Think About Estate Planning In A Productive Way

Many of us will remember a song from childhood.. “Dem Bones.” The melody was composed by James and Rosamond Johnson and it was first recorded by Myers Jubilee Singers in 1928.

Toe bone connected to the foot bone

Foot bone connected to the heel bone

Heel bone connected to the ankle bone

Ankle bone connected to the shin bone

Shin bone connected to the knee bone,

and so on

Your estate plan is the same.

Everything conects and makes a coherent whole.

That’s why you must start it earlier and recognize your asset accumulation plan, your retirement spending plan, your tax plan, your asset management plan following the first death, and the eventual estate distribution are all part of a whole.

If you manage them one at a time, you will get inadequate answers.

Your estate plan should begin now and it should aim at addressing all of the financial sectors of your life.

What happens if you don’t?

You will miss things you could have used to your advantage.

  1. Most people look at estate costs like taxes, probate costs, equalization, and distribution, as separated from their retirement plan. Some things they could have done while living would have minimzed the liabilities arising at death.
  2. Other things they might have done would have reduced the price to have the cash available to meet the remaining amounts.
  3. Still others might have made spending money available cheaper. Notice the difference between cash to spend and income.
  4. Complex assets like rental real estate and businesses need management. Between the first and second death there could be a deficiency. Know how succession works.
  5. People organize their affairs according to conventional wisdom about asset mixes and volatility as it applies to older people. If you have assets that will never be used by you while living, they should be managed on parameters related to the heirs’ position.
  6. Some legacies can transfer much earlier than people think. There are ways to protect both you and the heir.
  7. Some money is good in an estate and some other money is not. Smart people spend bad money before good money. A variation of Greshem’s law.
  8. Never overlook how you handle your charitable ideas. Careful planning can magnify the gifts and reduce taxes all in one package.
  9. Watch the form of your assets. Some assets are indivisible. You cannot tear off 8 apartments from your 24 unit apartment building to pay taxes.
  10. There are cost minimizing tools that most people miss. How many valid wills do you have. If only one, you might want to revisit your asset list.
  11. Eventually you should create a pro forma probate just to see what would happen if you did nothing.

Most people think an estate plan is a plan that covers the orderly payment of amounts due at death and an equitable transfer of the remains to chosen heirs. Some are. Few should be.

It’s not even that simple

Learn about fungible. The costs and delays from poor planning often don’t wreck an estate, but not understanding fungible can wreck a family.

Fungible means having the form that another identical asset can be substituted. For example, $50,000 in an account at bank A is exactly the same as $50,000 in bank B. But, Mom’s watch, the painting over the fireplace in the family room, and granddad’s watch are not fungible. Neither is the home, the cottage, or the business. Non-fungible assets often have emotional hooks that cause rifts in the family.

Some assets are not divisible. Sometimes there is a significant problem to equalize shares. You must know how that will happen.

Even when the dollar value of each legacy is equal, great division can arise.. Be sure you know about the connections to specific assets and deal with them while living. You have a hope of solving the problems, your executors probably cannot.

Speaking of executors, beware of appointing people who don’t know what to do. It is always a mess when the estate lawyer does all the work and the executors just sign paper. Executorship is not an idiot-proof calling.


All of the assets you have now and all of the assets you acquire will end up in one of three pots.

  1. You will spend them to enjoy your life
  2. You will give them or leave them to others
  3. You will lose them

Can we agree that losing is not the best way to go?

Think about it and notice what you can do now to make the whole package work better for everyone involved.

I help people understand and manage risk and other financial issues. To help them achieve and exceed their goals, I use tax efficiencies and design advantages. The result: more security, more efficient income, larger and more liquid estates.

Please be in touch if I can help you. 705-927-4770

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