It’s Not about the Money

(But It Is about the Money)

Are you sitting down?

I’m afraid I have some rather shocking news for you.

Take a deep breath. Ready? Here goes: when you die, your stuff is not going with you.

None of it.

Not your house. Not your car. Not your bank accounts. Not your 401(k). Not your cabin by the lake. Not your boat on the lake. Not the artwork on your walls. Not your kids’ memorabilia you keep in boxes. Not your fishing rods. And not your Italian bicycle.

Probably not even your signed Babe Ruth baseball.

I’m serious. Lots of people over the millennia have tried to take stuff with them. Vikings piled stuff on funeral boats and set them on fire. Pharaohs stacked stuff in pyramids. As far as we know, these efforts didn’t work out.

But here’s the thing: all your stuff will not just disappear, either.

Your stuff will go to someone, somewhere, somehow. You may not have made a plan for where it will go, but someone will have a plan—guaranteed. The state you live in will step forward with its specific laws. An ex-spouse will step in with a lawyer.

Even more important than what happens to your stuff is what happens to your minor children and/or dependents who are disabled. If you don’t decide who will assume responsibility for them in the event of your death, someone else will.

Someone other than you will stand up in a courtroom, and a judge who you don’t know will determine if and how your assets will help the next generation. A set of laws you have likely never read will decide whether your surviving loved ones end up fighting in that courtroom over everything from custody of your children and dependents, to control of your bank accounts and possession of your Italian bicycle.

No Plan? Maybe You’ll Get Lucky

Now it’s possible that everything will go just fine without you making a plan. It may be that your state’s laws and processes just happen to align with your wishes and the exact configuration of your family at the time you pass on. It may be that everyone involved will approach the situation with the right attitude, the right knowledge, and the time to move your stuff from point A to point B. Maybe they will move it just the way you’d have liked it to move. But believe me: as a living trust and estate planning attorney with a big practice, I deal with this every day. Without a plan, everything rarely goes “just fine.”

The odds are high that a lengthy legal process will ensue and damage your surviving family members’ relationships.

The odds are very high.

Time and again surviving children tell me that the last memory, sometimes the lasting memory they have of their parent is “all that crap we had to go through when Dad died.”

Sorry, take a second deep breath, because there’s more.

I’m also nearly certain that another dramatic event will happen long before you die. If you’re like 80 percent of Americans, you will pass through a period of incapacity before you are gone.

If you have a stroke tomorrow and cannot handle your own affairs, someone will make medical decisions for you. Someone will take control of your portfolio. Someone will take over the maintenance of your house. Someone will make choices for your minor children and dependents, while you are lying in a hospital or nursing home. And yes, someone will have to pay for that nursing home.

Maybe you think you know who that responsible person will be, even if you don’t write your wishes down. But suppose your spouse dies before you, or is incapacitated. Suppose your trusted eldest daughter has decided to move to a commune in India. Suppose your kids can’t agree on who will handle all those heavy tasks and temptations. Suppose they get into a fight about how to proceed with your medical care. What if they have screaming arguments about whether to try that risky procedure or withhold care? Suppose the state steps in. Or social workers. Or the courts.

Okay, you can exhale now. I’m getting to the good news.

And seriously, there’s plenty of good news.

You see, unlike our ancestors over the millennia, and unlike people in less-free countries—that is, most countries—Americans can exercise amazing control over what happens when they die or become incapacitated.

In France, for example, they follow a tradition of usufruct. Within that tradition, if you are married, the state basically forces you to give some of your marital property to your children when you die. You really have no option of not giving anything to your children, no matter what your current relationship with them may be.

In this great nation of ours, you will find surprising respect for the wishes of the deceased and incapacitated—as long as those wishes are recorded on the right documents, follow the local laws, assets are properly structured, and responsible people follow through on the plan.

We have a process to make this work that’s complex and imperfect, but probably better than any similar process in history.

The process works as long as you have an estate plan.

If you have a plan, you really can make things come out for the best—or at least, as nearly as possible to the way you would have wanted. Life is like that, and so, I’m telling you, is death.

What’s an estate plan?

An estate plan is a vital collection of legal documents that include a living trust, a will, durable powers of attorney for property and healthcare, a “HIPAA” authorization, a living will, deeds, beneficiary designations on life insurance, annuities, IRAs, 401(k)s, and sometimes more.

A real plan must be drafted by a lawyer, and it requires constant updating and revision. It’s not a downloadable, cookie-cutter document, and it’s not done once and forgotten.

No plan? We’re pretty much always talking major mess.

Trouble is, lots of Americans—actually most Americans—don’t want to hear the shocking news I just asked you to read. At some level, they just don’t believe it’s true. And as a result, they don’t exercise their rights and freedoms. They don’t make any plan of consequence. Indeed, 55 percent die without even a will. Then, when the truly inevitable happens, their lack of planning often causes genuine catastrophes in their families.

Arguments. Chaos. Life disruption. Loss of jobs by overwhelmed spouses, children, and other loved ones. Minors placed with the wrong relatives or in foster care. Years in courtrooms for the rich and poor alike.

Believe me, I see such catastrophes every week. I have plenty of stories about people who die without wills or trusts, or get very ill without setting up powers of attorney.

For now, however, let’s get back to that good news, because here’s the simple message of this book: If you avoid the usual big blunders that most Americans make in planning the succession of their estates, you will not just leave your assets to whom you want in the way you want to, but you will leave a legacy. The time of your passing or incapacity will be guided by common sense, fairness, logic, and your best intentions—instead of chaos, strife, and uncertainty. And you will know that you have been a genuine help to your loved ones as they move forward with their lives.

It can be done.

Let me explain the title of this Introduction: It’s Not about the Money (but It Is about the Money). I wanted to start with that phrase, because although our values and relationships are certainly more important than our money, the way we use and pass on money reflects our values, and can help embody our relationships, our loves, our accomplishments, our intentions, and our legacy. As adults, many of us have learned the following hard lesson:

Doing money right usually means doing a lot of other things right.

In fact, when I hear people say, “It’s not about the money,” alarm bells go off in my head. Somewhere along the line, I know it definitely will be about the money.

Is this a do-it-yourself estate planning book? No. I’ve written a short book on a complex subject, because I think it is literally impossible to teach you to do this yourself. Situations are too varied. The laws and priorities keep changing. The stakes are too high, and the pitfalls too large for you to avoid using an attorney to help with your estate plan. Period.

But this book will help you understand the big picture of estate planning and empower you to move forward with confidence. I want to get you past the denial and paralysis that plague most people approaching this subject. I want to help you pick the right attorney, and make sure he or she is covering all the bases. I want to...