A sad story of a lost gift

A disappointing phone call came in today. Not the first time I had heard these same words. An appointment I had made with Ms Smith (not her real name) was being canceled.
She explained that her son and her nephew had told her she didn’t need an Estate Plan. Something they had done with her home and her accounts were all she needed.
I could have told her that her son was doing something illegal – the unlicensed practice of law, UPL, but since it is his mother it probably wasn’t illegal, only misguided.
There seems to be a mystery around estate planning. Years ago it was very uncommon for folks with less than a million dollars in assets. Banks would maintain ‘trust departments’ to invest those assets and set up a trust over which they would be trustee. This was beyond most people’s financial ability and so the idea that trusts were for the wealthy was the accepted belief.
Since Estate Planning is a specialty in the practice of law not every attorney is well versed in the drafting of a trust document and it continues to be made more complicated than it needs to be. Therefore people try to find loopholes.
There are a number of things a person can do to try and avoid the frustrations and cost of probate, but each of these are only a part of a total plan. Often I’ll use an analogy or two to explain.
I am a DIY, a do it yourself kind of guy. If I can figure it out and do it myself there is no reason to be paying someone else. Drives my wife nuts. But when I die, the DIY is gone and the family is left to deal with whatever I left behind.
I live in the northpart of the mid west. I have never been in a hurricane, but I’ve seen the news footage on television. The folks down there are not boarding up their homes and windows with 2 x 4s. They are using full sheets of plywood. They know that if they put a few 2 x 4s across the window the storm will blow in and destroy the house. Those 2 x 4s represent the quick solutions people use rather than engage a professional. They think they have out tricked the storm by doing it themselves. In many cases the storm still enters the house and ends up costing more time and money than if they simply sought expert advice and purchased the plywood.
I hope Ms Smith’s son calls me back. If he is willing to listen I can explain how the benefit he hoped to gain in one area will be trumped by the tax implications in another area. Ms Smith’s other adviser is in the financial services industry. There is a lot of information to keep up with in that industry. During my 25+ years as a licensed financial adviser I would never advice my clients on estate planning matters, it was out of my area of expertise and seemed morally wrong if not illegal.
The sad thing is that I don’t think I will ever hear from Ms Smith’s son. I could tell him that the cost of the plywood is a whole lot less than the 2 x 4s and more of a sure thing. He would be doing himself a big favor. After the storm Ms Smith will be gone and her son will be left alone to clean up the house. That’s why I made sure that I got my own father set up properly. It’s a gift to me. Then I set up my own estate plan. Its a gift to my wife and family.