dated 60 women, and that experience was the start of his “date-a-base.” Over the years at the Gottman Institute, they studied 3,000 couples to see if they could find scientific evidence of the characteristics of long-lasting love. John’s methodology and the Love Lab developed their renown based on their 94% accuracy rate in predicting whether couples would stay together.

Love and Connection

When asked about what keeps people on the hunt for love, despite rejection and failures, Julie Gottman noted that at the core of their research they find that what we all want is connection.  She says this, and the room gets quiet.  At the end of the day, we all want to be valued, to be seen, to be heard, to be loved. Whether we’re coupled or not, this need for connection unites us all.

Love In Many Forms / On Many Forms

The other take-away from the Gottmans’ talk is how the base of any good relationship is in how we communicate. Whether love between romantic partners, friends, within families of origin and of choice, communities to which we belong – all types of love enrich our lives.  You want to enjoy them while you have them, and you might want to leave something to them after you’re gone.  This is where a little planning comes in.

Each of your retirement accounts (401k, 403b, 457, IRA etc) and life insurance policies passes to your heirs by way of a Designated Beneficiary.  You may think your Will controls everything, but it does not control these assets.  Because life is long and things change, you should check your beneficiaries to make sure they are current.  Beneficiaries can be people and/or charitable organizations.  To check yours, you should be able to go online to view your retirement account beneficiaries, and typically you just need to submit a form to change them if needed.  For life insurance policies, beneficiaries  may be viewable online, or call your carrier.  If you’ve gotten married, divorced, had children or have just had a change of heart regarding your legacy, check in to make sure you beneficiaries are up-to-date.

In addition to however else you might plan to celebrate (or not celebrate) Valentine’s Day, do choose a day to check in about your beneficiaries.  Make sure the ones you love are reflected accordingly.

A Note on Galentine’s

If Valentine’s Day isn’t for you, perhaps Galentine’s Day is. In 2010 Amy Poehler’s character on Parks & Recreation, Leslie Knope, invented the notion of “Galentine’s Day.” February the 13th became the day when women celebrate their female friendships, traditionally over breakfast which Knope described as “Lilith Fair minus the angst and plus frittatas.”  Eight years after that TV episode aired, we’re still referencing this holiday.  It’s true both days have been mercilessly merchandised and enforce stereotypes about women (single and coupled), money and what we all want.  But who doesn’t like an excuse for frittatas?

If you missed Galentine’s Day this year but want to plan ahead for 2020, here is more info on How to Celebrate Galentine’s Day the Leslie Knope Way .

In any event, here’s to a happy Thursday and a little love in your life.

Read More

Downton Do’s and Don’ts: What Downton Abbey Can Teach You ABout Financial Planning

Posted on Mar 30, 2014 in Estate Planning, Family, Uncategorized, Women

SPOILER ALERT: If you’re not already watching PBS’ masterpiece series, Downton Abbey, first of all, where have you been? Secondly, you may want to read this after you’re caught up on the travails of the Crawleys and the Granthams through Season Three of the series.

In the wealthy world of Downton Abbey in early twentieth century England, one didn’t discuss money. And gender lines often determined roles in financial management, despite one’s skills, or lack thereof. In the early twenty-first century, one luxury we don’t have is to ignore our personal financial lives, and Downton provides some solid lessons.

1. DON’T Die Without A Will
After surviving war, injury and star-crossed romance, Matthew Crawley finally finds love with Lady Mary Grantham. Tragedy strikes at the end of Season Three when Matthew is killed in a car accident, leaving a widow with a young child. He was 32.

Don’t think it can’t happen to you. I still have young clients who start an estate planning conversation with “ If I die…” The only two things I can say for sure about anyone’s financial plans are that their plans will change, and they will die. No one expects an accident (thus the name) and the time is now to get your affairs in order.

Often it’s a life change (marriage, birth of children) that prompts clients to start the estate planning process. Guardianship of children and taking care of a surviving spouse are classic needs addressed in estate planning, but everyone including single individuals needs to have a plan: to make known your wishes for life-sustaining treatment (or not), management of assets in the event of incapacity, even planning for your pets. Your dependents are depending on you.

Matthew left a witnessed note that was deemed adequate to express his wishes, but without it, English law would have decided the financial fate of his wife, son and estate. Single or married, with children or without, see an estate planning attorney for basic documents (Will, durable powers of attorney for health care and financial matters). If you don’t have an estate plan, the State will have one for you.

2. DO consider your skills realistically
Robert, Lord Grantham, wants to manage all of Downton’s assets now that Matthew is gone. Viewers will recall not one but two incidents in which Robert’s poor money management almost cost the family its ancestral home. The first crisis was averted by his marriage to Cora Crawley and her fortune. Season Two found Downton in financial peril again, after Robert has lost Cora’s fortune through bad investments. It’s Matthew inheritance from ex-fiancée Lavinia Swire that comes to the rescue and Matthew becomes co-owner of Downton.

Season Four opens with Robert’s assumption that despite his history of poor investment choices, he is nonetheless the right person to make financial decisions for Downton, and he talks excitedly about a new investment scheme by this fellow called Ponzi.

Note that the 2013 IRS Schedule A now has a new section (Form 4684) for reporting “Ponzi-type investment losses.” Charles Ponzi was a con artist who in the 1920s swindled clients out of $20 million. Bernie Madoff is our modern-day equivalent.

Why would Robert consider himself a competent money manager, given his history? Because he is head of the household? Because he has a title? Because he is a man? Talent and skill in one area do not necessarily indicate talent and skill in others. You may have skill or interest in personal finance, but do you have the time and discipline to implement what you learn? And to stay current? Ultimately you own financial decisions about your assets. Consider your skill, interest and available time when determining whether to go it alone in managing your finances. Whether you seek help through your own research or through the help of an advisor, don’t let traditional roles or pride deprive you of access to the information you need to make the best decisions for your financial situation. And don’t (like Cora) relinquish all involvement in management of your assets.

3. DON’T Be House-Poor
Downton Abbey consists of a grand country house (the real Highclere Castle in Hampshire, England and its 5,000 acres of grounds) and land, some of which is leased to local tenant farmers. The dilemma of much of the landed gentry is having real estate with high operating costs, but no income-generating assets to support on-going expenses.

Similarly, modern-day families can end up “house-poor”: taking out the highest mortgage possible on a home, keeping the family home in divorce, or maintaining a home with lots of equity but minimal sources of income in retirement, all without regard for the cash flow needed to support the debt and the upkeep on the property. A house-poor situation can leave you with such a large portion of your income going to support your home that you are short of cash for discretionary items, or even other financial obligations.

Downton’s estate agent is working to use empty farmyards as an additional source of income, among other ideas. Turning a house into an income-generator is harder: you can rent out rooms, or take a reverse mortgage. Better still: consider not only the capital cost of an asset (its purchase price), but its on-going operating expenses (mortgage payment, property taxes, insurance, utilities and maintenance). Trading a dear family home for a more financially manageable one could be the optimal solution to restore a balance between income needed to support your home and income you can use for other expenses, giving you a financial life that is less cash-constrained and less stressful.

4. DO Take a Place at the Table
Mary Crawley begins Season Four haunting the halls of Downton Abbey, the closest thing you’ll see to a zombie on PBS, grieving the loss of her husband Matthew. Often when parents can barely keep going for themselves, they pull themselves together for their children, but she is so deep in mourning she isn’t even able to engage with her child, George.

But Mary has a mentor. Two actually. Tom Branson, the ex-chauffeur and widower of Lady Sybil, has straddled lives above and below stairs. As estate agent, Tom is responsible for the competent management of Downton. He sees Robert working to take control over the estate after Matthew’s death, and believes Mary’s salvation – personal and financial – lies in finding an interest outside of herself, which he thinks is Downton.

The second mentor, Mr. Carson, master of the house below stairs, has known Mary her whole life. At the urging of Tom, Mr. Carson has a caring but stern talk with Mary about her need to step up for George. Initially Mary rebuffs Mr. Carson, but in time embraces his encouragement literally and figuratively. Both mentors were key to helping Mary reconnect with the things she values.

With Mary unstuck from her grief, she shows up at a gathering of tenant farmers and takes a place at the table. Sheryl Sandberg would be proud. Both mentors and taking a place at the table figured prominently in Sandberg’s book Lean In. Lady Mary doesn’t know all the answers, she knows not everyone (and including some dear to her, like her father) will cheer her involvement, but she knows it is her responsibility to George, to Matthew, and to herself, to try to become the best steward she can of the family’s legacy.

By taking a place at the table, you engage in your financial life. You don’t need to know everything: sometimes you’ll listen, other times you’ll speak. All of us are better served by fully participating in the decisions that affect our lives, and financial decisions are some of the biggest. You aren’t going to have all the answers, but you do need to be part of the discussion.

5. DO consider whether you’d be comfortable above stairs
Assuming you’re not already a member of the landed gentry, you might want to reconsider whether a life upstairs is for you.

We spend a lot of time thinking about how to accumulate enough money to leave paid employment. But once you get there, is it enough? Many retirees face the challenge of leaving their identities behind with their jobs, and finding meaningful activities to replace their work. Some of you might be longing for days filled with golf or shopping, but others might be bored with the Grantham-style whirlwind of constant clothing changes and gossip about what other people are doing, while doing little else themselves.

Particularly for the young and freshly financially independent, think about what you’ll do with yourself now that money isn’t the object. If money isn’t the object, what is? Virtually all the research on happiness points towards having a purpose and a connection to others that give us joy in life. Whether you’re from old money or new, or working to get there, taking time to reflect on what really matters to you, and using these values to guide management of your finances is more likely to provide you with a truly rich life.

The early twentieth century was a time of changing roles, changing technology, changing economies. In the early twenty-first century we face similar challenges, and we can tune in to Downton to find lessons that still apply today.

Read More

Managing Your Digital Assets

Posted on Apr 17, 2013 in Estate Planning, Technology

Your Digital Afterlife: When Facebook, Flickr and Twitter are Your Estate, What’s Your Legacy?
By Evan Carroll and John Romano

Email accounts. Facebook. LinkedIn. Twitter. Tumblr. Flickr. YouTube. Your data is going to outlive you. My first exposure to issues with digital legacies was after 9/11, when surviving friends and loved ones were left with voice mail messages from those who died. There was some debate about whether this electronic remnant offered helpful comfort or impeded the grieving process, and what to do with those messages from the deceased. We all will leave digital legacies behind. Evan Carroll and John Romano have discovered a new wrinkle in estate planning: what to do with your digital legacy.

Your Life Online
More of our life now happens on-line: email replaces letters, Picasa replaces family albums, and birth announcements are made on Facebook. Carroll and Romano outline the issues of access, ownership, privacy and preservation. We may have worked hard to create something of value in the digital world that we want preserved. We may have other items we don’t want passed on, or even viewed by family and loved ones after our death. Understanding the current limitations of managing a decedent’s digital presence and devising a plan to deal with them are at the core of this book.

Who Owns Your Data
You might think the hard part is deciding whether to pass on your digital legacy, or lay it to rest. Not so fast. You won’t necessarily be able to assign your email account to another person after your demise. Carroll and Romano describe the lengths to which one man had to go in order to preserve email correspondence with his son, a soldier who was killed defusing a roadside bomb in Fallujah. Father and son had intended to create a scrapbook of the emails and pictures, a request the family planned to honor in memory of their son. But the family’s request for the emails was blocked by Yahoo!, citing its Terms of Service, which said accounts were non-transferable. It took six months, national attention and a court case to allow the family to have access to the son’s email account.

Organizing Your Digital Assets – A Resource
Your Digital Afterlife outlines these issues, then turns into a workbook that goes through hardware devices (computer, phones) and online tools (websites, email) to help you develop a plan for assisting your appointed Digital Executor to identify the assets, gain access, and understand your wishes for them.  To find out more:

My interest in technology relates to how people interact with it, and how it helps them interact with each other. This book is a highly readable look at a cutting edge issue affecting us all, and it offers very practical solutions you can put into action.

This review first appeared in NAPFA Advisor Magazine.

Read More