Category: The Wealth Counselor

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. 
   ↩︎
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. 
   ↩︎

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. 
   ↩︎
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).
   ↩︎
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. 
   ↩︎
7. Id. ↩︎
8. Transferring Packers Season Tickets, GB, https://www.packers.com/tickets/transferring-season-tickets (last visited Oct. 30, 2024). 
   ↩︎
9. Season Ticket Transfer Policy, OSUBeavers.com, https://osubeavers.com/sports/2020/1/13/season-ticket-transfer-policy (last visited Oct. 30, 2024).
   ↩︎
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. 
    ↩︎

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.  ↩︎

High School Seniors Can Use a Starter Estate Plan (Advisor Letter #1)

As summer fades into fall and school resumes, millions of seniors are entering the home stretch of their high school careers and marking their official entry into legal adulthood at age 18. 

According to cognitive scientists, some individuals’ brains do not finish developing until they are in their late 20s or early 30s, and many parents would be quick to agree. But in the eyes of the law, when a child reaches 18, they can vote, get married, sign a mortgage, join the military, move out of their parents’ home, and do many other things that only adults are allowed to do. This also includes creating an estate plan. 

While an 18-year-old may not need as many tools in their estate plan as adults further down the path of life require, they should at least have the foundational documents that address the new reality of their legal independence and the fact that their parents can no longer manage their affairs for them without their written consent. 

Turning 18 and the End of Parental Authority

Parents never stop being parents. No matter how old our kids are, we feel the need to nurture and protect them. 

Once a child reaches age 18, however, the law limits how involved parents can legally be in their child’s life. Parents no longer have the right to access their child’s financial and medical records or make decisions for them in an emergency—regardless of whether the child is still in high school, covered by their parents’ health insurance, or receiving monetary assistance from their parents. 

Parents who are unaware that their parental authority is severely limited after their child’s 18th birthday could find themselves helpless to intervene if their child suffers an accident and certain legal documents are not in place. Or maybe a child plans to enter the military or travel abroad when they graduate. Whatever their plans are, they should have a few basic estate plan documents when they turn 18. 

Estate Plan Documents Every 18-Year-Old Should Have

The point of discussing accidents, disability, and incapacity (a person’s inability to manage their affairs while they are alive) is not to scare parents and young adults unnecessarily but rather to stress the importance of estate planning for a young adult who will soon be graduating high school, starting the next chapter of their life, and entering the real world. 

Being an adult involves taking on greater responsibility, self-advocating, and addressing uncomfortable possibilities head-on. One of these possibilities is that something could happen that requires a parent—or somebody else—to step in and make decisions for them. 

Powers of Attorney

A power of attorney (POA) allows an adult child to appoint someone else to act on their behalf concerning the circumstances laid out in the document. Depending on state law, POAs can take effect immediately, at a future date, or upon a certain condition being met (e.g., incapacity due to injury or illness). They can be broad in scope or limited only to those actions and types of decisions specified in the document. Also, states have different rules governing POAs, and more than one form may be needed if a child is changing their residence to a different state than their parents.

• A medical power of attorney allows an adult child to designate another person to make medical decisions for them when they cannot communicate their own wishes. For example, it could allow a parent to direct treatments and consult with the physician regarding their child’s care in a medical emergency. 
• A financial power of attorney grants a designated person the authority to conduct financial and legal matters, such as paying bills, filing taxes, and managing banking and investment accounts, on another’s behalf. 

Advance Directive/Living Will

Young people can sometimes feel invincible. Contemplating mortality, and planning for it, comes with age. 

One way to plan for a health crisis is with an advance directive or living will, which is a set of instructions that a person uses to outline their healthcare wishes if they suffer a debilitating medical condition and are unable to communicate. It will specify life-extending medical treatment preferences, such as whether they want a feeding tube, artificial hydration, or a breathing machine to keep them alive. 

These tools are commonly confused with a DNR (do not resuscitate) order. DNR orders are not typically included within an estate plan but are instead executed within specific medical facilities like hospitals or assisted living facilities. 

Advance directives are not legally recognized in all states, but where they are, they can provide helpful guidance to the person acting under a medical power of attorney.

Health Insurance Portability and Accountability Act Waiver 

As either a separate document or included in a medical power of attorney, a Health Insurance Portability and Accountability Act (HIPAA) waiver grants named individuals access to the adult child’s protected health information. Parents will likely need to be named in a HIPAA waiver even if their child is still covered under their health insurance.

What Can Happen If an Adult Child Does Not Plan for the Unexpected?

Without these documents, state law will choose an adult child’s decision-maker—most likely a parent. Although this could be whom the young adult would also choose, it takes time for a court to put decision-makers into effect. In an emergency, where every second counts, the family might not have any time to spare. 

It could also be the case that the child is estranged from their parents and does not want them to be authorized decision-makers. The parents may find this hurtful, but the choice belongs to the young adult.

The months ahead present a huge opportunity for advisors to work on an estate plan starter pack that includes POAs and related documents with any clients who have children approaching adulthood. If you or your clients would like to discuss this starter estate plan for new adults, give us a call.

Every client, regardless of the size of their estate or their age, can benefit from a will that gives legal effect to their inheritance plan. Even if they have a trust to manage asset distributions, a trust cannot address every estate planning consideration. Wills have limitations as well, but they belong in a comprehensive estate plan.

What a Will Does—and Does Not Do

Wills, along with trusts, powers of attorney, and living wills, are some of the most basic estate planning documents. A will states how someone (the willmaker) wants their assets (accounts and property) to be passed down when they die.

• It names who the beneficiaries are and how much they will receive. 
• It also names an individual (the executor or personal representative) who oversees paying off debts, distributing assets, filing all necessary paperwork with the probate court, and filing the appropriate tax returns.
• In addition to naming an executor, a will can name a guardian to care for the willmaker’s minor surviving children. 

These are the primary functions of a will, but it is equally important to understand what a will does not do. 

• A will only governs the disposition of assets held individually in the willmaker’s name without a beneficiary designation at the time of the willmaker’s death. 
• A will cannot dispose of assets that are owned jointly or governed by beneficiary designations or other contracts. Beneficiary designations on life insurance policies and retirement plans take precedence over a will, as do payable-on-death (POD) and transfer-on-death (TOD) designations on bank accounts. 
• Wills do not provide for incapacity planning. 
• Wills only take effect upon the willmaker’s death but can be revised any time prior to death, as long as the willmaker has the required mental capacity.

What the Client Owns Could Play a Role

Whether or not a will is an appropriate estate planning tool for a client may depend on the type and amount of assets the client owns. If most of what the client owns will be distributed according to a beneficiary designation, POD or TOD designation, or by operation of law due to joint ownership, a client may look at a will as a safety net in case there are assets that end up having to go through probate. If your client has modest accounts or property, the client may be okay with their loved one receiving their inheritance outright and may think that putting too many restrictions will eat into the inheritance being left behind. It is important to remind clients like this that they will be relying on the beneficiary designations to distribute their assets, so their designations need to be up-to-date.

Some Clients Want an Easy Solution

Although a will has its limitations, some clients are interested in estate planning tools that are easy to understand and that will be quick to put into action. With a will, the client is leaving instructions for what will happen at their death. Once the will is signed, the client retains ownership of their assets, and no additional paperwork is needed to put their plan in place (with the possible exception of updating beneficiary designations if changes need to be made). Compare this to a trust-based estate plan, in which all or most of the clients’ assets will need to be retitled to make the trust the new owner after the plan is signed.

A Third Party Can Be a Good Thing in Some Instances

While most people value their privacy and would not want the details of their assets and beneficiaries made public, using a will and having beneficiaries go through the probate process can sometimes be a good thing. If the client believes that there will be fighting among family members, going through probate allows a third party (the judge) to oversee the proceedings and make sure that everyone is on their best behavior. If the client is worried that their family will be too lazy to manage things on their own, probate can provide the required structure, timelines, and oversight to ensure that all the required tasks are completed in a timely manner.

The Importance of Financial Advisors in Estate Planning

Recent survey data shows 7 out of 10 Americans say that estate planning is important—yet just 26 percent have an estate plan.¹ The survey also found that working with a financial advisor is the largest variable in whether someone has an estate plan.² 

While estate planning strategies change over time, the documents that comprise a plan are tried and true. Wills can be thought of as the foundation of an estate plan that, when used strategically with other documents, supports a strong and lasting legacy. 

The ease and simplicity associated with setting up a will is a major selling point that can help to dispel the notion that estate planning is overwhelming or intimidating. Once a client has a will, you can steer them toward additional estate planning services that synergize their financial and legacy objectives. 

If you or your clients have questions about wills and estate planning, please reach out and let us know how we can help. 

1. New FreeWill survey data: a look at Americans’ views of estate planning and how it fits into overall financial planning, giving intentions, PR Newswire (Apr. 23, 2024), https://www.prnewswire.com/news-releases/new-freewill-survey-data-a-look-at-americans-views-of-estate-planning-and-how-it-fits-into-overall-financial-planning-giving-intentions-302123963.html. ↩︎
2. Id. ↩︎