MONEY Aging

When Dementia Threatens a Family’s Finances

Grandfather at table of food
Getty Images

One in three adults will suffer from dementia. Here's how to achieve financial security — and a patient's dignity — when that happens.

My client sat across the table telling me about her late husband — first, his diagnosis of dementia, and then, his suicide a few years later.

On the night before he took his own life, she had finally gathered the strength to tell him he needed to turn their finances over to her. Larger than life when he was healthy, he had been a tremendous businessman. But the dementia had robbed him of sound decision-making, and she needed to protect what was left of their shrinking nest egg.

She asked me, “What should I have done?”

In the years since his death, she couldn’t help wondering whether that final financial conversation had been the tipping point in his waning will to live. It wasn’t her fault; she had supported him throughout his illness with an unmatched strength of conviction and marital devotion. It’s pointless to try to judge the effect of a particular conversation, because he had suffered for a decade. The disease had torn through their lives, leaving a series of wreckages: their relationships, his ability to handle even menial tasks, and — perhaps most painful — his self-esteem.

I told my client she had been in a no-win situation. She couldn’t risk her own future welfare by allowing her husband’s disease to squander all they had worked for. She was in her 60s, very healthy, and had a 100-year-old mother whose zest and longevity foretold of my client’s likely need to support herself for another 30-plus years. To protect herself and her husband from risky investments, unwise purchases and even fraud, my client needed to take over the financial reins. But how do you conduct this crucial conversation about control without robbing a dementia patient of his or her already-declining dignity? With the Alzheimer’s Association reporting one in three seniors in the United States contracts Alzheimer’s or dementia, it’s time we start talking about it.

Some advice:

Avoid a crisis. Don’t wait to have one huge conversation. Ideally, you would have a series of talks before anyone is diagnosed with dementia. As part of an overall estate plan, it’s important to discuss all family members’ wishes for the end of their lives and prepare them for the possibility of losing their independence. It may sound trite to say, “One day, Dad, we may take care of you the way you took care of us,” but laying that foundation ahead of time may soften the blow. It’s nice to think that we live on our own until the end, when we quietly pass in our sleep, but that isn’t our current reality. Medical advances have been successful in prolonging our lives, but not at guaranteeing our independence.

Having a big discussion that feels like a dementia patient is the subject of an intervention is stressful for all involved. Save the intervention-type conversations for true emergencies, and recognize the patient needs to feel safe and loved, not confronted.

Understand the backstory. Everyone brings a different money mindset to this conversation. Ask yourself, why is money important to this patient? Is it imperative to provide for the family? Is it a priority to give it away? Open the conversation by affirming the ways the patient has accomplished his financial objectives until this point.

Take into account any major financial experiences that may be coloring this particular conversation. Olivia Mellan, a psychotherapist specializing in money conflict resolution, points out that men and women can have different views of common financial decisions. If a wife wants to open her own bank account, for example, she may simply desire some independence. Her husband, however, may interpret her wishes as a lack of marital commitment. If a dementia patient has had this kind of conflict, structure your discussion to avoid triggering those old memories and feelings.

Pick your battles. Can the patient retain investment control over a $10,000 account? Is there room in the budget for a weekly allowance so he can continue making spending decisions? Both tactics can distract the patient from participating in larger financial decisions.

Steven A. Starnes, an adviser with Savant Capital Management, tells a story about his late grandmother, who passed away from Alzheimer’s. Out shopping with her daughter, she found a relatively expensive necklace she just had to have. The family had created room in the budget for one-time splurges that would bring joy to her remaining years. As long as the purchase didn’t thwart the family’s long-term financial plans, it was okay. So Starnes’ grandmother came home with a new necklace that drew her focus away from the other losses she was experiencing.

Utilize helpful resources. Some financial advisers are a tremendous help in facilitating these conversations. A person’s declining financial abilities are often the first sign of dementia, so advisers are well-positioned to help a family. Just having an outside party to ask the tough questions can ease the pressure. In fact, some advisers, including Starnes, specialize in clients with dementia.

A growing number of professionals specialize in different end-of-life issues. The National Association of Professional Geriatric Care Managers provides information about care management and a directory of professionals who can help clients attain their maximum functional potential

Another source to locate a professional is the Society of Certified Senior Advisors listing of certificants who have demonstrated expertise in a range of core competencies involving the aging process. Among those holding CSA accreditation are financial professionals, caregivers, gerontologists, and clergy.

To help a family prepare for a discussion of changing financial responsibilities, circulate the book Crucial Conversations, by Kerry Patterson. Another great resource is The Other Talk,by Tim Prosch, which specifically addresses end-of-life conversations between aging parents and adult children. Do some research on the best ways to communicate with dementia patients. It’s difficult work, but it is possible to absolve a dementia patient of financial responsibilities while helping him maintain his dignity.

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Candice McGarvey, CFP, is the Chief Story Changer of Her Dollars Financial Coaching. By working with women to increase their financial wellness, she brings clients through financial transitions. Via conversations that feel more like a coffee date than a meeting, her process improves a client’s financial strength and peace.

MONEY Estate Planning

Financially Independent Kids in the Age of Entitlement

spoiled rich kids
Getty Images—Getty Images

Some adult children never become financial grown-ups. That presents a danger to themselves and to their parents.

A few years ago, when I was meeting with a couple who were considering retirement, it became clear that the biggest hurdle that stood in their way was the continued dependency of their adult children. Even though the children were well into their forties, they were still consistently asking their parents for money. This was such a persistent issue that this couple had actually withdrawn money from their retirement plans to support their children.

Luckily, there was a pension to augment their retirement savings; otherwise they would have been forced to continue working. Both spouses were not in the best of health, and working well into their seventies did not sit well with them. I strongly encouraged them to delay retirement, wean their children off economic assistance, and save more while they could.

Looking back, they are in a much better position now, because they took these hard but necessary steps. As is often the case, we may risk losing business by giving advice that’s good but unpopular. However, the road less traveled is often better in the long run for our business and our clients.

Whether they are socialites or feel they are entitled to a never-ending string of handouts, some adult children never develop into “economic adults.” I have found over the years that those clients who consistently work to raise their children as independent, productive members of society often teach frugality, gratitude, and individual productivity. Many feel that one of the best ways to ruin their children is by giving them too much without letting them enjoy the fruits of their own labor.

Our clients want to protect their offspring from the dangers of inheriting too much, undisciplined spending, and today’s overly litigious society. Many financially independent adult children do not plan on inheriting any wealth from their parents. When and if they inherit a more substantial sum, they’re better prepared to handle it having been faithful with their own savings. I encourage our clients to take care of themselves, their church, and charities first. The most important things we can leave our children are values and skills that empower them to achieve independently. Paying for education, providing seed money to start a business, or anything encouraging financial responsibility can be beneficial.

Increasingly, we’re advising clients to utilize trusts and family foundations to ensure their wealth is spent most responsibly. These entities provide safeguards for adult children with protections from themselves and those who might be in a position to take advantage of them. My personal family trust and many of our client’s have provisions where children may withdraw funds for education, medical needs, and basic support. Additional funds are available to the extent they can provide for themselves.

How do we protect against future spouses, business partners, or litigious opportunists taking advantage of our adult children? Revocable trusts established today can become irrevocable trusts when one spouse passes away, protecting the survivor from financial vultures. Irrevocable asset protection trusts serve as another vehicle to protect client interests if threats are more immediate. For those donating significant amounts to church or favorite causes, charitable trusts can provide substantial tax savings.

The Spanish have a saying: “Father merchant, son gentleman, grandson beggar.” We in America express the same thought as, “Shirtsleeves to shirtsleeves in three generations.” Only by understanding the root cause of the problem can we work to develop a plan to thwart this common malady.

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Joe Franklin, CFP, is founder and president of Franklin Wealth Management, a registered investment advisory firm in Hixson, Tenn. A 20-year industry veteran, he also writes the Franklin Backstage Pass blog. Franklin Wealth Management provides innovative advice for business-minded professionals, with a focus on intergenerational planning.

MONEY Estate Planning

The Perils of Leaving an IRA to Your Kid

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Cindy Prins—Getty Images/Flickr RM

People with the best of intentions can make life difficult for their heirs.

Naming a child as the beneficiary to important assets like your IRA may seem like a no-brainer. Unfortunately, doing that can create several problems.

I once worked with a client who left his IRA to his daughter. When he put her on his beneficiary form, he was fairly young and healthy, so he had little concern about his decision.

When he passed away, however, his daughter was only five years old — a minor unable to inherit the account. The father had the intention of leaving his daughter roughly $40,000 to help fund an important expense or investment. Instead, a judge had to step in and appoint a custodian to manage the asset until the child reached legal age. Even though the child will eventually receive these funds, without any specific guidelines set, the young daughter could potentially make a poor investment decision much different from what her father had envisioned.

I see this problem often with single parents who, because they don’t have a spouse who might receive their assets, make their children their direct heirs. While these clients have the best intentions, I have come to realize that they often don’t understand the consequences of their actions: The courts may delay, interfere or misinterpret their true intentions if a beneficiary is a minor.

The first option I offer to those looking to leave assets to a minor is through a Uniform Transfers to Minors Act account. An UTMA account gives the owner — often the parent, though it could be a grandparent or someone else — control over selecting the custodian should the owner pass away before the child reaches the age of majority. Had my client done this, he could have avoided the involvement of the court-appointed custodian. This option, though, may not always be the best solution, since it fails to give the parent control of how the funds will be distributed.

The second option I offer to parents is to name a trust as a beneficiary. This option provides the most control of how the funds are managed and distributed – an option many parents find appealing because it could prevent the child from making a poor investment, incurring a major tax liability, or quickly running through the money.

A trust can also allow or even require distributions to be stretched over the beneficiary’s lifetime, maximizing the tax-deferred or tax-free growth for the greatest duration and overall lifetime payout for the heirs.

Using separate trusts for each child can allow each heir to use his or her own age for calculating required minimum distributions. That can make a significant difference if there is a large age variance between them. For example, let’s say a grandmother passes away and leaves her IRA to two children, ages 53 and 48, and two grandchildren, ages 12 and 2. If she has created a trust for each heir, then they can each use their own age from the IRS’s life expectancy table to calculate their required minimum distributions. If she has failed to do this, they will all be forced to calculate RMDs based on the oldest heir, age 53 – greatly shortening the stretch period of the tax benefits for the young children.

For parents with more than one child who do not want to incur the legal costs of setting up a trust but want to maximize the stretch benefits of their retirement accounts have another option: splitting the IRA into multiple IRA accounts, creating one to be left to each heir. This will not provide the control over the custodian or distribution, but will allow each heir to use his or her own age in calculating the RMDs of an inherited account.

As advisers, it’s our job not only to help our clients prepare for retirement, but also to make sure their money is taken care of after they die. By helping them properly plan for their beneficiaries, advisers can do just that.

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Herb White, CFP, is the founder and president of Life Certain Wealth Strategies, an independent financial and retirement planning firm in Greenwood Village, Colo., dedicated to helping individuals achieve their financial goals for retirement. A certified financial planner with more than 15 years of experience in the financial services industry, White is also life and health insurance licensed. He is a member of the Financial Planning Association and the National Association of Insurance and Financial Advisors.

MONEY Financial Planning

7 Pre-New Year’s Financial Moves That Will Make You Richer in 2015

champagne bottle with $100 bill wrapped around it
iStock

Before you pop the champagne this December 31, get your financial house in order.

Didn’t 2014 just start? At least that’s the way it feels to me. Well, regardless of how things seem, the reality is the year is just about over. But that doesn’t mean you can’t make a big impact on your financial future before the big ball drops in Times Square.

You can still achieve some very important financial goals before Dec. 31.

1. Make a Plan to Get Out of Debt

You may not be able to get out of debt between now and the end of the holiday season but you can set yourself up now so you’ll be debt-free very soon. Of course the first step is to watch your spending over the holidays. Don’t overdo it. That only makes it harder to solve your debt situation.

Next, create a system to eliminate debt by first consolidating and refinancing to the lowest possible interest rate. Once you do that, put all the muscle (and money) you can towards paying off the highest cost debt you have and make the minimum payments towards other credit card balances. As you pay off your most expensive debt continue to keep your debt payments as high as possible towards the next highest-cost debt. Repeat this process until you are debt-free. Believe me it won’t take that long. But you won’t ever be done if you don’t start. Why not begin the process of lowering your cost of credit card debt today? (You can use this free calculator to see how long it will take to pay off your credit card debt. You can also check your credit scores for free to see how your debt is affecting your credit standing.)

2. Track Your Spending

Even if you aren’t in debt, it’s important to know what you spend on average each month. Once you know where the money is going, you can decide if you are spending it as wisely as possible or if you need to make some changes.

Many people think they know how much they spend on average but most of us underestimate our monthly nut by 20-30%. You can use a program, a spreadsheet or simply look at your bank statements and track your total withdrawals for the month. It doesn’t matter how you do it. But if you aren’t tracking your spending, I recommend you start doing so now.

What’s great about starting to track spending before the new year is that you get used to your system and if you use a program or spreadsheet, it will also simplify your tax reporting for next year. This is especially helpful if you do your own taxes.

3. Review Your Estate Plan

Things usually slow down at work during the holidays. That gives you time to get to important items you may have been putting off. Estate planning is one of those items that people often procrastinate on.

I’m not asking you to get your will or trust done by Dec. 31 (although you could). But at the very least do two things:

  1. Educate yourself about the difference between wills and trusts.
  2. Find a good estate planning attorney or legal service and start the process.

My parents completely ignored this topic. When they both died young and unexpectedly, it made it monumentally more painful, difficult and scary for my siblings and I. Don’t take chances. You can and should start taking care of your estate planning now.

4. Review Your Life Insurance

As long as we’re talking about estate planning, we might as well dust off your old life insurance policies and give them the old once over. Some people have outdated and overly expensive life insurance they no longer need. Others walk around woefully under-insured, exposing their loved ones to great risk that is completely avoidable.

Pull out your old policies today. Do you still need those policies? If not, cancel them. If you do need insurance, start comparison shopping to make sure you have the right coverage at the right price.

5. Start Investing

If you’ve been on the fence about investing it’s time to stop thinking and start doing. If you don’t know how to get started, there are plenty of great resources on the Web. You need to understand the basis, of course, but you don’t need a Ph.D. in economics before you leave the starting gate. Once you read up on the basics of investing, be prepared to start slow and learn as you go. You will be fine.

And remember: You don’t need a pile of dough in order to start investing. If you are a DIY investor, there are plenty of good online brokers who will open an account for as little as $500. Can you think of a good reason to wait until next year to start investing? I can’t either. Let’s go.

6. Maximize Your Retirement Contributions

Before year-end, make sure you have maximized allowable contributions to your retirement plan at work. Unless you are in debt, you want to take advantage of employer matching if at all possible. Even if there is no matching program at work, try to maximize your plan contributions. This will give you the benefit of tax deferral and a forced savings plan.

Call your HR department today to find out if you can bump up your retirement plan contributions for the year.

7. Get in Front of Your Finances

You have an amazing opportunity right now. Make sure you are on top of your financial game now, next year and beyond. Take out a calendar right now and schedule when you are going to begin and follow through on the items on this list.

Look at your calendar for the next seven days. When are you going to:

  1. Inquire about refinancing your debt?
  2. Set up your spending tracking system?
  3. Start asking for estate planner referrals?
  4. Review your life insurance?
  5. Set up your investment account?
  6. Call HR and make sure to bump up your retirement contributions to max out for the year?

Taken all together, the list above might seem overwhelming. But if you do one task each day, you can really change your financial life this week. Each task above will take you between 15 minutes to three hours to complete. Are you going to do one item each day this week? How will you feel once you’ve begun? Or are you going to wait until “after the holidays”?

More from Credit.com

This article originally appeared on Credit.com.

MONEY Financial Planning

How Families Can Talk About Money Over Thanksgiving

Family Thanksgiving dinner
Lisa Peardon—Getty Images

Holiday get-togethers are a great time for extended family members to discuss topics like estate planning and eldercare. Here's how to get started.

While most Americans are focused on turkey dinners and Black Friday sales, some financial advisers look to Thanksgiving as a good time for families to bond in an unlikely way: by talking about money.

The holiday spirit and together-time can make it easier for families to discuss important financial matters such as parents’ wills, how family money is managed, retirement plans, charity and eldercare issues, advisers say.

While most parents and adult children believe these discussions are important, few actually have them, according to a study conducted last spring by Fidelity Investments. Family members may avoid broaching these sensitive subjects for fear of offending each other.

That is where advisers can shine.

“When you help different generations communicate and cooperate on topics that may keep them up at night, it bonds them as a family,” says Doug Liptak, an Atlanta-based adviser who facilitates family meetings for his clients. It can also help the adviser gain the next generation’s trust.

Advisers can encourage their clients to call family meetings. They can also offer to facilitate those meetings or suggest useful tips to families that would rather meet privately.

Talking Turkey

Family meetings should not be held over the holiday table after everyone has had a few drinks, but at another convenient time.

“That may mean in the living room the next afternoon, over dinner at a fun restaurant, or at a ski lodge,” says Morristown, N.J.-based adviser Stewart Massey, who has vacationed with clients’ families to help them hold such mini-summits.

It is critical to have an agenda “and be as transparent as possible,” he says. Discussion points should be written out and distributed to family members a few weeks ahead to avoid surprises. Massey also suggests asking clients which topics are taboo.

Liptak likes to meet one-on-one with family members before the meeting. If you can get to know the personalities and viewpoints of each family member and make everyone feel included and understood, you will be more effective, he says.

“You might have two siblings who are terrible with or ambivalent about money, while the youngest is financially savvy, but you can’t give one person more say,” says Liptak.

It also helps to get everyone motivated if the adviser brings in the client’s children or other family members ahead of time to teach them about money management topics, like how to invest, says Karen Ramsey, founder of RamseyInvesting.com, a Web-based advisory service.

Sometimes the clients are the adult children who are afraid to ask how the parents are set up financially or where documents are, she says.

Ramsey says advisers can help by letting clients and their families know that a little discomfort may come with the territory. She will say, and encourages her clients to say: “There’s something we need to talk about and we’ll all be a little uncomfortable, but it’s okay.”

The adviser can kick off a family meeting by asking leading questions, such as “What one thing would you like to accomplish as a family in 2015?” says Liptak. Then the adviser can take notes and continue to facilitate the discussion by making sure everyone gets heard and pulling out prepared charts and data when necessary.

Massey suggests families build some fun around the meetings. His clients often schedule them around the holidays and in the summer, often tucked into a vacation or weekend retreat. It is a good practice to have them regularly, like board meetings, he says.

And if the family has never had a meeting before?

“Don’t start with the heavy stuff,” says Liptak. “It’s a good time to focus on giving and generosity, like charities the family can contribute to.

“You can collaborate on an agenda for later for the bigger issues.”

MONEY Ask the Expert

Here’s a Smart Way To Boost Your Tax-Free Retirement Savings

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Robert A. Di Ieso, Jr.

Q: I am maxing out my 401(k). I understand there’s a new way to make after-tax contributions to a Roth IRA. How does that work?

A: You can thank the IRS for what is essentially a huge tax break for higher-income retirement savers, especially folks like yourself who are already maxing out contributions to tax-sheltered retirement plans.

A recent ruling by the IRS allows eligible workers to easily move after-tax contributions from their 401(k) or 403(b) plan to Roth IRAs when they exit their company plan. “With this new ruling, retirement savers are getting a huge increase in their ability contribute to a Roth IRA,” says Brian Holmes, president and CEO of investment advisory firm Signature Estate and Investment Advisors.

The Roth is a valuable income stream in retirement because contributions are after-tax, which means you don’t owe Uncle Sam anything on the money you withdraw. Unlike traditional IRAs which require you to start withdrawing money once you turn 70 ½, Roths have no mandatory distribution requirements, so your investments can continue to grow tax-free. And if you need to take a chunk out for a sudden big expense, such as medical bills, the withdrawal won’t bump you up into a higher tax bracket.

For high-income earners, the IRS ruling is especially good news. Singles with an adjusted gross income of $129,000 or more can’t directly contribute to a Roth IRA; for married couples, the income cap is $191,000. If you are are eligible to contribute to a Roth IRA, you can’t contribute more than $5,500 this year or next ($6,500 for people over 50). The IRS does allow people to convert traditional IRAs to Roth IRAs but you must pay income tax on your gains.

Now, with this new IRS ruling, you can put a lot more into a Roth by diverting your 401(k) assets into one. The annual limit on pre-tax contributions to 401(k) plans is $17,500 and $23,000 for people over 50; those limits rise to $18,000 and $24,000 next year. Including your pre-tax and post-tax contributions, as well as pre-tax employer matches, the total amount a worker can save in 401(k) and 403(b) plans is $52,000 and $57,500 for those 50 and older. (That amount will rise to $53,000 and $59,000 respectively in 2015.) When you leave your employer, you can separate the after-tax money and send it directly to a Roth, which can boost your tax-free savings by tens of thousands of dollars.

To take advantage of the new rule, your employer plan must allow after-tax contributions to your 401(k). About 53% of 401(k) plans allow both pre-tax and after- tax contributions, according to Rick Meigs, president of the 401(k) Help Center. You must also first max out your pre-tax contributions. The transfer to a Roth must be done at the same time you roll your existing 401(k)’s pre-tax savings into a traditional IRA.

The ability to put away more in a Roth is also good for people who want to leave money to heirs. Inherited Roth IRAs are free of tax, and because they don’t have taxable minimum required distributions, they can give your heirs decades of tax-free growth. “It’s absolutely the best asset to die with if you want to leave money behind,” says Holmes.

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com.

Read next: 4 Disastrous Retirement Mistakes and How to Avoid Them

MONEY Savings

How Blended Families Can Overcome Their Savings Obstacles

THE BRADY BUNCH
Unlike TV's "The Brady Bunch," real-life blended families often face big financial challenges. Courtesy Everett Collection

Remarrying brings special savings hurdles and leaves blended families further behind, new research shows.

The nuclear family went out of fashion 40 years ago, and what has replaced it is a far cry from TV’s blissfully blended Brady Bunch. Modern families include more same-sex, single-parent and multi-generational make-ups—and, new research shows, these households have special savings obstacles.

Today, just 19% of U.S. households are married heterosexual couples with young children vs. 40% in 1970, according to Census Bureau data. The rise of non-traditional families is reshaping household economics and, it seems, deepening the nation’s savings crisis.

Blended families, where parents have remarried with young children, are the biggest segment of the new-look household. About 75% of divorced people remarry. In roughly 43% of all marriages it is the second time around for at least one member of the couple, and 65% of remarriages involve children from a previous marriage. In such families, the average level of savings is $158,600, vs. $264,300 for traditional families, according to a new Love Family Money study from Allianz.

Only 46% of blended families believe they are on track towards their financial goals vs. 60% of traditional households. Some 55% of blended families live paycheck to paycheck vs. 41% of traditional families; and 30% of blended families say they are not saving any money vs. 20% of traditional families.

Behind this struggle, in many cases, is the financial stress of a broken household, Allianz found. Parents in blended families are more likely to say that they or their partner brought financial baggage to the marriage, and a third cite insufficient monetary support from their ex as a major problem keeping them from saving. They often find it difficult to merge their financial resources and plans, which means they tend to wind up with multiple, and frequently competing, goals within the household.

Some 35% say they and their partner have different financial priorities that are difficult to navigate. They are almost twice as likely to feel less aligned as a family than those in a traditional household. Yet there is some good news. Perhaps because they have a hard time planning as a unit, blended families are more likely to talk about money and take steps to teach their children to budget and save, Allianz found.

How can blended families overcome their struggles? With the rise of non-traditional households more financial firms are weighing in. It’s not enough to talk to the kids about money. Couples need to talk to each other and develop mutual goals and a plan for getting there. Agree on a fair distribution of responsibility. To get on the right path to your financial goals, start is by finding ways to trim your major expenses, then make a budget that leaves room for saving. If you can’t free up much cash to put away now, start small and increase that amount with future raises. It’s also important to take a careful look at wills and legacy planning, since you want to protect your family financially as long as possible.

More on marriage and money:

Retirement makeover: 4 kids, 2 jobs and no time to plan

7 ways to stop fighting about money and grow richer, together

Common money problems; uncommonly smart solutions

MONEY Ask the Expert

How To Pick a Pro to Manage Your Money When You’re Gone

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Robert A. Di Ieso, Jr.

Q: Are there professional administrator services for private wills? I’m single with no family or appropriate friends. – Paul, Calif.

A: Everyone needs a person or institution to act as executor and administer the estate though the probate process.

Because your executor will be in charge of collecting the estate’s assets, inventorying the property, paying claims against the estate (including taxes), and distributing assets to beneficiaries, you want to give the job to someone who is financially responsible and trustworthy.

That could be someone you know, say a relative or close friend, but it can also be an institution, or what you referred to as a professional will administrator.

Because of the complexity involved, many individual executors have to hire professionals to help. So even if you do have someone close to you take on the role, having a reliable and impartial professional as backup would be smart.

How to find the right pro

You could name your lawyer, accountant, or financial adviser as your executor, but Greg Sellers, a certified public accountant and president of the National Association of Estate Planners and Councils, warns against it, no matter how good a working relationship you already have.

“If your executor is also the one drafting your estate planning documents, there is the opportunity for them to do some self-dealing,” says Sellers. “While they may be legally bound to carry out your wishes, it presents a chance for conflicting interests. They could have undue influence on the documents, could charge higher than normal fees.” And acting as an executor may not be in the normal scope of what your accountant and financial adviser do.

Sellers recommends using a corporate trust company, either one affiliated with a financial institution like your bank or full-service brokerage, or an independent trust company. These companies have teams that manage estates full time. You don’t need a trust to use a trust company; they take on jobs just handling will administration.

What a pro will charge

Of course, hiring a professional will mean paying a fee (leaving a little less for your heirs). Some states set maximums that an executor can charge, but Sellers says that except in rare circumstances, executor fees should not go above 5% of the value of the estate.

The fee will likely land on the high end of the scale if your estate has lots of moving parts, such as a small business, personal property that needs to be sold, or investment accounts in more than one place. The total value of your assets matters too: the larger the estate, the smaller the percentage a professional executor will deduct.

This one-time fee will be paid from your estate after your death and is typically non-negotiable, Sellers says. While companies are upfront about the likely fees, they will not settle on an amount until they find out exactly what being executor involves, which can’t be known until your death.

Once you’ve settled on a company to be you executor, Sellers recommends letting it know and sending a copy of your will (though it isn’t necessary—you can simply note who you picked in your will).

Any company has the right to reject the job, which is why Sellers recommends naming a backup. If both your first and second choices reject the job, the probate court will assign an executor.

TIME Retirement

The Last Will and Testament of a Millennial

Portrait of woman writing letter at desk
Portrait of woman writing letter at desk, circa 1950 George Marks—Getty Images

It started with leaving my boyfriend my share of the rent — then things got complicated

I’m going to die, I reminded my boyfriend. My eventual death was something I’d been mentioning to lots of people, on Facebook and at engagement parties and at my high-school reunion.

It wasn’t that I thought death was going to come any time soon or in any special way, it’s just that, as they say on Game of Thrones, all men must die. So I was writing a will. I’d downloaded a template. I’d filled it out. I just hadn’t signed it yet, and in the mean time it had become my favorite topic of conversation: I’m going to die, we’re all going to die, I’m filling out paperwork about it, what’s new with you?

I asked my boyfriend: Is there anything else you want me to leave you? Besides my share of the rent. Besides the fish tank and the fish. Besides the coffee table, the pots and pans, the things that I call ours that are legally mine.

He said: Yes, but don’t tell me what it is. Make it something special.

That was a good answer, which wasn’t surprising. He takes deep questions seriously, and we’re well past the point where you have to act like it’s awkward to imply that your relationship will exist more than a few years in the future. So of course he had a good answer — but it was also a difficult one. What object that I owned could possibly say what I needed it to? There was, it must be said, not too much to choose from.

That’s a big part of the reason why young unmarried people with no children — that’s me: 28, legally unattached, childless — don’t usually bother with a will. Unlike a medical directive, which everyone should have, wills are something we can do without. The law of intestacy, the statutes that cover what happens when you die without said last testament, should take care of you just fine unless you’re very wealthy, whereas I fall into the It’s A Wonderful Life category: worth more dead than alive. I’m living comfortably, but my life-insurance policy is my most valuable asset.

Plus, most young people don’t need a will for an even more basic reason. Most of them don’t die.

However, even if death is a constant, life has changed. Last year, the U.S. Department of Health and Human Services released a report finding that nearly half of American women 15–44 cohabitated with a partner prior to marriage, using data from 2006–2010. That was a major increase from past studies, and by now the numbers may well be even higher. A cohabitating partner is entitled to nothing when the other dies. Marriage and children are also coming later in life, which means that people are acquiring more wealth before the laws regarding spousal inheritance kick in and before they have to choose a guardian for their child. So for people like me, without a will, there’s no way to say give this thing to my friend, give this thing to my brother, donate this thing to charity.

Hence, my will obsession. If all goes according to plan, it will be the umbrella that keeps the rain from falling, rendered obsolete within a few years. Marriage and children and my inevitable Powerball victory will change my priorities, and I’ll have to write a new one. But, as anyone who’s ever thought about a will must have realized, not everything goes according to plan.

***

Given changing social norms, estate planning ought to be a mainstay for millennial trend-watchers, except that there’s no way to know how many of us are actually out there thinking about the topic. There’s no way to know how many wills there are, period. Lawrence Friedman, a professor at Stanford Law and the author of Dead Hands: A Social History of Wills, Trusts and Inheritance Law estimates that — though there’s no way to track them — wills may be getting more common as popular awareness increases. A century ago, even counting the super-wealthy, he thinks probably half of the population gave it a thought. But, he says, the role of wills is also changing, as people live longer and are more likely to give their children money while everyone is still alive.

What’s not changing is that wills are fascinating to think about. Whether it’s the buzzy economist Thomas Piketty discussing the way inherited wealth affects society or a historian analyzing Shakespeare’s bequeathing his “second-best bed” to his wife, people who look at wills see more than what the dead person wants to do with his stuff. “I used to say to my class that what DNA is to the body this branch of law is to the social structure,” Friedman puts it.

Though it may seem obvious today that each adult has the right to leave his property to whomever he chooses, that privilege isn’t necessarily a foregone conclusion. Historically, there have been two competing theories behind inheritance law. One side holds that having a will is an inalienable right; the 17th century scholar Hugo Grotius wrote that, even though wills can be defined by law, they’re actually part of “the law of nature” that gives humans the ability to own things. John Locke agreed: if we believe property can be owned, it follows that we must believe that ownership includes the right to pass that property to whomever the owner chooses.

On the other hand, there’s just as long a tradition of the idea that wills are a right established by government and not by nature, because, not to put too fine a point on it, you can’t take it with you. If ownership ends at death, the state should get to decide how inheritance works, for example by saying that all property must always go to the eldest son, or by allowing children written out of a will to appeal to the state. Perhaps due to colonial American distaste for the trappings of aristocracy, the U.S. ended up with the former system — and Daniel Rubin, an estates lawyer and vice president of the Estate Planning Council of New York City, says it’s a right worth exercising. “For most young people, it’s not going to be relevant. But it’s a safeguard. People should appreciate the opportunity to do what they want with their stuff,” he says. “We’ve got a concept in the United States of free disposition of your wealth. You can choose to do with it whatever you want.”

Most wills written by young people won’t be read — except maybe by our future selves, nostalgic for the time when a $20 ukulele was a prized possession — and the ones that will be seen will be sad. If I die tomorrow, that will be what’s known as an unnatural order of death, the child going before the parents. Inheritance is not meant to flow upward. On that, tax law and the heart agree. It’s one area where millennials’ will-writing and older generations’ diverge: usually, estate law is a happier field than one might expect, something I’ve been trying to keep in mind. Rubin says he cannot imagine practicing any other area of law and finding it so rewarding.

“It’s never sad. Sometimes people are reluctant to deal with these issues. Perhaps they feel it brings bad luck although they rarely express it that way. It’s probably that they just don’t see the need to do it because they don’t think they’re going to die soon,” he says. “It’s almost uniform that even the most reluctant clients will sign their wills and then leave my office and feel great.”

***

Of course, it’s not as if “what if I die” is a rare thought, even for people under 30. Tom Sawyer took it to extremes; Freud thought we’re all itching to find out. People will be sad, we hope. Maybe we care about funeral arrangements, like the tragic Love, Actually character whose pallbearers march to the sound of the Bay City Rollers. Maybe we think we know what comes next; maybe we think nothing does. Maybe we’ve thought about who gets the heirlooms, the things that always carry a whiff of death about them.

What happens to the ordinary stuff that fills our homes is less likely to cross our minds. And lot of what we have, or at least what I have, is just crap on some level, mostly. That used starter-level Ikea, left behind by an old roommate who moved to California, isn’t exactly something I’d pass down. My most valuable possessions are mostly Bat Mitzvah gift jewelry. And my favorite possessions aren’t necessarily valuable. And if I did give these things away, how would they be received?

Once, I got a gift from a family friend days before she died. It was a beautiful silk scarf. The death was not unexpected, but I didn’t write a thank-you note in time. The envelope meant for that task was on my desk for years. It was hers, though she never got it, so I couldn’t send it to someone else. Nor could I bring myself throw it away. So I put it aside, indefinitely, until I moved apartments and it was lost in the shuffle, quite literally, in a box marked “stationery.” I didn’t want my crap to become that envelope, useless and painful and eventually lost. Potential candidates: an Altoids tin full of spare buttons, my half-filled journals, decade-old mix tapes; pens and pencils, giveaway tote bags, decks of cards, reference books; nice things like a painting, a laptop, that scarf; the stuff that goes unnamed in the will, under the clause that includes the words “all the rest of my estate.”

The things we leave behind can be heavy. Perhaps the most special something I could leave my boyfriend would be the freedom not to carry me with him. I was reminded of a poem that the rabbi always reads during the memorial portion of the Yom Kippur service. “When all that’s left of me / is love, / give me away,” it ends. I’d never really thought I was paying attention during that part, but it was there, in my brain, waiting for such a moment. (I looked it up; it’s called “Epitaph,” by Merrit Malloy).

That’s the other option — and, for a while, despite having spent so much time thinking about my will, I was tempted. I could write a simpler will, with only the instruction to give everything to charity, or I could follow the long-standing young person’s tradition and just scrap the whole endeavor.

Except stuff is the only language left to speak. Even Rubin, who says his work is 97% concerned with money rather than objects, knows the feeling: he has a samovar that came to America with his family when they left Eastern Europe with almost nothing. It’s worth little but referred to throughout his life by his mother as his yerushe, Yiddish for inheritance. And “leave me something special” wasn’t all that my boyfriend said. It’s sad to think about, he said, but I like the idea of being named in your will. It’s a privilege to hear someone speaking to you when you thought the chance was gone, he said. No matter what it says in the will, he said, I’ll be happy to hear your voice. He has a point. After all, the verb “bequeath” is from an Old English word meaning “to speak.”

So I decided not to give up on the will. I’ll give my junk and my money to the people I love — though I did end up adding two more clauses before I felt finished. First, I added a few sentences in my own words to the legalese of the template I’d found online: don’t feel bad if you have to get rid of something, I told my heirs. Legally enforceable? No. Worth saying? Yes. Second, I found that something special, something not too heavy.

I printed the will. I found some witnesses and we signed the paper. I folded it up and put it in an envelope and put that envelope somewhere safe. And then I went back to my life.

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