As the saying goes, none of us get out of this world alive. And as much as we prefer to ignore this basic fact of life, we really should plan ahead for it. As part of the trust and estate work we do in our firm we see a lot of elderly clients and post-elderly clients (estates) where messes have been left to the family and/or heirs to sort out that could have been prevented had the decedents done things differently. The worst cases end up with acrimony in the family, or in court, which nobody wants. To prevent this from happening to you, I have the following primer of things to consider as you get “longer in the tooth” to make your final years easier for those who will be with you and who will remain after you are gone.

  • Have a Living Trust or Will completed. If it’s been more than a few years, have it reviewed by a good attorney that specializes in trusts and estates. The recent tax act changed estate taxes and your old document may need to be tweaked. Avoid trust mills or companies that create trusts cheaply based on volume. There is nothing more expensive than a cheap attorney, and your kids will be the ones paying the bill. Never do it yourself.
  • If you plan on making major changes to your Trust or Will that changes what you leave to heirs, or disinherit someone, discuss it with your family first. As we get older in life our judgement often becomes impaired. What you may think you want to do to square things may not be what the rest of your family wants you to do. You may not have the unrestricted right to do something. If you embark on a new inheritance strategy without getting your family’s understanding and buy-in you may just be guaranteeing everyone will end up squabbling in court after you are gone.
  • Seek tax, financial, and legal advice before deciding to sell or gift any major assets. Often times we try to simplify life by selling off things late in life, which can be a good thing. But you should be aware of the tax and financial implications of doing so beforehand, not after you’ve incurred a huge tax that might have been avoided.
  • Consolidate your investments. If you have securities held in your name and you get dividend checks sent directly to you, transfer these securities into a brokerage account somewhere so that your executor or trust administrator doesn’t have to deal with a bunch of different transfer agents. You won’t have checks to lose or have to go to the bank to make deposits anymore, and they will all be in one place when you or someone else are trying to determine what you own.
  • Throw out the trash while you are still physically able. Get rid of all the stuff we tend to collect over a lifetime that your heirs will only have to throw out anyway. All those tax returns (older than four years) and receipts, books and articles you wanted to read again someday, clothes you will never wear, check records and bank statements, your old school transcripts and work awards…you get the drift. It was important to you once, but if it will end up in the dumpster or at Goodwill after you’re gone, why wait until it’s overwhelming and make someone else do it?
  • Gift the things to your heirs that you would like to see them do something with. If you have money or heirlooms that your heirs would really appreciate, why not pass it to them now while you are around to see the joy that it brings? (but see #3 above)
  • Listen to your doctors. They probably know medicine better than you. If they tell you to stop eating something or to take a medication, do it. In this world of managed care you have to be vigilant about getting the quality care you deserve, but that doesn’t mean you can ignore what the doctors tell you if you don’t like what they say.
  • Recognize and accept that at some point you should not drive. Causing a wreck where you are hurt might be acceptable to you, but what if someone else is hurt? If you are good with your smart phone, Uber and Lyft are cheap. If you get a friend or relative to drive you around that counts as quality time.
  • Lastly, keep a good outlook. Getting old isn’t for the timid. Parts wear out. You will develop creaks and pains and issues you only made fun of when you were a kid. But there will always be a lot of reasons to get up in the morning.

Read more tax articles from Paul’s tax blog