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A Further Look | Oct 18, 2023

Estate Planning Made Simple

David B. Root, Jr.

CFP®

“Do something today that your future self will thank you for.”-Unknown

I would like to have a frank discussion with you about an issue that many of our clients are uncomfortable talking about - estate planning. When you consider all of the great things you have accomplished in your life – raising a family, building a successful career, helping to improve your community, among many others – shouldn’t the memory of a life well-lived be preserved? Whether someone is simply forgotten or if they have a lasting legacy depends on decisions we make while we are alive.

A legacy of lasting memories is what enduring families are all about. Several years ago, something happened in my own family that caused me to take action on behalf of my parents. While in his fifties, my father was dealt a series of financial blows that made him and my mother vulnerable to any future unexpected hardships. I wanted my parents’ memory to be a positive one, and fortunately I had the ability and the expertise to assist them.

It is natural for all of us to want to help provide financial security for our children, grandchildren, and future generations of our family. But sometimes, circumstances can create the necessity for all generations of a family to be involved.

When my father experienced a catastrophic career and financial emergency, he was left with few options and an urgent need to protect his assets and find a new source of income. Fortunately, serving as a financial advisor provided me with an understanding of what was needed.

In that moment, roles were reversed as I was called on to step up for the man who had always been my greatest fan. I was able to secure employment for him within my company and in that moment our futures were forever linked. Naturally, we began to have numerous discussions about estate planning. But more importantly, it became a mission to preserve my parents’ memory.

I recommended family meetings to discuss potential risks and to plan for the protection of their assets. As a result, my three brothers became more involved as well. This family first approach proved highly successful, as we not only grew closer as a family, but also learned more about how we could help strengthen our parents’ financial situation and preserve their legacy. Over the years, we collectively recognized the need to insure our parents’ financial stability in the event of any late-life health challenges they could face.

We were all established in our careers and had our own families, but we saw the importance of understanding the details of our parents’ estate. More than a decade into our work together, we uncovered a critical gap – long-term care insurance. At age 69, we knew it would be expensive for our parents, so my three brothers and I decided to take on the premium, with each equally sharing the cost. But a sister-in-law stepped forward and suggested that our parents have ‘skin in the game.’ We then decided to split the pie five ways.

The peace of mind we felt was amplified a few years later when sadly, our parents were no longer able to stay in their home. The prologue is both parents withstood a seven-year battle with Alzheimer’s, incurring nearly $1 million in expenses that would drain the resources of any family in the absence of a proper plan and long-term care coverage. This important measure helped avoid the catastrophic financial consequences of both parents needing long-term care. They were also able to live together until their final days, just as we had always remembered them.

Our family learned that whether it’s through a formal family meeting or a barbecue conversation, it is important to have discussions on who needs to do what and when they need to do it. Estate planning made simple!

Sadly, the rate of Americans who have an estate plan remains low. Even though 6 in 10 Americans have a retirement account, only 1 in 3 have an estate plan according to the Caring.com 2023 Wills and Estate Planning Study¹. Interestingly, the study claims more Americans are starting to realize the importance of estate planning, partially due to inflation. In fact, 1 out of 4 Americans said that inflation caused them to see a greater need for estate planning. So, now may be the perfect time to act!

Even members of the rich and famous have been guilty of poor planning and communication when it came to their estate. Many of their estate settlements have captured public attention due to their complexity, large sums of money involved, or high-profile. The iconic musician Prince passed away in 2016 without a will, leading to a well-publicized legal battle over the distribution of his estate, estimated to be worth hundreds of millions of dollars. Multiple potential heirs, including half-siblings and others, made claims, and the court had to determine the rightful heirs. Sadly, Prince’s estate became a battle between its rightful and wrongful beneficiaries after his passing.

Conclusion

Talking about estate planning is hard. Talking about my own family’s experience is also hard. One of the more difficult aspects of any estate planning discussion is its emotional impact on the entire family. Even so, all potential risks should be discussed, with each generation being part of the process. My parents’ experience provided a valuable lesson that the best time to prepare for sudden changes in your health is when you are still healthy. Had we not been so fortunate as to uncover our parents’ insurance gap before it became a real issue, the impact on our financial situations—and much more importantly, our relationships as brothers and in-laws—could have been catastrophic.

Communication between the generations is key to being prepared when the time comes. From one who has seen its benefits first hand, start the conversation sooner than later. What my brothers and I did for my parents helped to preserve their lasting memory within our family. That is what DBR & CO can assist you with.

If you are interested in learning more about the intricacies of estate planning and its importance to all members of your family, I invite you to tune in to our upcoming estate planning webinar in mid-November. Look for more details coming soon.

Thanks for reading.

This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author. D. B. Root & Company, LLC. does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources, and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. All investment strategies have the potential for profit or loss. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. The impact of the outbreak of COVID-19 on the economy is highly uncertain. Valuations and economic data may change more rapidly and significantly than under standard market conditions. COVID-19 has and will continue based on economic forecasts to have a material impact on the US and global economy for an unknown period.

David B. Root, Jr.

CFP®

Founder & Chief Executive Officer

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