Estate Planning to Succeed in 2010

The first decade of the 21st Century is over – and good riddance. Called by many as the “Lost Decade,” it was a time when we experienced terrorism of the most venal kind and an economic collapse that overshadowed even the Great Depression.

As we ushered in 2010, many of us made our typical and ephemeral New Year’s resolutions geared toward self-improvement. However, few of us probably took a critical look at our estate, financial and long-term care planning needs and goals. While such considerations are the proverbial 800 pound gorilla standing in the corner of the room, we choose either to consciously or subconsciously ignore them. The question is: Why? I ascribe three reasons which form the acronym “AMP”:

(1) Avoidance;

(2) Misinformation and

(3) Procrastination.

Avoidance: Many people who are relatively young, healthy and financially fit are generally loathe to contemplate the day when they will no longer be so described or may no longer be living the good life. Some may not even be able to discuss these issues while others may equate estate and long-term care planning with an acknowledgment of their potential incapacity or mortality. Notwithstanding the reason for avoidance, the simple truth is this: Failing to plan is planning to fail.

Misinformation: We are typically inundated with mailings from financial institutions, advisors and attorneys all asking if we have completed or updated our estate planning. We hear information “on the street” or in coffee shops and salons about estate planning and Medicaid eligibility and a lot of it simply isn’t true or accurate. It becomes difficult or even impossible to sort fact from fiction. We receive information from self-professed experts; one suggests that we proceed in one direction while another suggests an opposite approach. Do I need a will or a living trust? Should I invest in long-term care insurance or try to qualify for Medicaid? Should I convert my traditional IRA to a Roth IRA? What is one to do? Listen to the last “expert” who had your ear? As a result of being bombarded with conflicting estate and financial planning information and recommendations, many of us make the simple choice of doing absolutely nothing. Once again: Failing to plan is planning to fail.

Procrastination: Because considering one’s incapacity or mortality is generally distasteful, and because sorting fact from fiction is typically difficult, we tend to table the estate and long-term care planning discussions for another day . . . and then another day. The days turn into months and the months turn into years. By the time we are ready to consider our needs and engage in proper planning, we may be faced with a crisis situation. At that point we are engaged in the discussion not out of want, but due to necessity. In many cases, our condition is such that we have by our neglect abdicated the difficult and painful decisions to our loved ones, creating unwanted and unnecessary stress. Planning in a crisis situation severely limits or curtails the available options. And, for the third time: Failing to plan is planning to fail.

So, what is the cure for AMP? Plan to succeed. Commit in 2010 to entering the “ERA of the Estate Plan.” Amp up your estate plan by engaging in three activities which form the acronym “ERA”:

(1) Educate:

(2) Review and

(3) Act.

Educate: Commit yourself to becoming educated about estate, financial and long-term care planning. Attend a workshop or an initial meeting with an estate planning attorney to be introduced to critical issues and concepts. Think about your needs and goals and then articulate them to your attorney. Educate your attorney about yourself, your health, your family members and your assets so that an estate plan can be designed and customized to meet your unique needs and objectives. And, finally, educate your friends and family members about the importance of engaging in the same process.

Review: Review your income, assets, investment strategies and retirement goals with your financial advisor. If you have estate planning documents, review them with an estate planning attorney to make sure they still meet your needs and objectives and reflect changes in your health, family, finances and the estate tax and Medicaid rules and regulations. You wouldn’t neglect your health or forego routine maintenance on your car. Consider this your annual estate and financial planning check-up.

Act: If you have no estate, financial or long-term care plan in place, make an appointment with your trusted advisors now. Fight the urge to procrastinate and take steps to be proactive rather than reactive.

If you would like to succeed rather than fail, and start the ERA of planning, contact us now to attend a workshop or to schedule a complimentary consultation.