I learned so much about financial planning from my grandmother. She was able to take all of the complexity out of financial planning and boil it down to its essential elements. By making things like college planning, taxes, or investment planning as simple as it needed to be, she was able to spend most of her time doing the things she loved. This article is about her approach to estate planning.
My grandparents were World War II vets. Although my grandmother got out after the war, she stayed a military spouse throughout the rest of my grandfather’s military career. They settled back down in the house that my grandfather grew up in, back home in Florida. A few years later, my grandfather passed away in his sleep. That was in 1983.
My grandmother ended up living another 29 years after my grandfather passed. Although she didn’t know that she was going to live that much longer, she was in her early sixties. Unlike my grandfather, who smoked and drank a little more than he should have, my grandmother was a very active, healthy woman. She knew that she had to be prudent, efficient, and knowledgeable about her finances.
Part of that included her estate plan. When my grandmother died in 2012, her estate plan had been in place for the better part of 20 years. She had updated it occasionally, but not a whole lot changed over that time. During the last 8-10 years of her life, she developed dementia, which turned into full-blown Alzheimer’s.
Toward the end, she didn’t recognize anyone, even my mother, who took care of her 24/7. All the mirrors in the house had been covered so she wouldn’t see her face and wonder who that old woman was in the mirror. She couldn’t eat or talk. It was tragic. But it could have been so much worse had her estate plan not been in place.
Instead, dealing with her estate was almost a relief for everyone. My grandmother was in a better place, and everything went as it was supposed to.
Now that time has passed, I have been able to think about why this happened. I’ve come up with some observations on why this was so much easier than a lot of other estates I’ve seen.
Estate Planning Observation Number One: Communication
My grandmother had two children: my mother, and my uncle. They were co-executors of the estate, and everything was split, 50/50. Simple enough.
Although my grandmother always had a will, living trust, and powers of attorney, she would update them as needed. It wasn’t more than a handful of times (perhaps once per decade). These changes were relatively minor tweaks, but she always took the time to make sure everyone involved understood.
Even me. I was a grandson, and there was a stipulation in her will outlining my share of the inheritance. Although I didn’t have an official role in administering the estate (my uncle was her go-to person for that), she would always show me the revisions and ask me if they were fair.
The last update she made was right around the time she truly believed she was developing dementia. I remember this specifically because my grandmother had always been known for being pretty sharp. One day, when I came home on military leave, she told me that we needed to talk. She told me to look at some changes she wanted to make to her estate planning documents. I did as she asked, and she told me:
“I think I’m going senile. But nobody believes me.”
I told her, “I believe you.”
Grandmother: “Do you think I need to make any changes?”
Me: “Do you think this is fair to everyone?”
Me: “Is there anything you might want to change in the future?”
Her: “No. I think this is how it should be.”
Me: “Then make the changes you want to and don’t ever worry about it again.”
And my grandmother did exactly that. She and I never talked about her estate planning documents after that. And everything remained as we discussed until she passed.
Estate Planning Observation Number Two: Keep your plan up to date.
This goes in line with the first observation. Not only would my grandmother talk about her estate with my uncle, mother, and me; she would also take the time to keep things up to date. Not every year -- she might have updated her will 3 or 4 times in the 28 years after my grandfather died. But I know that her estate plan looked a lot different in 2010 than it did in 1985.
If you’re communicating your intentions with your heirs and trusted advisors, that’s great. However, you also need to make sure your plan is updated -- not just the will, but everything that goes along with it. This includes all the estate planning documents, like a power of attorney or health care surrogate designation. It also includes keeping account designations up to date for insurance policies and retirement accounts.
Finally, it includes a plan to ensure everyone knows about all the other stuff. For example, how do your social media accounts get handled after you pass? If you’ve got $10,000 stashed in a safe deposit box somewhere, do the right people know about it? Where do you keep copies of your will and other documents? All this needs to be kept up to date and communicated with the right people.
In the military, I’ve seen many instances where a Sailor will get divorced, then dies after getting remarried. Even if they changed their will, they might not have taken the time to update their insurance beneficiary. As a result, I’ve seen a lot of cases where an ex-wife will receive all the Sailor’s insurance benefits. Meanwhile, the new wife, is left with a lot less than she should have gotten.
Keeping everything up to date really matters.
Estate Planning Observation Number Three: Simple finances, simple estate planning.
My grandmother kept her finances very simple. One checking account. One savings account. A credit card. All of her investments were in one place. She never believed in debt. She lived on less than her pension and Social Security.
None of this meant that she didn’t have a life. In fact, she did a lot of really cool stuff (for her, anyway). As a teenage boy, I didn’t see a lot of fun in her church activities, volunteering, or gardening. But it was what she wanted to do, and she never let the grass grow under her feet.
When it came time to figure out her estate, it was simple: every account had beneficiary designations. She also had a revocable trust with a pour over will. This means that when my grandmother passed, everything that didn’t have a designation or wasn’t already in the trust was ‘poured over’ into the trust. From there, the executors (my mother and uncle) divvied everything according to the will. Basically, each of the grandchildren got a certain amount of money, and they split whatever was left over.
While it was an emotional time, it was a lot simpler than many other situations where
Estate Planning Observation Number Four: Paying for competent estate planning isn’t a waste. It’s an investment.
My grandmother kept her own counsel. In other words, she didn’t delegate a whole lot. She made very sound decisions based upon her own philosophy.
But that doesn’t mean she didn’t hire experts. If she needed yard work, she sought out good, reputable folks who were willing to do an honest day’s work for honest pay. If she needed help with her investments, she had a person, but she had very strict investing principles and made it clear that she wasn’t going to get talked into whatever he had to sell. As long as her "investments guy" (a broker/dealer) made recommendations that were in line with her expectations, she went along with him.
When it came to estate planning, she hired a good estate attorney. Not someone who promised to do a will and trust for $300. She hired someone who was willing to take the time to walk her through all the options, educate her on estate planning, then draft the paperwork that reflected her wishes. When she passed, her attorney took the time to walk the rest of us through her asset liquidation and did the necessary probate work with our local courthouse.
In keeping with the spirit of “You get what you pay for,” my grandmother ensured that she was getting competent help with her estate planning. If she paid a few hundred dollars more than the guy down the street charged, that was okay with her. In her mind, a solid plan was an investment that paid for itself many times over.
That’s it. I wish I could tell you it was much more difficult than that. Unfortunately, it’s not.
It turns out that when you keep things simple, like my grandmother did, there’s not a whole lot more to write about. Talk about your intentions with the people you care about, keep your plan updated, keep your finances simple, and pay a good estate attorney to draft documents and to help your heirs through the process.
What do you think? If you have questions about your finances and would like to schedule a complimentary 30 minute phone call, we’d be more than happy to see how we can help! Otherwise, if you liked this article, please share it with a friend or post it to your favorite social media account.