Kip Rupple, 62, of Muskego, Wis., plays guitar in a classic rock band on the weekends. He and his wife, Roni Kramer, 56, ride Harleys. They know how to have a good time, but they’ve lived enough to know when to take life seriously.
Last year, Rupple saw the wife of one his best friends get sick and die. “I remember how painful it was for them while she was on her deathbed, having attorneys in there doing estate plans for the two of them,” he says. “I would never want that, and now the situation with COVID made me realize it’s probably a good time to get ahead of that sort of thing.”
The COVID-19 pandemic has made 2020 a nightmare for many people around the world, and inadequate estate planning can exacerbate the pain. Certified financial planner Stacy Francis, president and chief executive of Francis Financial, in New York City, recently helped a client whose husband passed away in the hospital due to COVID complications. “She came to us with screenshots of his last texts to her that were frantically sent and trying to outline their investment accounts, where their money was and what she needed to do,” Francis says.
Since then, Francis and the widow have worked together to take control of her financial situation and update her own estate plan. That’s the thin silver lining Francis hopes people take away from her client’s story. “While there’s been so much heartache due to COVID, use this as an opportunity to get your estate plan in order, get your life insurance in order, get your financial ducks in order,” she says.
Having a will and estate plan is important for everyone, but it’s crucial as you approach retirement. You’ll probably have more assets at this stage of your life, and it’s important to consider who you would like to inherit them. You’ll also want to be certain that your spouse and family will be well taken care of if anything happens to you.
TRY A TRUST
For many people, family is the point of estate planning. “Preparing your estate is a real act of love—not for you, but for your family,” says Chas Rampenthal, general counsel for LegalZoom. “You’re telling them straight up, ‘I’m not going to put that burden on you to figure out what I wanted. I’m going to tell you what I want, so you don’t have to worry about it.’ ”
Without a will or estate plan, state law dictates how your assets are distributed after you die. “Not only can this be a costly process in many cases, but it can also be a giant burden on your heirs during a time of grieving and sadness,” says Taylor Schulte, a CFP and host of the podcast Stay Wealthy.
Even with a will, going through probate (the court-supervised process of passing assets through a will or, in the absence of a will, through state law) can be time-consuming and expensive. You can avoid it by setting up a trust, the most common of which is a revocable living trust. (Revocable means you can change the terms of the trust if your wishes or circumstances change.) A revocable living trust “is a really powerful tool,” says Samuel Nuxoll, an Ann Arbor-based estate planning attorney with Miller Canfield. “It sort of has this mystique about it as being only for the rich and famous, but that’s just not true.”
To the contrary, he suggests that most people—especially anyone who has children or owns real estate— could benefit from setting up a trust. Not only does having a trust let you avoid probate and help ensure that your money goes to the people you choose, but it also lets you control exactly how the money can be used and appoint a person to take control when you’re not available.
“With a will, the executor is really just kind of an administrator who transfers assets from one person to another. But a trustee is more of a decisionmaker,” he says. “They’re standing in your shoes and making decisions you would want to make if you were still around to make them.”
Nuxoll sold the idea of a trust to Brian and Marisa Pilarski, of Chesterfield, Mich. When they had met with him, they were just hoping to outline what would happen to their 1-year-old son, Franklin, if they were both to pass away. But Nuxoll explained that if they were to die while Franklin was still a minor, simply leaving him all their assets wouldn’t work out the way they wanted. “He guided us to think about, in the event of an emergency, who things will go to, how things will be spent, how we want to allocate those funds,” Brian, 33, says.
Like many new parents, the Pilarskis had intended to square this all away for Franklin at some point. “But quarantine put a little fire under us to get us moving,” says Marisa, 35.
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