How Are Missile Defense, Stopping Donald Trump, and Estate Planning Alike?

You can’t get it right if you come from behind.

What is the biggest problem involved in intercepting an incoming ballistic missile warhead?  The targeting mechanism looks for a heat signature so approaches from the rear, where the heat is most visible.

If you approach the warhead and detonate the explosives, you cannot hit it because the warhead is moving faster than the explosive shock wave.  The explosives cannot catch up.  It is like trying to hit a car with a rock when the car is moving away at a higher speed than you can throw the rock.  New methods approach from the front and collide.

Same problem with defeating Donald Trump, or creating an estate plan.  You must get in front of the problem.

With Trump, the others and the media are comparing him to the template of conventional politician behaviour.  Mistake!  He is playing a different game; the persuasion game. He is experienced and talented at that game.  The longer he plays the more people he will convince.  The media should be looking ahead at that game to understand the possibilities.

Trump will soften some of his current positions and will do so on his terms and timing. He will not soften the one that says, “If you want to have a country, someone needs to look after it and for a long time no one has been doing so.” A lot of moderate people can agree with that and if he provides some policy direction he will persuade them.

Estate plans behave the same way.  To be effective you will need to visualize how things work during the estate resolution stage.  Far in the future. 

You will not be there to provide guidance.  The heirs and executors will not know all your contacts and possible helpers.   Assets may be sold for too little because the estate needs more cash.  Loans may tie up the estate for years.

The wrong people may end up with important assets.  Heirs may be fighting over trivia.  The piano, the necklace Mom wore to my wedding, a print I gave them on their 25th wedding anniversary, the framed picture of Dad with Tiger Woods.  Who knows?  Fights are not necessarily over money.  Many are over cherished memories.  Resolve those while you can.

All estates have three viewing points and they must reconcile.  The deceased’s view, while living, overestimates total value because taxes and some other liabilities are not considered.  Costs, taxes and latent liabilities like guarantees can easily cost 40% of value.   The heirs see their share and compare that to their expectation, generally negatively.  The executor sees liquidity, urgency and obligations.

Executors value liquidity over all else.  Heirs value equitable and prompt settlement.  The deceased should have thought it through and provided the tools and instructions to minimize the problems.

You cannot get a do-over.  Every plan, and every will that goes with it, must be done as if it is your last plan. 

Some day one of them will be.

Don Shaughnessy arranges life insurance for people who understand the cost-effective value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.  In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you.  don@moneyfyi.com  866-285-7772

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