Category: The Wealth Counselor

Protect Your Wealth and Your Spouse with a Spousal Lifetime Access Trust

February, the month of love, is the perfect time to show your loved ones that you care about their financial futures. 

While chocolates and flowers are nice gestures, a spousal lifetime access trust (SLAT) can make a more lasting gift, especially with the record-high estate tax exemption set to decrease drastically in 2026. In general terms, a SLAT is a trust that allows you to transfer your assets (for example, your accounts, money, and property) to your spouse while minimizing estate taxes and shielding those assets from probate and potential creditors.

Although the weather may still be cool outside, this time of year is when estate and tax planning heat up. So grab a cup of cocoa, snuggle up with your sweetheart, and dive into the world of SLATs.

How SLATs Work and Key Features

A SLAT is an irrevocable trust set up by one spouse (the donor spouse) primarily for the benefit of the other spouse (the beneficiary spouse). Other beneficiaries, such as children or grandchildren, are named remainder beneficiaries for when the beneficiary spouse passes away. Some key features of a SLAT are as follows:

• The beneficiary spouse can receive direct distributions from the trust; the donor spouse maintains indirect access to the assets through the beneficiary spouse. 
• When the donor spouse funds the SLAT, the value of the assets transferred is treated as a taxable gift to the trust beneficiaries, even the beneficiary spouse. The gift is typically sheltered from federal gift taxes by the donor spouse’s federal lifetime gift and estate tax exemption, which in 2025 is $13.99 million per individual.
• After the assets have been transferred to the trust, they are removed from the donor spouse’s taxable estate and are generally not included in the surviving spouse’s taxable estate.
• Any future appreciation of SLAT assets after transfer to the trust is not subject to estate taxes. 
• A properly drafted SLAT generally protects the assets of the beneficiary spouse from creditors. 
• Depending on how the trust is structured, the donor spouse is usually responsible for paying income taxes on the trust’s assets, including dividends, interest, and capital gains. 
• When the trust terminates (i.e., when the beneficiary spouse passes away), the remaining trust assets pass to the remainder beneficiaries, such as children, whom the donor spouse has named in the trust document. The assets can be distributed directly to the remainder beneficiaries or held in further trusts tailored to each beneficiary. 
• Married couples can set up separate SLATs to benefit each other. However, it is important to ensure that the trusts have different terms to avoid the reciprocal trust doctrine, which could cause both trusts to be undone, resulting in the assets being included in the spouses’ taxable estates.

Why Now Is the Time to Consider a SLAT

As you may know, the federal estate tax exemption is at a record high right now but could drastically decrease in 2026. If you have a large estate and that happens, your loved ones could face a hefty tax bill when inheriting your assets without proper planning.

SLATs grew in popularity amid the uncertainty of the 2012 fiscal cliff. The present uncertainty around tax legislation makes them an intriguing option to “lock in” today’s high federal estate and gift tax exemption.

This exemption, which allows a couple to shield a total of $27.98 million without paying any federal estate or gift tax, is the highest it has ever been. It marks an upward trend since the 2017 tax reforms under the first Trump administration. However, without further congressional action, these limits are scheduled to expire at the end of 2025.

Important Considerations and Potential Drawbacks of SLATs

SLATs offer tax efficiency, wealth preservation, and financial flexibility, but they are irrevocable (in other words, they cannot be changed once created) and require proper planning to avoid loss of access to assets as well as Internal Revenue Service (IRS) scrutiny. Here are some points to keep in mind about SLAT planning:

• If the beneficiary spouse predeceases the donor spouse, the donor spouse loses their (indirect) access to the SLAT assets. (The same can happen in the event of a divorce; without the right provisions, the donor spouse may still be on the hook for paying income taxes on trust assets that are solely benefiting their (now) ex-spouse.)
• If trust law is not carefully followed, unwanted tax consequences can occur. One such outcome is that, if the donor spouse retains certain powers over the SLAT, such as the unrestricted ability to replace the trustee, the trust’s assets might still be included in the donor spouse’s estate. 
• It is not ideal for the beneficiary spouse to receive distributions from the SLAT unless they are truly needed because the distributions bring assets back into their estate and reduce the trust assets that can grow tax-free. 
• When assets are placed in a SLAT, they retain the donor spouse’s original tax basis, so beneficiaries could end up owing capital gains tax particularly on low-basis assets when they are eventually sold or liquidated. 
• If the beneficiary spouse is the SLAT’s trustee, distributions should be limited to the health, education, maintenance, and support (HEMS) standard. However, the level of access that the beneficiary spouse has will impact the level of asset protection. If more protection is needed, an independent trustee should be appointed and the distributions permitted only at the trustee’s discretion. 

Love Is in the Air (and in Your Estate Plan) with a SLAT

Valentine’s Day provides a welcome reprieve from the seemingly interminable period between the holidays’ end and spring’s beginning. However, while the days are getting longer, the time to lock in a guaranteed high federal estate tax exemption in 2025 is growing shorter. 

Given the approach of tax season and the ongoing questions around tax law, now is an opportune time to review your estate plan and ensure that your wealth stays in the family rather than goes to the IRS. SLATs are a timely and powerful (and, dare we say, romantic?) tool to transfer substantial wealth and lock in current tax advantages while maintaining financial security and flexibility. 

Schedule a meeting to explore how you can show your love with a SLAT this Valentine’s Day. 

Maximize Tax Benefits and Protect Your Spouse with a Qualified Terminable Interest Property Trust

Valentine’s Day spending totaled nearly $26 billion in 2024, including an all-time high of $6.4 billion spent on jewelry. Yet many Americans report feeling disappointed that their partner did not do enough to celebrate Valentine’s Day. 

More than 40 percent of US adults say they feel stressed about finding the perfect gift for loved ones. About one-third plan to give a gift of experience this year instead of material possessions, marking a consumer shift toward gifts that are seen as more experiential and personalized than material items. 

While the gift of a qualified terminable interest property (QTIP) trust may not be the most romantic Valentine’s Day gesture, it could prove to be more thoughtful, caring, and valuable than an off-the-shelf purchase. 

What Is a QTIP Trust?

A QTIP trust is an irrevocable trust for married couples that offers a tax advantage for the trustmaker (the spouse who creates the trust) and financial security for the surviving spouse while preserving wealth for future generations. Here is how it works: 

• The trustmaker’s assets are transferred to the QTIP trust upon their death. These assets are then held in trust for the surviving spouse according to the terms of the trust.
• QTIPs qualify for the federal estate tax marital deduction. This means the assets (accounts and property) transferred to the trust are not subject to federal estate taxes at the time of the trustmaker’s death, effectively deferring those taxes until the surviving spouse’s death.

• The surviving spouse receives income generated by trust assets for the rest of their life, giving them financial security and support. 
• The trustmaker names beneficiaries who will receive the trust assets upon the surviving spouse’s death. They could be family members, such as children or grandchildren, a charity, an entity, or anyone else the trustmaker chooses. 
• A trustee appointed by the trustmaker manages the trust assets and ensures they are used in accordance with the trust’s terms, which can be customized to meet the trustmaker’s wishes and allows the trustmaker to retain control over the assets “from the grave.” 

What Makes a QTIP Trust Different? 

There are as many different types of trusts as there are flavors in a box of Valentine’s Day chocolates. In a way that sets them apart from other trusts, QTIPs offer a unique balance between providing for a surviving spouse and maintaining trustmaker control over the trust’s assets. 

• Trustmaker control. While a QTIP is required to pay all the income it generates to the spouse beneficiary, the trustmaker can specify whether and under what circumstances the spouse may access the trust’s principal. 
• Estate tax savings. QTIPs allow the trustmaker’s estate to take advantage of the unlimited marital deduction to minimize estate taxes. 
• Protection from creditors. Assets held in a QTIP trust are generally protected from the surviving spouse’s creditors and from claims in any future remarriage. The level of protection will depend on the level of control the surviving spouse has over the trust’s assets. However, after assets have been distributed to the surviving spouse, they may be subject to a creditor’s claim. 

Customizing a QTIP Trust

One of the strengths of a QTIP trust lies in its flexibility. Some ways to customize a QTIP include the following:

Distributions of Principal

The trustmaker has almost unlimited leeway to dictate when and how the trustee can distribute principal to their spouse. For example, they can limit access to the principal for only health, education, maintenance, or support expenses (i.e., the HEMS standard). They can also give the trustee sole discretionary authority to distribute principal based on the spouse’s needs. They can even prohibit spousal access to the principal altogether to preserve assets for remainder beneficiaries.

Spousal Control

Although the trustmaker has the final say on the ultimate distribution of assets when the surviving spouse passes, they can give the surviving spouse some degree of control using strategies such as a testamentary limited power of appointment, which lets the surviving spouse choose how the remaining trust assets are distributed upon their death among a defined group of beneficiaries predetermined by the trustmaker (e.g., children, grandchildren, other family members). 

Why Use a QTIP Trust? 

A QTIP trust can be an effective estate planning tool if you want to provide for your spouse after your death but ultimately limit the spouse’s control over your assets and have your assets pass to different beneficiaries. 

This arrangement may prove useful when you have children from a previous marriage, your spouse does not manage money wisely or has creditor issues, or there is some other unique family dynamic. A QTIP trust can also be part of a business succession strategy that ensures your spouse has an income stream from the business without being involved in running it. 

This Valentine’s Day, instead of the customary candy, cards, flowers, and jewelry, consider showing your love with the gift of a QTIP trust that lasts a lifetime—and, in many cases, even longer. Call our office to schedule an appointment.

Appointing Your Legacy: A Guide to Using a General Power of Appointment Trust to Protect Your Spouse

Through sickness and health, thick and thin, you and your spouse have been there for each other. You may even share almost everything, including your estate plan. That plan expresses the love and trust you have built over the years. It ensures that the other will be financially and legally taken care of when something happens to one of you.

However, you may have lived long enough to know that, despite your best efforts, not everything can be perfectly planned for. A proper estate plan can help ensure that your surviving spouse is taken care of, that your wishes are honored after you pass away, and, if necessary, that the marital deduction is utilized to address any estate tax concerns you may have. One solution for married couples is placing assets (money and property) into a general power of appointment (GPOA) trust. While this estate planning tool is not as restrictive or protective as other options, a GPOA trust can still provide peace of mind.

What Is a GPOA Trust? 

A GPOA is the legal authority granted by one individual (the donor) to a different individual (the donee, also known as the powerholder or appointer) that allows the donee to determine who will receive certain assets, either during their lifetime or upon their death. This power is broad and may include the ability to direct the distribution of the assets to themselves, their creditors, their estate, or their estate’s creditors, making it distinct from more restrictive limited powers of appointment. In a GPOA trust, the donee is the beneficiary and has a GPOA over the assets in the trust. Here is a breakdown of how a GPOA trust works: 

• Upon the donor spouse’s death, the assets transfer into the GPOA trust, and the provisions of the trust grant the donee spouse the general power of appointment over those trust assets. 
• A GPOA treats the donee spouse as the legal owner of the trust assets. This means that they can control what happens to the assets in the trust, even if their decision differs from what the donor spouse originally specified in the trust’s distribution instructions.
• The donee spouse has unlimited discretion to decide who receives the trust property and how and when beneficiaries receive it. They can also use a GPOA to change the trust asset beneficiaries or the terms and conditions of beneficiaries’ distributions from the trust. This also means that they have unlimited withdrawal rights.

How a GPOA Trust Protects Your Spouse and Your Legacy

Giving your spouse the ability to alter your estate plan might seem like a risky move, and in some ways, it is—both for you and them. However, the open-ended nature of a GPOA trust offers unmatched flexibility that can futureproof your estate plan and ensure that your spouse and loved ones are protected in the ever-evolving landscape of life. The following are some additional benefits:

• Incapacity protection. If the surviving spouse cannot manage their affairs when their spouse passes away, no one has to worry about guardianship or conservatorship for these assets because the trustee will step in and manage the assets on behalf of the surviving spouse. In other words, the assets held in the trust can generally be managed without court oversight, whereas assets held in the spouse’s name may require court intervention.
• Asset segregation. Depending on the types of assets you own and the applicable state law, it may be beneficial to have certain assets set aside in a trust so they can be managed independently and to avoid any future commingling should the surviving spouse remarry.
• Probate avoidance. As long as the assets remain in the trust, the successor trustee can take over management when the surviving spouse passes away, bypassing the need for probate court involvement. This ensures a smoother transition and keeps the details of the trust, including what and how much is left to beneficiaries, out of public view.

While probate avoidance and incapacity planning are important considerations in an estate plan, a GPOA trust’s other key advantages lie in its ability to provide long-term flexibility and address unforeseen circumstances. 

• If your spouse experiences a significant change in their financial or life situation after something happens to you, they can adjust the distribution of assets accordingly using their GPOA. 
• Changes in family dynamics, such as divorce, disability, or windfalls, can also necessitate adjustments to an estate plan. With a GPOA trust, your spouse can add or remove beneficiaries who will inherit at their passing, alter the amount of assets a beneficiary will receive at your surviving spouse’s death, and modify the timing or conditions of distributions, such as setting age requirements or other criteria for receiving funds. 

Requirements for a General Power of Appointment Trust

As with all trusts, certain requirements must be met, especially if you want assets in this trust to qualify for the unlimited marital deduction. Some of these requirements are the following:

• Mandatory income distributions. The surviving spouse must receive all income from the trust, at least annually.
• Power over assets. The surviving spouse must have the power to appoint assets to either themselves or their estate.
• Only the spouse. Only the surviving spouse can exercise their power. No other person can have the power to appoint the trust assets.

Planning for Life’s Changes 

Change is the only constant in life. An estate plan that cannot adapt to change risks failing when it matters most. You cannot plan for everything, but with a GPOA trust, your estate plan can be ready for anything. 

For couples who have built a life together, a GPOA trust can represent the culmination of the love and trust they share and give an estate plan, like a strong relationship, the ability to stand the test of time. 

Call us to discuss the pros and cons of general powers of appointment in estate planning.

Why You Need to Worry About Incapacity Planning

Death is the elephant in the room when we talk about estate planning. We often use phrases like pass away and pass on to make our meetings feel more comfortable and avoid being overly macabre, but the not-so-subtle subtext of an estate plan is death’s inevitability.

If death is the elephant in the room in estate planning discussions—the obvious issue nobody names out loud—then incapacity is what is obscured behind the elephant, sometimes so obscured that you do not even know it is there. 

Incapacity can happen at any age and can have many causes. An estate plan that addresses only what happens to your assets (such as your money, property, life insurance policies, and retirement accounts) after death—and does not address who can make decisions about your personal affairs if you become temporarily or permanently incapacitated—is fundamentally flawed. 

What It Means to Be Incapacitated

Incapacity means that you lack the ability to handle your affairs due to illness, injury, cognitive decline, or some other cause. You are, to take the literal meaning of the word, in a state of being incapable. 

Legally, incapacity means something similar to incompetency. In the context of estate planning, incapacity refers to an impairment that renders you unable to make or communicate important decisions or to manage your affairs, including financial and healthcare matters. 

Although often conflated with disability, incapacity and disability are technically not the same. A disabled person can be incapacitated, but disability does not necessarily involve incapacity. 

Someone who is in a serious car crash, for example, may have injuries that affect their mobility but not their cognition and communication. They may not be able to get around without assistance, but they can still make important decisions about their financial, property, legal, and healthcare affairs. 

Incapacity and Your Estate Plan

When you become incapacitated, somebody else must step in and handle your affairs for you. Your bills and taxes still need to be paid, your investments must be managed, and healthcare must be provided, especially if you have suffered a medical emergency that renders you incapacitated and requires immediate treatment. 

If you want to take a proactive approach to incapacity planning, then you should create an estate plan in which you name and appoint your trusted decision-makers to act on your behalf when you are incapacitated using documents such as financial and medical powers of attorney and a living trust. 

Without an estate plan that names financial and medical decision-makers for you in the event of your permanent or temporary incapacity, these choices could be left up to the court. 

States have laws that provide guidelines for determining incapacity when the court must appoint a guardian or conservator (the term used may vary by state) for an incapacitated person. These legal definitions typically include medical, functional, and cognitive components. 

However, you are not bound by state law standards when specifying in your estate plan how to determine when you are incapacitated—and when decision-making authority should be transferred to another person. Typically, loved ones, physicians, or a combination of the two can make the determination, but you could choose to specify in your estate plan that a disability panel or—in rare cases—court oversight should be involved if you prefer. 

You may wish to remain in charge of your affairs as long as possible, or have concerns about others making decisions for you, and prefer a conservative standard. If you are highly confident in your chosen decision-makers (e.g., it is your spouse of 40 years), you may be comfortable with a less rigorous process. 

The goal of an estate plan should be to strike the right balance between convenience, objectivity, and timeliness. 

In addition, you can create provisions in your estate plan to compensate those you name to act on your behalf while you are incapacitated. 

The people you name to make decisions for you may not expect to be paid. But reimbursing them for expenses they pay while managing your affairs, such as legal fees and accounting costs, and compensating them for time spent not working can help ensure that all of the necessary legwork (and paperwork) is performed during your incapacity. 

Incapacity Is an Ever-Present Risk

The following statistics should be a sobering reminder that incapacity is a very real threat to you, your family, and your legacy that can strike at any time and any age: 

• One in four 20-year-olds will become disabled before retirement. A disability does not always lead to functional incapacity, but it often does. 
• There is an approximately 70 percent chance that an adult age 65 and older will need long-term care in their remaining years. 

• One in nine adults age 65 and older has Alzheimer’s disease, the leading cause of dementia and a common cause of incapacity.
• Around 13 percent of all adults and 66 percent of adults age 70 and older are living with a cognitive disability such as dementia, autism, or traumatic brain injury that may render them unable to make an emergency medical decision. 
• As we live longer, our chances of becoming incapacitated rise. Fewer than 10 percent of Alzheimer’s cases occur before age 65. At age 85, the risk increases to one in three. 
• Incapacity can be permanent (e.g., due to dementia or a stroke) or temporary (e.g., because someone is unconscious or under anesthesia). 
• Many different conditions can result in incapacity, such as substance abuse disorder, mental illness, post-surgical complications, and grief and bereavement. 

Plan for Incapacity to Avoid Estate Planning Gaps

Like death, incapacity looms large, especially as you get older. Acknowledging the very real risk of incapacity is the first step in addressing it. The next step is meeting with an attorney and taking action to build incapacity contingencies into your estate plan. 

Whom Do You Trust to Make Your Financial Decisions? 

You wake up and check your investments over a cup of coffee. That tech stock you have been eyeing continues to trend upward, so you log in to your online brokerage account and buy some shares.

Later in the day, you get a notice that your mortgage payment has been withdrawn. Sticking to your budget, you review your monthly spending and see that you have enough saved for an extra payment that month. That afternoon, you redeem some credit card cash back points to pay for a work lunch.

That evening, you schedule an estimated payment to the IRS and update your spreadsheet to reflect recent client transactions. Before bed, while watching the news, you make a note to email your financial advisor about possibly changing investment strategies in response to an expected interest rate cut. 

Although we may not always recognize it, financial decisions and tasks are a part of our everyday lives. They range from daily spending habits to more complex retirement planning. 

You may take for granted that you are able to manage your finances. However, what if you become incapacitated (meaning that you lack the ability to handle your own affairs due to illness, injury, cognitive decline, or some other cause)? Someone else will have to manage your finances for you if you cannot. 

If you have an updated estate plan that names a substitute decision-maker to act in your stead, you have control over who that someone is. Otherwise, the court will appoint a financial decision-maker, and it may not be who you would want—or who has your best interests in mind. 

Guardianship or Conservatorship versus an Estate Plan 

Two-thirds of US adults do not have an estate plan, which effectively means that they lack an incapacity plan (a plan for how their affairs will be managed if they cannot do it for themselves).

You may have created a will and completed other estate planning tasks, such as purchasing life insurance and making beneficiary designations. However, you still need a documented, legally enforceable process and plan for determining who will manage your affairs if you become incapacitated.

To proactively grant the necessary powers to a financial decision-maker, consider a revocable living trust and a financial power of attorney. 

• A revocable living trust allows you to serve as trustee of the trust (in charge of managing the money and property owned by the trust) while you are still able. You can also name a successor trustee to take over trust management if you pass away or become incapacitated. The trust agreement can specify who determines whether you are incapacitated and can also contain detailed instructions about how the successor trustee should manage the trust.

One of the main purposes and benefits of a revocable living trust is to avoid the court-supervised probate process, but it can also be used to help avoid a different form of court intervention: the appointment of a legal guardian or conservator (the term may vary by state), which is the person appointed by the court to make financial and other decisions for you. 

• A financial power of attorney is another estate planning tool that can help avoid court intervention if incapacity strikes you. It gives one person (the agent or attorney-in-fact) the authority to act on behalf of another person (the principal) regarding their financial matters. 

A financial power of attorney is highly flexible. It can include a statement describing how incapacity will be determined and who determines it; it can come into effect only when the principal’s incapacitation is confirmed (in some states); it can specify the powers granted to the agent; and it can be limited or long-lasting in duration. Like a revocable living trust, a financial power of attorney helps eliminate the need for court-appointed guardianship or conservatorship. 

Factors When Choosing a Financial Decision-Maker

When choosing a financial decision-maker, you should consider factors such as trustworthiness, financial knowledge, and the ability to handle responsibilities under pressure. The person selected should have a strong understanding of your values and priorities, be organized, and communicate effectively with other key parties, such as family members or advisors. Additionally, they should be available and willing to serve in this role, as it may require significant time and effort, particularly during complex situations.

If nobody in your immediate circle of friends and family seems like a good candidate, a professional, such as an attorney or financial advisor, can be chosen. However, many professionals are hesitant about serving in the role of an agent under a durable power of attorney, so you may want to consider other professionals, such as professional caregivers or fiduciaries. A professional trustee or agent is different from a professional guardian or conservator because it is a person of your choosing rather than the court’s. 

The bottom line is that estate planning lets you manage incapacity in advance, in the manner that is best for you, your finances, and your family. You are free to name whomever you want to serve as a successor trustee or an agent under your financial power of attorney and to provide whatever instructions you want for them in your estate plan. 

You may never need to rely on an incapacity plan. However, having the right people and provisions in place gives you added protection and peace of mind just in case something happens and you lose financial capacity. For guidance on this front, call us today to set up an appointment.

Whom Do You Trust to Make Your Medical Decisions?

It might be a stretch to say that if you have your health, you have everything. However, to some people, decisions about their health are arguably more personal in nature and more important to their overall well-being than financial decisions. 

This leads to the question of who will step in and make healthcare decisions for you if you are incapacitated (unable to make or communicate your medical wishes). You may have estate planning documents that allow someone else to manage your finances during a period of incapacity. But have you also appointed someone to step in and manage your medical care when you cannot make decisions or communicate your preferences on your own? 

Without certain documents that allow you to control your future medical treatment in the event that you become incapacitated, you could be at the mercy of the courts or medical professionals who are bound by facility policies and procedures and end up receiving care that is different from what you would have wanted. 

Medical Directives and Estate Planning

Maybe you have created a will that names your beneficiaries or set up a trust to hold your money and property for your loved ones. You have even thought of the little things, like property appraisals, life insurance, digital assets, and pet provisions. 

Your loved ones will be well taken care of when you are gone. But a comprehensive estate plan is about more than that. It also involves ensuring that your loved ones can take care of your medical decision-making as you would like them to while you are still alive but incapacitated. This aspect of your estate plan is addressed with documents known as medical directives. 

Medical directives are a series of legal documents that name a medical decision-maker and describe how your medical care should be handled if an injury or illness prevents you from making decisions or expressing your wishes. This could happen, for example, if you are under anesthesia, suffer from dementia, or experience a medical emergency. 

Two medical directives crucial for every estate plan are a medical power of attorney and a living will. 

• A medical power of attorney is a legal document that gives a designated person (referred to as an agent or healthcare proxy) the authority to make or communicate healthcare decisions for another individual (the principal) if the principal is unable to do so. These decisions include consent to or refusal of treatments, surgeries, medication, and other interventions. The agent can also access the principal’s medical records and information as needed for decision-making. 
• A living will (also known as an advance directive) is a document in which you specify the medical treatments you wish to receive—or not receive—at a future time when you are incapacitated and unable to consent to treatment or refuse it. A living will often addresses life-sustaining measures in terminal situations. However, living wills are not legally recognized in all states. 

A medical power of attorney and living will should be written to complement each other. It is important to understand the interplay between these two documents. In some situations, the power of the agent under a medical power of attorney may be limited by any instructions the principal outlines in their living will, and the agent may be unable to make decisions that contradict those instructions. A medical power of attorney may contain healthcare instructions as well. 

A living will should clearly state someone’s preferences for a number of end-of-life care decisions that include CPR, ventilation, dialysis, medications, tube feeding, pain management, and organ donation. 

If these decisions are not addressed in the documents or the directives are unclear, the agent can use their judgment to decide what they think is in the principal’s best interests and aligns with their values. 

Most people choose an agent under a medical power of attorney who knows them well and understands their values and preferences, but you should discuss intervention and treatment choices with your trusted decision-maker(s) before their services are needed. Choosing someone who will be available in case of an emergency is also important. 

What Can Happen When There Are No Medical Directives 

Your medical power of attorney allows you to choose a person or people to make decisions for you if you cannot make them yourself. In other words, you are preauthorizing a stand-in to provide informed consent on your behalf in the future when the need arises. 

Without a valid medical power of attorney, the alternative—appointment of a court-ordered guardian for someone lacking capacity—can be very problematic. 

When choosing a guardian or conservator (the term may vary by state) for an incapacitated adult who lacks a substitute decision-maker, the court considers a combination of the individuals set forth under state law and the person’s best interests, prioritizing close family members such as a spouse, parent, or adult child. Once the patient is deemed incapacitated, the guardian or conservator has full authority to make most or all decisions for the patient unless the patient retains the capacity to make decisions.

While guardianship might seem like a reasonable solution to the issue of not having medical directives, it is often too slow and cumbersome to respond proactively to a patient’s immediate medical needs. Also, guardianship proceedings are usually expensive: there will be court fees and potentially attorney’s fees if one is used (most states require that an attorney represent the guardian or conservator throughout the case). Further, another drawback of guardianship proceedings is the lack of privacy. Since these proceedings take place in court, much of the information shared becomes part of the public record. 

The bottom line is that relying on the appointment of a court-appointed guardian or conservator is often considered by medical professionals and attorneys to be a last-resort option. 

Take Control of Your Medical Future

When you do not have a medical power of attorney and a living will, someone else will still need to make decisions about your healthcare. But who that person is—and what they decide—may not accurately reflect your wishes. 

Naming a stand-in decision-maker and stating your treatment preferences gives you some control over medical circumstances that may otherwise be outside of your control. If you have not yet named a medical agent or are having trouble identifying someone who is available, willing, and able to serve in this role, an attorney can help. To take control of your medical future today, reach out to us to schedule an appointment.

November is a season of transition. Days are growing darker and cooler, school is back in full swing, summer clothes are packed away, the pool is covered, and anticipation is building about the upcoming holidays. 

This is the perfect time to take stock of the year that was and tie up loose ends prior to a frenetic last few weeks that can be equal parts stressful and celebratory. Having a fall to-do list can make the challenges of balancing family and professional commitments more manageable during this busy season. 

Holiday Gifting and Gift Taxes

We spend a great deal of time selecting the perfect gifts, but many people are content to receive cold hard cash. 

A survey from Statista shows that the most desired Christmas gift in 2023 was money (43 percent of respondents).¹ Seven in ten Americans told a Yahoo Finance/Ipsos poll that they would be happy to receive an investment as a holiday gift, including over 40 percent who said they would be “very happy.”² Top reasons cited for wanting to receive an investment were saving for the future, building wealth, and paying off debt. ³

If a client is planning to spread holiday cheer to their loved ones, a cash gift could be the way to go. Remind clients that they have until the end of the year to utilize the annual gift tax exclusion, which for 2024 is set at $18,000 per person and $36,000 per married couple. 

Explain that gifts exceeding the annual exclusion amount may require filing a gift tax return (IRS Form 709) but will not necessarily result in the assessment of a gift tax payment unless the total amount of all gifts made during their lifetime over the annual exclusion amount exceeds their lifetime exemption ($13.61 million for a single taxpayer in 2024 and double that for married couples). 

Also inform them about the potential gift tax changes on the horizon and that the currently high exemption amounts are set to sunset at the end of 2025. If they are planning on giving money away—whether as a one-time generous act or as part of an estate and gifting plan—they should capitalize on the current window to make large gifts. 

Looking Ahead to Tax Season

Like the holidays, tax season has a way of sneaking up on us. But unlike sending a late holiday card, sending a late tax return can result in penalties. The IRS is also generally less forgiving than the people on your holiday list. 

Next year’s Tax Day is scheduled for April 15, 2025. Clients may be more focused on being with friends and family than on a tax deadline that is still months away. Yet taking tax-related steps at the end of the year can help them reduce their tax liability, avoid last-minute stress, and put them in a better financial position heading into the new year. 

For example, they may want to make additional charitable contributions, maximize contributions to retirement accounts like an IRA or 401(k), or defer or accelerate certain income or expenses to optimize their current year tax bracket. 

The end of the year is also a good time to review their overall planning goals. A change in their income, assets, or family situation, as well as upcoming changes in the law, could affect them moving forward. Use this period to analyze their current tax situation and make adjustments that can help minimize taxes next year. 

Refocusing on What Matters Most

Being around loved ones can motivate a client to look at the big picture of what they are ultimately working toward and saving for. An advisor can use this as a motivating factor to look ahead and plan accordingly. 

Making time for both family and clients at this time of year can be particularly challenging, but finishing 2024 on a strong note can help to build momentum toward a prosperous 2025. Before you get pulled into the celebrations, vacations, and fun temptations that surround the holidays, reconnect with clients on end-of-the-year housekeeping. 

We hope you are able to set aside some time in the next few weeks to get together with your own loved ones. And in lieu of a holiday card, we would be happy to hear from you to discuss how we can work together to align clients’ financial and estate planning strategies.

1.  Alexander Kunst, Christmas gifts most desired by U.S. consumers in 2023, Statista (Nov. 30, 2023), https://www.statista.com/statistics/246622/christmas-gifts-desired-by-us-consumers. 
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2. Jennifer Berg & Talia Wiseman, Most Americans would be happy to receive investments as holiday gifts, Ipsos (Nov. 27, 2023), https://www.ipsos.com/en-us/most-americans-would-be-happy-receive-investments-holiday-gifts. ↩︎
3. Id. ↩︎

Football is by far the most popular sport in America and has been for over five decades.¹ In an age of fractured media and streaming services, football’s ability to draw a huge audience on any given Sunday (or Saturday, for college fans) makes it a defining aspect of American culture. Its influence is felt in many ways, including in how we talk: Hail Mary. Game plan. Moving the goalposts. Monday morning quarterback. Blitz. Fumble. Punt. Run interference. Two-minute drill. Call an audible. 

These are some of the football terms that have found their way into everyday conversations. Sports are often considered a metaphor for life that can teach us lessons about adversity, discipline, teamwork, and overcoming obstacles to reach a goal. So let’s huddle up and go over how we can work together to be our own football team for our clients.

Attorney – Quarterback 

If the attorney is the quarterback in this metaphor, then the ball we hold in our hands is a client’s estate plan, and the end zone is the goal they are trying to reach with that plan. 

The quarterback receives the football on every offensive snap. They must read the field, make quick decisions, and distribute the ball accurately and on time. 

But things do not always go according to plan. You can have the perfect play drawn up on paper and then be forced to adjust to what happens on the field of life. There could be a botched snap (say, a divorce), a blitz (pressure, such as the birth of a child, that disrupts the offense’s timing), or a turnover (like a sudden market downturn or job loss) that forces an on-the-fly adjustment. 

It is the job of the quarterback (and attorney) to lead the team and make critical decisions under pressure. Sometimes, that means holding onto the ball and running it themselves. But we also must know when to hand the ball off or throw it to another player on the team—like the financial advisor. 

Financial Advisor – Offense 

A financial advisor is comparable to the offense in football because both involve strategic planning and forward progress toward specific goals, both short-term and long-term. 

The offense—the financial advisor—creates a game plan based on the situation. They survey the field (a client’s finances and market conditions) and adjust strategies to capitalize on opportunities. 

Just as the offense runs a variety of designed plays to advance the ball, a financial advisor uses different investment tools, like stocks, bonds, real estate, and retirement accounts, to reach a client’s objectives. They might even have the occasional trick play—a high-risk, high-reward strategy—up their sleeve, ready to call at the right time. 

Financial advisors take what the defense gives them one play at a time, adjusting near-term client milestones, such as saving more, reducing debt, and rebalancing a portfolio, with their ultimate goal of building wealth and leaving money behind for their loved ones. 

Insurance Agent – Defense 

To extend our gridiron metaphor, an insurance agent is the football team’s defense. While the offense in football aims to score points, the defense is responsible for stopping the opposition, which in this case takes the form of accidents, illness, liability claims, natural disasters, and other losses that could turn the tide of the game against the client. 

Many modern-day defenses have a “bend but don’t break” scheme that focuses on limiting damage and preventing the big play. The same can be said of an insurance agent. By making sure the right financial products are in place, such as homeowner’s, renter’s, business, and auto insurance, they can ensure that their client is covered and help to prevent a worst-case scenario. 

Tax Professional – Special Teams

While the offense and defense get most of the glory, special teams can shift the momentum of a game and often turn out to be the difference between a win and a loss. 

Special teams players, like tax professionals, have a specialized skill set that is utilized during key, high-stakes moments. They may not be on the field for every snap, but when their number is called, they are ready to go, and their impact can be game-changing. 

A punt or kick return can be likened to a personal or business tax filing, helping a client gain field position and giving them an advantage at a critical game juncture. And when the game is coming down to the end (i.e., filing the estate tax return), an accurately placed kick can prove to be the deciding factor. 

Tax professionals can also create scoring opportunities by finding ways to maximize tax refunds, reduce taxable income, or uncover tax savings. 

Let’s Team Up 

When working as a team to advise our clients, we all have a role to play. Offense, defense, and special teams are complementary. All three phases of the game must come together to achieve client success. 

Young clients might be starting out deep in their own territory and need many plays to reach the end zone. Middle-aged clients are closer to the 50-yard line, with a few successful plays behind them but still a long way to go. And older clients may be looking for that last play or two to get them across the goal line. 

Every advisory team needs a game plan that accounts for a client’s strengths, weaknesses, current position, and goals. In estate planning, the game plan must be detailed enough to meet specific objectives and flexible enough to address life changes (think in-game adjustments). 

With the right team of advisors and strategies in place, an estate plan ensures that the final score reflects a winning outcome for the client, their family, and future generations.

1. Jeffrey M. Jones, Football Retains Dominant Position as Favorite U.S. Sport, Gallup (Feb. 7, 2024)
   https://news.gallup.com/poll/610046/football-retains-dominant-position-favorite-sport.aspx. 
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Football is king in the United States. According to Gallup polling, football has been America’s favorite sport to watch since 1972. Even today, 41 percent of adults say their preference is to watch football, with baseball coming in at 10 percent and basketball at 9 percent¹.   

NFL and college teams draw huge audiences on television and in person. Football games are a weekly ritual that brings friends and families together. The once-a-week schedule makes every game feel special and engenders a communal aspect that many fans believe other sports cannot match. 

Having a limited number of home games also makes football season tickets highly coveted. The most popular teams commonly have multiyear waiting lists. One way for fans to cut the line is to have season tickets transferred to them. Transferring season tickets can be a way to combine a personal legacy with a team’s legacy. Most teams, however, put limits on season ticket transfers, both before and after death. 

Season Tickets Are a Contract

A season ticket is a contract between the team and the ticket holder. Even though a fan pays for a season ticket, legally speaking, it is considered the team’s property. The team can put terms and conditions on the contract, including a ticket transfer policy. 

A season ticket “transfer” does not involve a physical season ticket changing owners. Rather, the name of the official ticket holder changes on the ticket holder account. 

Most teams allow season ticket holders to renew their tickets before the season starts and before season ticket sales open to the general public. Many fans take advantage of this policy, effectively allowing a season ticket to function as a lifetime ticket through annual renewals. 

While most season tickets cannot be left to heirs through a will or trust, many teams provide an official transfer form that allows ticket holders to indicate who is to receive their season package when they die. The form serves the same function as a will or a beneficiary designation on a financial account and should be completed in a way that aligns with the ticket holder’s estate plan. 

Season Ticket Transfer Policy Varies Widely by Team

NFL season tickets can cost, on average, between $800 and $3,000 per seat for a full season, with availability varying by team, seat location, and other factors.² Teams in high demand often have a waiting list for season packages. Season tickets are in demand at many top college programs as well. The Michigan Wolverines sold over 93,000 season tickets for the 2024 season, accounting for about 87 percent of its capacity.³ 

How these tickets can be transferred varies from team to team. Some teams have an open transfer policy that allows the ticket holder to control the season ticket’s destination without limitation. Others have a limited transfer policy that restricts a ticket holder’s right to transfer season tickets only to immediate family members or at the team’s discretion. Typically, the transfer process occurs in the offseason when season ticket renewals take place, but some teams do allow transfers during the regular season. 

Teams may also have a policy regarding season ticket transfers upon the death of the ticket holder. The New England Patriots, for example, have a policy that permits transfer of season tickets after the death of the ticket holder to a family member but only with the team’s approval. 

The Denver Broncos’ policy is that only the personal representative or executor of a deceased season ticket holder may sign the transfer form on behalf of the ticket holder.⁴ Further, the Broncos limit transfers to spouses, children, siblings, and parents. ⁵

NFL season ticket waiting lists can be long. In 2023, the waiting list for Green Bay Packers season tickets had nearly 140,000 names on it.⁶ The renewal rate was more than 99 percent. ⁷

Green Bay permits transfers to qualifying heirs upon the death of a season ticket holder using the Packers-approved transfer form and the ticket holder’s will.⁸ Green Bay allows only one individual to own season tickets, so if the deceased person leaves their season ticket to more than one child—and the children cannot agree on the new owner—the ticket reverts to the team. 

There is also a wide range of season ticket transfer policies in college football. The Oregon State Beavers’ policy is that the season ticket holder on record can transfer “the opportunity to order season tickets” to a spouse, domestic partner, or child.⁹ However, tickets cannot be transferred to a trust. ¹⁰

Alabama season ticket transfers are permitted only in the case of the death of the ticket holder and only to the deceased person’s surviving spouse.¹¹ Alabama requires a copy of the deceased’s death certificate and a seat transfer agreement signed by the surviving spouse. ¹²

Teams that have a policy about postdeath season ticket transfers do not always announce it publicly. The only way to learn whether a team has such a policy and how it works may be to contact them or consult their website.

Transferring Season Tickets May Require Proactive Legal Planning

The love of sports is a simple pleasure that a family can share. But transferring season tickets is often complicated. Every team has its own transfer policy, and the terms and conditions can easily run into multiple pages of legalese. 

If not properly planned for, passing season tickets from one account holder to another can lead to family infighting every bit as fierce as an on-field rivalry, especially in markets with devoted fans and long season ticket waiting lists. In one such case, a mother sued her son for allegedly stealing Washington Redskin season tickets from her at the peak of the franchise’s success.¹³ 

Transferring season tickets during the ticket holder’s lifetime can help avoid conflicts. Clients should at least know what their transfer options are and take proactive steps now, such as contacting the team and completing a ticket transfer form that can be stored with other estate planning documents, to ensure a smooth handoff after their death. Give us a call to learn more about ways we can ensure that all of your clients’ affairs are in order.

1. Jeffrey M. Jones, Football Retains Dominant Position as Favorite U.S. Sport, Gallup (Feb. 7, 2024), https://news.gallup.com/poll/610046/football-retains-dominant-position-favorite-sport.aspx. ↩︎
2. The Cost of NFL Season Tickets: Prices, Value, and Availability, Medium (July 15, 2024), https://medium.com/@ticketpermit/the-cost-of-nfl-season-tickets-prices-value-and-availability-43590fb16aab. 
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3. Maceo Gifford, Michigan Football sells over 93K season tickets for the 2024 season at the Big House, SI.com (Aug. 28, 2024), https://www.si.com/college/michigan/football/michigan-football-sells-over-93k-season-tickets-for-the-2024-season-at-the-big-house-01j6dda9bpcm. ↩︎
4. Season Ticket Transfers, DenverBroncos.com, https://www.denverbroncos.com/tickets/seasontickets/transfers (last visited Oct. 30, 2024).
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5. Id. ↩︎
6. Richard Ryman, Green Bay Packers raise season ticket prices $3 to $9 per game, Green Bay Press Gazette (Feb. 22, 2023),  https://www.greenbaypressgazette.com/story/sports/nfl/packers/2023/02/22/green-bay-packers-raise-season-ticket-prices-3-to-9-per-game/69863880007. 
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7. Id. ↩︎
8. Transferring Packers Season Tickets, GB, https://www.packers.com/tickets/transferring-season-tickets (last visited Oct. 30, 2024). 
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9. Season Ticket Transfer Policy, OSUBeavers.com, https://osubeavers.com/sports/2020/1/13/season-ticket-transfer-policy (last visited Oct. 30, 2024).
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10. Id. ↩︎
11. 2023 Football TIDE PRIDE and Season Ticket Pricing, Rolltide.com, https://rolltide.com/sports/2022/12/16/tide-pride-changes-for-2023 (last visited Oct. 30, 2024).
    ↩︎
12. Id. ↩︎
13. Marc Lacey, Mother Wins Out Over Son in Redskins Tickets Dispute, Wash. Post (July 22, 1987), https://www.washingtonpost.com/archive/sports/1987/07/23/mother-wins-out-over-son-in-redskins-tickets-dispute/6f0d5f6d-2593-48ad-9c75-80e86c281f84. 
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Rain Man, starring Tom Cruise and Dustin Hoffman, was a critical and commercial success, winning four Academy Awards and two Golden Globes while becoming the highest-grossing film of 1988. A drama about odd-couple brothers and personal transformation told through a road trip motif, Rain Man also raises some estate planning issues in an entertaining way. 

Because it is a Hollywood movie, many of the legal issues are glossed over. Regardless, an important subtext of the film is how an estate plan can affect family dynamics—and the difficult decisions parents face when planning for children who have very different personalities and needs. 

Two Brothers and an Inheritance

Charlie Babbitt (Cruise), the estranged son of a millionaire, is dismayed to learn that his late father left him only a ’49 Buick Roadmaster and some rose bushes. The rest of his father’s $3 million estate is left in a trust for the benefit of a mystery person. 

That person turns out to be Raymond Babbitt (Hoffman), Charlie’s long-lost, autistic-savant brother who is institutionalized at a facility for people with developmental disabilities. The trustee of the trust, Dr. Bruner, is the director of the facility and Raymond’s doctor. 

Charlie attempts to convince Dr. Bruner that he is entitled to half the money in the trust. When that strategy fails, Charlie takes Raymond out of the facility without permission in an effort to use him as a bargaining chip. 

On a weeklong road trip from Cincinnati to Charlie’s home in Los Angeles, Charlie bonds with his quirky brother and has a change of heart. Upon arriving in Los Angeles, Charlie finds that he is more interested in caring for Raymond than getting the money and gives up his fight for the inheritance. 

Estate Planning Issues and Lessons

For parents, ensuring that children are provided for in an estate plan is top of mind, but estate planning is not one-size-fits-all. What makes sense for one child may not be suitable for another.

Sanford Babbitt, the father of Charlie and Raymond, never appears in the movie, but his actions loom large. 

We know that Charlie spent time in jail and that Sanford and Charlie had a falling out. Reading between the lines, it seems that Sanford viewed Charlie as too immature to handle a large inheritance. Charlie’s kidnapping of Raymond would seem to prove him correct. 

What to do when a child cannot be trusted with an inheritance is a common issue that parents face. It can lead to disinheritance or, in Charlie’s case, a small or insignificant gift.

While Sanford probably could not have predicted that Charlie would find Raymond and hold him for ransom, he could reasonably have anticipated that Charlie would search for the money and that trouble would follow. He might have prevented this by sharing his plans with Charlie before he died. Instead, the news came as a total shock to Charlie and may have pushed him to act irrationally. 

Sanford and Raymond Babbitt

Another of Sanford’s actions that echoes from beyond the grave—and one that appears much more reasonable in retrospect than how he handled things with Charlie—is his decision to place money in a trust with a trustee, ensuring that Raymond would be taken care of for life while not giving Raymond direct access to the funds. 

It is not directly stated in Rain Man that the money left to Raymond is held in a special needs trust. In real life, this is probably how the plan would be set up. A special needs trust can hold assets for a beneficiary without disqualifying them from receiving means-tested government benefits. 

The Babbitt Brothers

Raymond, like Charlie, could not handle a large inheritance, although not for the same reasons as Charlie. If a child does not have a disability but a parent wants to provide for them in a specific way with terms attached, they can instruct a trustee to make distributions only when those terms are met, such as reaching a certain age, remaining employed, staying out of jail, or getting sober. 

For example, Sanford could have set up a trust to benefit both of his sons and demanded that Charlie only receive distributions if he helped to care for Raymond. Becoming active in Raymond’s life could have incentivized Charlie to take a more mature course of action while bringing the brothers together. 

Charlie’s surprise at learning about a brother he did not know existed set the stage for dramatics that befit a Hollywood movie. And, while it worked out in the end for the Babbitt brothers, in reality, most parents would want to avoid such theatrics. Careful estate planning can not only help stave off family conflicts but also strengthen family bonds. 

Trust Privacy

Charlie demands that his father’s attorney reveal the identity of the mystery beneficiary but is stonewalled. He only manages to learn the truth by sweet-talking an employee at the trust office. This sequence of events touches on the privacy offered by a trust and a beneficiary’s rights, including the “right to know” (or the right not to know) certain information about the trust. 

Since Charlie is no longer a beneficiary of the trust after his specific distributions are made, he is not entitled to know anything else about it. Privacy is a major benefit of trusts. Trusts are not subject to the probate process. Wills, however, go through probate and become part of the public record. Anyone can view them and find out what assets were left to whom. Also, most states require a will and other probate documents to be served to interested parties, which usually include heirs (also referred to as next of kin).

Make It Rain for Your Clients

You can play a key role in your clients’ legacy planning by instructing your clients on how to fund a trust with sufficient assets to provide for their loved ones as they intend. You can craft different inheritance distribution plans for each beneficiary, tailored to their individual needs and situation. You can also help clients select the right trustees to manage assets for an adult child and advise the trustees in the administration process.

To discuss specific issues and strategies involving the intersection of trusts and financial planning, please contact us to schedule a time to talk. 

When you are discussing the importance of estate planning with clients, one strategy is to present statistics, such as the oft-repeated data point that only around one-third of Americans have an estate plan—despite almost two-thirds of them saying that estate planning is important.¹ 

But most people think in stories—not in statistics. Research suggests that we are about 20 times more likely to remember facts when they are part of a story.² 

One such story, the 2011 movie The Descendants starring George Clooney and based on a novel of the same name, offers estate planning lessons about trusts wrapped up in a comedic drama. 

The Descendants Movie Showcases Trustee Challenges

Clooney plays Matt King, a Hawaii attorney and sole trustee of a family trust established by his great-great-grandparents, a Hawaiian princess and an American banker. The trust’s most valuable asset is a 25,000-acre parcel of pristine coastland on the island of Kauai. The land has been in the family since the 1860s, but the trust is set to end in seven years due to the rule against perpetuities (a legal principle that prevents someone from making a will or trust that controls how property is used for an indefinite period of time). 

Matt, one of about 20 beneficiaries of the trust, is not reliant on it for income and does not want to sell the land. However, many of his cousins have squandered their inheritance and need the money. 

Worried that distributing the land to his cousins would be a “trainwreck”—alluding to the likelihood that the co-owning cousins would end up in a complicated and costly partition lawsuit—Matt must decide what to do with the land. 

Right before he is about to sell to a developer, Matt has a change of heart. He decides against selling the family’s “piece of paradise,” which his ancestors would not have wanted developed; he then has seven years to find a way to preserve it. 

Matt’s decision sets the stage for litigation between him and his cousins, who want to sell. 

Lessons about Trusts from The Descendants 

Although the family in The Descendants is fictional, the story is inspired by history and actual law. To this day, large pieces of land are still held in Hawaii by so-called Ali’i trusts, set up more than a century ago to hold the assets of Hawaiian royalty. 

Here are a few of the basic lessons from the movie that you can reference when discussing financial planning and trust administration issues with your clients: 

• The rule against perpetuities is notoriously arcane, but its purpose is simple: to prevent someone from controlling property indefinitely. Some states have abolished this rule. However, some states that have opted out of the rule against perpetuities still only allow trusts to last for a set number of years. The rule against perpetuities applies to trusts where the beneficiaries are individuals (i.e., family trusts), rather than charities (as in the case of the Ali’i trusts).
• Whenever property must be distributed among multiple family members like the land held in Matt King’s family trust, the potential for family conflict exists. The “trainwreck” that Matt King envisions centers on the likelihood of his cousins fighting over how to divide their interests in the land when they become co-owners. This situation can put tremendous pressure on a family trustee, especially one who is also a beneficiary, to remain objective in the face of family demands. 
• A third-party professional trustee or co-trustee may be better suited than a family member to navigate the types of real-life family inheritance issues depicted in The Descendants. A corporate trustee from a bank or trust company can also provide continuity over multiple generations. 
• As the sole trustee, Matt has a legal duty to carry out the trust’s purpose in a way that serves the beneficiaries’ best interests. When he asks his cousins what they view as being in their best interests, almost all of them want to sell. However, just because a beneficiary says they want something or consents to a trustee’s proposed action does not mean they cannot later sue the trustee for a perceived breach of duty if their decision was bad in hindsight. 

Turn Estate Planning into a Story that Stars Your Client

You can present a client with facts and figures about financial planning that appeal to their intellect. However, framing this information in a narrative that connects with their life story and resonates emotionally can make your efforts far more persuasive. 

Your clients probably are not descendants of a Hawaiian princess, and you would be hard-pressed to make estate planning as alluring as Clooney did in The Descendants. But you can make it more interesting, memorable, and personalized using storytelling elements in your sales pitch. 

If you have a client preparing to place family accounts or property in a trust for long-term protection, you could recommend The Descendants book or movie as a fun way to approach the topic. To discuss this and other narrative-based estate planning strategies, schedule a time to talk with us. 

1. Rachel Lustbader, 2023 Wills and Estate Planning Study, Caring (Aug. 21, 2024), https://www.caring.com/caregivers/estate-planning/wills-survey/2023-survey/. ↩︎
2. Vanessa Boris, What Makes Storytelling So Effective For Learning?, Harvard Bus. Pub. (Dec. 20, 2017), https://www.harvardbusiness.org/what-makes-storytelling-so-effective-for-learning/. ↩︎

Helping Clients Write Their Legacy Script 

A compelling case can be made that life unfolds in much the same way as a story on a screen, with each of us the star of our own movie, surrounded by a cast of characters who shape our perspectives through our interactions and shared experiences.

Humans are driven by stories. Since our earliest days, we have told tales that serve to inspire, connect, teach, and help us explore life’s most profound questions. From “once upon a time” to “happily ever after,” we cannot resist a good story. Storytelling is deeply wired into our minds and perhaps our very nature. 

Time magazine was mocked in 2006 for its choice of “You” as Person of the Year. But fast-forward to 2024, and we have terms such as “main character syndrome,” “brand storytelling,” and “customer journey.” Advisors can tap into this human propensity to organize the world into narratives that explain, guide, and give meaning to our lives by using a story-centric approach to estate planning. 

The Estate Plan as Legacy Script

Every great movie starts with a script, and every script starts with a story. 

Although each story is different, screenwriters typically follow a format that brings together three key elements: characters, conflict, and resolution. These elements, artfully woven together, create an engaging narrative that moves the story forward and, in the end, delivers a sense of closure. 

An estate plan can also be broken down into these storytelling elements to help clients visualize their life story and write their legacy script. 

Characters

You may hear someone refer to another person as “a real character.” This is meant to indicate that they are interesting or unique in some way. But it also provides a deeper insight into how we tend to view the world—and others—through a narrative lens. 

If your client is the main character in their movie, then their loved ones, or beneficiaries, may be among their supporting characters. On-screen and in an estate plan, supporting characters are just as important as the main character. They add depth to the story and are integral to the main character’s experiences. Without them, the narrative would fall apart. 

The best characters, whether main characters or supporting characters, have fully developed backstories, goals, and needs. We become invested in characters we can relate to as we learn more about their lives and the experiences that shape them. 

As advisors, it is essential that we get to know not only our client (the main character) but also learn as much as possible about their beneficiaries (the supporting characters) so that we know what motivates the client and how we can draft the best plan for their future. 

Conflict

Conflict is the foundation of any good story. It identifies the challenges the characters face, introduces tension, and forces the main character to take actions that move the story toward resolution. 

Conflicts are by their nature unpleasant and uncomfortable, which is what makes them so impactful. They are ultimately what allow viewers to become emotionally invested in a story and force the main character to grow or evolve. A conflict does not have to be bad, but it is hard to tell an engaging story when the characters have no obstacles to overcome. 

No family is conflict-free. There may be an antagonist in the family, such as an individual with a substance abuse disorder who requires special planning considerations. Maybe there is a scandalous backstory, like a child from an earlier, secret marriage who now figures into an estate plan. Or it could be more mundane interfamily squabbles over things like money, favoritism, and resentment that rear their ugly head. 

For advisors, applying the narrative element of conflict to estate planning means finding out, carefully and sensitively, potential interfamily issues that need to be addressed. 

Resolution

A story’s payoff comes in the form of the resolution, when the characters overcome obstacles, tie up loose ends, and end the story. The resolution usually takes up very little screen time relative to the time spent fleshing out the characters and conflicts, but it is what everything has been leading up to. 

Writing a strong estate plan, like writing a strong resolution, can be tricky. It involves coming up with an ending that ties the story’s other elements together and is emotionally satisfying. There’s nothing wrong with a plot twist—as long as the resolution provides a sense of closure. 

The resolution of the estate planning process is a set of documents, like a will, trust, power of attorney, and medical directive. These tools give a client peace of mind that their legacy is secure and their loved ones will be cared for after they are gone, leaving no chance of lingering uncertainty.

Lights. Camera. Estate Plan. 

Studies have found that incorporating stories into marketing makes it easier for people to relate to products and services. In fact, research has shown that storytelling can increase conversion rates by 30 percent.¹ 

Storytelling can be a powerful advisory tool that improves engagement and trust between you and your clients and drives revenue. Even if it is just a fun thought experiment or exercise, presenting an estate plan as a legacy script that stars your client as the hero in their own journey might make the planning process feel more personal. 

Advisors can think of themselves as the director of the movie, working behind the lens to interpret the script and maintain the creative vision throughout the process, from preproduction meetings to the final edit. 

Bringing a script to life requires a collective effort. If you need an assistant director when advising your clients on writing their legacy script, do not hesitate to reach out. 

1. Storytelling: The reason why it matters for conversion?, Delhi School of Internet Marketing (Jan. 13, 2020), https://www.dsim.in/blog/storytelling-the-reason-why-it-matters-for-conversion/. ↩︎

It is the best of (economic) times and the worst of (economic) times for young adults in America today. This demographic has come of age during an unsteady economy and tends to reject traditional thinking about money and financial planning. 

How can advisors reach a generation of Americans who prioritize things like “soft saving,” “work-life balance,” and “sustainable investing?” They are open to your advice—you just need to know how to speak their financial language. 

How Young People Today View Money and Finances

Members of Generation Z, born between 1997 and 2010, have a complicated relationship with finances that challenges the long-standing goals of working hard, saving money, and retiring early. 

The oldest Gen Zers turn 27 this year, while young adult zoomers are preparing to go to college or enter the workforce. Among those who are already working, their money is not going as far due to inflation hitting them harder than all other age groups.¹ 

According to a study conducted by Intuit, two out of three Gen Z adults say they are only interested in finances as a way to support their other interests. ²The same percentage say they do not know if they will ever have enough money to retire, and three in four say the current economy makes them hesitant to set long-term goals. ³

Financial Planning Strategies for Gen Z

These are some of the key investing and financial planning trends seen with Generation Z: 

• Starting financial planning younger. Seventy-three percent of Gen Zers “got serious” about financial planning before age 25, more than any other age cohort.⁴ 
• Investing sooner. Although Gen Z is investing less overall, they began saving and investing on average at age 19—nearly half the age of when baby boomers started investing.⁵ 
• Exploring opportunities outside traditional markets. Younger investors are less confident that they can achieve above-average returns solely with stocks and bonds.  Instead, they show a greater preference for alternative investments such as crypto, private equity, and direct investments in companies.⁶ 
• Taking action on their investments. A Bankrate survey found that members of Gen Z are the most active investors: 87 percent of 18- to 26-year-olds bought, sold, or withheld additional investment last year.⁷ 
• Getting advice online. Around 75 percent of Gen Z adults have relied on financial advice from social media or the internet. ⁸

What does all this mean for advisors working on a financial plan for young adults? Here are some ideas: 

• Credit cards. Gen Z is leading the way in maxing out their credit cards, indicating tight cash-flow and the need for better budgeting, such as a 60 (needs) / 20 (wants) / 20 (savings) formula. Keep in mind that most Gen Z would rather spend than save.⁹ 
• Passive investing. A long-term investment strategy that relies on buying, holding, and compounding interest is one of the best hedges against inflation.Let young adults know that passive investing almost always beats active investing,even among professional fund managers. 
• Essential savings. Gen Z is spending more on essentials like vehicle insurance, housing, and food, in part because of rising costs. They could benefit from advice about how to shop economically for what they need and make their dollars go further. 
• Paychecks. Automatic savings plans can ensure that more money is left over for essentials like rent and splurges like travel, helping them achieve the work-life balance this generation covets. 
• Estate plan. Gen Z may wish to prioritize charities in their estate plan that align with their values. 

Gen Z is set to inherit $11 trillion through 2045 as part of the Great Wealth Transfer.¹⁰ Instilling good money habits in them now can help them meet their long-term financial goals and prepare them for a potential inheritance windfall, which most say they ideally plan to use to invest and pay off debt.¹¹ 

Wealth management and estate planning are two sides of the same coin. When counseling young clients on how to meet their money goals, look for chances to explain the related need to create an estate plan to protect the investments they work hard to grow.

1. Paul Davidson, Inflation Is Squeezing Gen Z More Than Other Groups. Why Are They Bearing the Brunt of It?, USA Today (June 3, 2024), https://www.usatoday.com/story/money/2024/06/03/inflation-hit-gen-z-hardest/73901354007.  ↩︎
2. Intuit, Prosperity Index Study (Jan. 2023), https://www.intuit.com/blog/wp-content/uploads/2023/01/Intuit-Prosperity-Index-Report_US_Jan-2023.pdf.  ↩︎
3. Id. ↩︎
4. Gen Z Beginning Financial Planning Earlier Than Previous Generations, Corebridge Fin. (Apr. 4, 2024), https://investors.corebridgefinancial.com/news/news-details/2024/Gen-Z-Beginning-Financial-Planning-Earlier-Than-Previous-Generations/default.aspx. ↩︎
5. Charles Schwab, Modern Wealth Survey 2024, at 6,  https://content.schwab.com/web/retail/public/about-schwab/schwab_modern_wealth_survey_2024_findings.pdf.  ↩︎
6. Will the “Great Wealth Transfer” Transform the Markets?, Merrill, https://www.ml.com/articles/great-wealth-transfer-impact.html (last visited Aug. 27, 2024). ↩︎
7. James Royal, 9 in 10 Gen Z Investors Were Active Due to Inflation or Interest Rates: Why That’s Bad News–and Good, Bankrate (Aug. 21, 2023), https://www.bankrate.com/investing/gen-z-investors-active-bad-and-good-news.  ↩︎
8. John Egan, Nearly 80% of Young Adults Get Financial Advice from This Surprising Place, Forbes (Mar. 4, 2023), https://www.forbes.com/advisor/financial-advisor/adults-financial-advice-social-media. ↩︎
9. Serah Louis, Roughly 60% of Millennials, Gen Z Would Rather Spend Money on “Life Experiences” Like Traveling, Concerts Now Than Save for Retirement—Are They Making a Big Mistake?, Yahoo!Finance (Dec. 1, 2023), https://finance.yahoo.com/news/roughly-60-millennials-gen-z-110000580.html.  ↩︎
10. Will the “Great Wealth Transfer” Transform the Markets?, supra note 11. ↩︎
11. Julie Sherrier et al., Study: Gen Z and Millennials Plan to Use Inheritances to Invest, Pay Off Debt, USA Today (June 6, 2024), https://www.usatoday.com/money/blueprint/credit-cards/study-great-wealth-transfer-plans. ↩︎

Estate planning attorneys focus on reminding clients of two basic and interrelated points: estate planning is not just for the wealthy, and everyone over the age of 18 should have an estate plan, no matter their financial situation. 

A will is essential whether your net worth is $1 million or $100. Individuals with a higher income level and a high net worth are more likely to have an existing estate plan, and they may require additional tools in their plan to address their concerns adequately. But everyone should still have an estate plan regardless of their net worth. Unfortunately, people who do not have a will often mistakenly believe they lack sufficient assets to warrant one. 

Focusing solely on money and physical property in an estate plan ignores the many functions of a will and why even a young adult with relatively little to their name should still consider having one. 

Age, Assets, and Net Worth

The rates of people who have an estate plan in the United States have dropped in recent years. ¹Across age groups, “not enough assets” ranks among the top reasons Americans give for not having a will.² More specifically, 40 percent of respondents told Caring.com in its 2024 Wills and Estate Planning survey that they do not have a will because they do not have enough assets to leave anyone.³ That number increased by 21 percent from 2022 to 2024.⁴ 

An estate consists of everything a person owns when they die. A young person may think they do not have enough assets to warrant a will, but as far as the law is concerned, a person can have an estate even if they die with no money and no belongings. And if a young adult owns anything of any value—even if it is just sentimental value—and cares about what happens to it, they should think about creating a will. This may include a pet, vehicle, or personal possessions, such as heirlooms or memorabilia.

While parents probably have a good sense of the monetary and tangible assets their children own, their child’s online, digital assets may be less known to them but are just as real to their child as traditional assets—and in some cases, just as valuable. Young people today may hold a range of digital assets that are worth real-world money: 

• Cryptocurrencies like Bitcoin and Ethereum
• Nonfungible tokens (NFTs)
• Funds in a payment app account like PayPal or Venmo
• Money owed to them from selling products through an online store like Etsy
• Rewards program points
• Monetized content channels that produce ad revenue
• Website domain names
• Copyrighted digital works
• Online wagering and sports betting accounts

It is worth noting that a young adult may also have other digital assets that are valuable from a more sentimental perspective, like extensive photo or video libraries stored in a digital cloud. 

A Will Allows a Child to Take Charge 

For young people, developing an identity and sense of self is a big part of the transition to adulthood. This process can be strengthened through estate planning considerations that allow them to exercise control over their life and consider the big-picture view. 

Parents who want to encourage their child to create a will can start by talking to them about the first step—taking inventory and making a list of all of their items and accounts. Next, they can raise the question of what would happen to these things if their child were to pass away. 

When discussing the importance of a will, you should stress what happens when somebody dies without a will: 

• Without a will, everything a young adult owns will likely have to go through probate court and eventually pass to their parents according to state statute. Some children may be fine with this, but others may prefer that a sibling, stepparent, stepsibling, significant other, friend, or somebody else receive their belongings. 
• A charitably minded young person might also be interested in making a gift to a cause they care about. 
• Even if a child has only one specific item they want to leave to someone at their passing or only one person they want to receive all of their assets, this could be enough to warrant a will.

A will also allows someone to name an executor to settle their estate. The executor distributes a person’s assets—both digital and nondigital—based on the instructions in the person’s will and can be granted power over their online accounts. This power allows the executor to do things like log in to and deactivate social media, email, and gaming accounts; access and pay online bills; and transfer and share digital content and account access. If the person does not name an executor in a will, the court will choose one for them. Unfortunately, the chosen executor may not be their first choice. 

Debt is another point to keep in mind. Young adults aged 18 to 23 have an average debt balance of nearly $10,000.⁵ Debts are part of an estate every bit as much as assets are. Although debt that cannot be paid off because of insufficient estate assets will likely go away and will not transfer to family members, acknowledging what happens to our debt when we die can be part of the estate planning discussion. 

A Will Is a Big Step into Adulthood

After a child turns 18, they may be eager to take advantage of their new adult status. Creating a will is one of the things that only a legal adult can do. While it may not rank high on their list of priorities, they can benefit from knowing what a will is, how it works, and why it is important. 

Talking about wills entails broaching the topic of death, which could discourage a child from taking the next step. But when they are ready to take it, they should have a foundational understanding to build on and a trusted advisor they can turn to for advice. If you or your clients would like to meet to discuss the importance of an estate plan, please give us a call.

1. 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey (last visited Aug. 27, 2024). ↩︎
2. Id. ↩︎
3. Id. ↩︎
4. Id. ↩︎
5. Megan DeMatteo, The Average American Has $90,460 in Debt—Here’s How Much Debt Americans Have at Every Age, CNBC (Nov. 14, 2023), https://www.cnbc.com/select/average-american-debt-by-age.  ↩︎