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You’ll get nothing…and like it! (the NPR interview)

by smeneshi - Aug 25, 2014

Based on the e-mails I received, a lot of you were disgusted when it came out that Philip Seymour Hoffman wasn’t leaving his millions to his three kids (so he thought). The late actor said he didn’t want them to become “trust fund babies.”  Other people like Sting, Warren Buffett, and Bill Gates have said similar things.  Back here on Earth, those of you who are parents or grandparents might have a tough time deciding how to leave your money to your kids and grandkids.  Of course, I always say… FLY FIRST CLASS BECAUSE IF YOU DON’T…YOUR KIDS WILL!!! But what’s the best way to leave your hard-earned savings to your friends, family, and charity?  What should you do if you come into an inheritance? On a recent interview on NPR’s Morning Shift, I explained how you can easily leave assets to your children and others while keeping the fighting to a minimum when you pass away.  I also give some ideas on what to do with an inheritance if it comes your way. Screen Shot 2014-08-24 at 8.10.41 AM As sad as it was, hopefully after hearing Eric’s story (the caller) you’ll be motivated to take some basic steps and get your estate planning in order. HERE’S AN ESSENTIAL ESTATE PLANNING CHECKLIST:

1. Review and update the beneficiaries of ALL your accounts

  • Your 457 deferred compensation plan, old 401(k) or 403(b) plan, Traditional and Roth IRAs, banking and investment accounts, life insurance policies, and any other account that you want to pass on to someone hassle-free

2. A will

  • You can write a will for absolutely no money at all so quit making excuses if you don’t have one!  For example, here in Illinois if you write a will and have your signature witnessed by two people, you’ll likely have a valid will.  I would make the will “self-proving” by having those signatures witnessed by a notary.
  • Name an executor: This is the person that will wrap up your legal and financial affairs after you pass away.  Where do you want your money to go when you die?  The kids?  Charity?  Your executor should follow through on your orders.
  • Name a guardian:  This person will take care of your kids and can be the same person that handles their money

3.  A trust

  • Do you want your assets to pass to family, charity, and others when you die without any hassles?  Do you want your kids or grandkids to get your money, but not until they are more mature, let’s say at age 30?  Then a trust will take care of this for you.
  • What’s the difference between a will and a trust?  Very basically, a will is written instructions given to someone to pass your assets on to others when you die, among other things.  A trust can do this either while you’re living or after you pass away but unlike a will, the title to your assets is transferred outside of probate court (which can cost a lot of $$$).  Plus, your wishes are kept private – it’s just between you, the trustee, and the beneficiaries.

4.  Healthcare power of attorney (HCPOA)

  • This is a very important document so have an experienced attorney draft one for you.  What if you’re in a terrible car accident and can’t make healthcare decisions because you’re in a coma?  With an HCPOA, you name someone (usually your spouse) to make those decisions for you.  Instead of letting the state decide who will call the shots for you, you’re doing this before bad luck hits.  This is one of the most important but least-used documents.

5. Power of attorney for finances (POA)

  • This is another important but way underused estate planning document and it doesn’t cost that much to draw up.  A good handful of you in the public sector are in the rental business, especially firefighters.  But what if something happens to you and you’re not able to collect the rent, pay the bills, etc?  Wouldn’t it be nice to have someone automatically step into your shoes and handle your business affairs?

6. Living will (this is different than a normal will)

  • If you get really sick or have a bad accident and don’t want to be kept alive if there’s really no chance of surviving or coming out of a coma, your living will gives clear instructions to your doctors when to not sustain your life any more.  The living will keeps your family from unnecessarily suffering and also preserves your wealth by not being treated for something that you have no reasonable expectation to survive.

So much of the estate planning that you can do is very basic and costs little to no money at all, so just start the with the basics; update things like your 457 plan and write a will.  If you have more specific directions for your assets, then talk to a qualified attorney about drafting a will.  You’ll DEFINITELY want your lawyer to draft a healthcare power of attorney and power of attorney for finances for you and your spouse – it will save a lot of headaches and heartache during tough times.


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2 responses to “You’ll get nothing…and like it! (the NPR interview)”

  1. Jim McNutt says:

    Very Nice Sev,
    Well written as well as good & important information. Thank You;

  2. smeneshi says:

    Thanks for the compliment, Jim.

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