“It’s my intent, To live on a little deeper… Havin’ my last will and testament.”
— from “Last Will and Testament,” as performed by J. J. Cale and Eric Clapton
Last week, The Economist’s news summary included an interesting twist regarding an Australian court ruling. A gentleman there initiated a text on his mobile phone regarding the disbursement of his assets. The man subsequently died and left all his worldly possessions to his brother and nephew and nothing to his wife. The text also noted where he wanted his ashes to be spread and said he left cash behind the television.
Even though it was just an unsent draft, the court ruled that the text actually constituted the gentleman’s last will and testament. Don’t know about you, but I’d hate to discover that my spouse left me out of his will by virtue of an unsent text message.
Remember when it was determined our signature on a fax is binding? As technology evolves, it is impacting every aspect of our lives, including estate planning. Just to be on the safe side, though, I think it would behoove us all to execute our estate plans in more formal fashion.
There are lots of reasons people delay estate planning. Many folks are stymied by the very term, as if it’s an activity only for those who own huge homes with expansive lawns. Perhaps if they called it a family succession plan more people might take the time to attend to this important part of overall financial planning. Others are squeamish about addressing their demise, even though we all know that while we don’t know when it will happen, it cannot be avoided. Lastly, some business owners find that hashing out the details of inheritance, especially where multiple children are involved, is so cumbersome and potentially emotional that they’d rather avoid the task altogether.
Some folks focus solely on tax avoidance with their estate plans. And while this is hugely important, the main focus of estate planning should be to outline plans for the stewardship and administration of assets for future generations. How taxes fit into that process is important, but doesn’t constitute the only consideration.
You know the phrase that you hear in the movies when an attorney reads a will to an attentive family? It’s something like, “I, (name inserted here), being of sound mind and body, do hereby bequeath all my assets …” As the incidence of dementia increases and impacts more people in our society, the keeper of family finances can sometimes be subject to the loss of mental acuity. Thus, it becomes ever more important for us to document our estate planning decisions while we’re in reasonably good health and then to update them periodically.
Margaret R. McDowell, ChFC®, AIF®, author of the syndicated economic column “Arbor Outlook,” is the founder of Arbor Wealth Management, LLC, (850.608.6121 – www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.