Category: The Wealth Counselor

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. ↩︎

One of the most common reasons clients think they do not need a will is that they do not have enough assets. High-net-worth clients tend to be more proactive about estate planning. However, misconceptions about wills abound, which is a big reason many Americans do not have a will. Misunderstandings about what a will can and cannot do may also be holding a client back from creating—and making the most of—this basic yet crucial estate planning document.

Common myth #1: Wills can be used to avoid probate. 

Most clients prefer to minimize state involvement in their personal affairs. This preference can be used to motivate them to create a will and avoid dying intestate, an outcome that leaves the fate of their estate in the hands of the probate court and state inheritance law.

It should also be stressed that using a will alone is usually insufficient to avoid the probate process entirely. Most states have abbreviated or “shortcut” procedures for probate estates worth under a certain threshold set by state statute and for those estates without creditors. However, most estates are worth more than that lower threshold amount or have creditors and, therefore, will be subjected to the full probate estate proceedings.  

It is important to note that probate is not necessarily a bad thing. It does cost money in attorney fees and court costs and can delay distributions to beneficiaries, but it can also ensure that an estate is administered accurately and legally.

If clients strongly prefer avoiding probate, they may be interested in strategies to circumvent the process, such as using trusts and beneficiary designations on certain accounts and policies. 

Common myth #2: A will cannot be used for tax planning.

Tax planning involves significant overlap of financial planning and estate planning. 

With the federal estate, gift, and generation-skipping transfer (GST) tax exemption amount set to decrease sharply at the start of 2026 and revert to pre-2017 levels, tax planning discussions are taking center stage in many advisors’ offices. Proposals to decrease the exemption have some clients worried and may justify employing advanced estate planning strategies now, ahead of the 2026 sunset.

Prior to the current era of super-high exemptions, trusts were frequently used in estate planning to reduce or eliminate estate, gift, and GST taxes. These strategies are still generally available today, but wills can also be used for tax planning. 

Trusts can be created by an individual during their lifetime or upon their death according to the terms of their will. The latter are known as testamentary trusts, a type of irrevocable trust created at the willmaker’s death. Unlike other trusts, testamentary trusts are subject to probate. The estate executor sets them up once the probate court has verified the will’s authenticity.

Testamentary trusts can be structured in various ways that may be utilized for estate and GST tax planning: 

• A qualified terminable interest property (QTIP) trust is established for the benefit of the willmaker’s surviving spouse. Assets transferred into a QTIP trust qualify for the unlimited marital deduction, mitigating estate taxes due upon the first spouse’s death. However, this may only defer estate taxes owed until the second spouse passes away. 
• The decedent can leave their entire estate (or a large part) to their spouse. The surviving spouse can then disclaim or say “no, thank you” to some or all of their inheritance from their spouse. This disclaimed portion goes into a bypass trust (which can go by many different names such as credit shelter trust or family trust), which can benefit the surviving spouse (and others chosen by the deceased spouse) during their lifetime but will not be included in the surviving spouse’s estate at death. This trust may be created to use the willmaker’s lifetime exclusion amount at their death instead of the unlimited marital deduction. 
• Because the GST tax exemption is separate from the lifetime estate and gift tax exemption, clients can take advantage of it with advanced will-based planning by creating generation-skipping trusts to allow more resources to flow to younger beneficiaries without having to worry about additional estate taxation at each generation. 

The creation of tax-saving trusts with will provisions can be quite complicated in practice, but your clients should know that will-based estate plans have a place in tax planning. 

Common myth #3: Creating a will is cheaper than creating a trust. 

Creating a basic will might be cheaper than creating a basic trust, though it is not an apples-to-apples comparison. 

Ultimately, it comes down to how complex the document is. Trusts tend to be more complex than wills and, therefore, are typically more expensive to prepare. However, trusts and wills can contain similar provisions that require a comparable amount of time to research and draft properly. 

The costs of creating the plan are just one cost factor. Postdeath administration costs also need to be factored in. Because wills are subject to probate, they may be more expensive to administer, especially if they contain provisions ordering a testamentary trust to be created. 

Cost is a consideration in every estate plan. So, the client must engage in a cost-benefit analysis. It is also important to understand the potential costs of not having an estate plan. The same analysis should apply when trying to reduce costs using online planning tools or cutting corners on a plan that deserves a higher level of thought and detail. Estate planning is not an area where it pays to save money. 

We recommend that clients refrain from becoming fixated on a set price that they want their estate plan to cost. It will be better for them in the long run to adjust price expectations based on the size and complexity of their estate and their needs. Unless a client is truly cost-constrained, in which case a simple, low-cost will is better than no plan at all, the budget should reflect a client’s particular circumstances and goals. 

The More You Know, the Better You Can Serve

Estate planning myths are helpful for identifying areas where a client could benefit from additional information and education. The more educated you are about estate planning, the more you can help clients recognize gaps in their plans and offer actionable solutions. 

We have only begun to scratch the surface of how estate planning intersects with financial planning on matters like wills, trusts, probate, and taxes. Many of the issues raised in this letter can—and do—fill entire books. To learn more about these topics and discuss specific strategies, please get in touch.

A Financial Advisor’s Guide to Navigating Different Types of Wills

Advisors should understand why most Americans do not have even the most basic estate plan in place. Advisors should also pay attention to the validity of wills for those people who do have a will or are engaged in the estate planning process. Will contests are surprisingly common, and nontraditional wills such as handwritten and oral wills, as well as do-it-yourself wills prepared without an attorney, may be less likely to meet legal requirements. 

Why Fewer Americans Are Making Wills

If you want to nudge a client toward creating a will, you need to understand why they have neglected this task—and what could inspire them to take action. The top reasons cited for not having a will in a recent Caring.com survey¹ are 

• procrastination (43 percent),
• a belief that they are too poor or do not have enough assets (40 percent),
• unsure how (16 percent), and
• costs too much (16 percent).

Respondents who say they do not have a will are made up of various ages and races and have a range of incomes and educational backgrounds. There are also different ages, genders, and income levels among those who reported what finally motivated them to create a will. But, unfortunately, among all groups, 23 percent said nothing would motivate them to get a will.² 

Types of Wills

A will is a legal document that states how a person wishes to pass down their assets (money and property) when they die. A will should reference the beneficiaries who will receive the deceased’s assets, how much each beneficiary will receive, who will administer their estate and wind down their affairs, and, if they have minor children, who will serve as their guardian (and backup guardian). 

Ideally, a will is typewritten and signed by the willmaker (the testator) and two or three witnesses (depending on state law). Additionally, it is recommended that the testator engage the assistance of an experienced estate planning attorney to help ensure that the will meets all applicable legal requirements. An attorney can also help navigate through potential issues that could otherwise lead to a will contest in the future.

Some states allow handwritten wills (known as holographic wills) and oral wills (known as nuncupative wills). 

• A holographic will is handwritten and signed in the testator’s own hand, and it may not require witnesses to be valid. Requirements vary in states that recognize holographic wills. 
• A nuncupative will, informally referred to as a “deathbed will,” is stated orally, usually in a recording or to a witness. Most states do not recognize oral wills as valid; if they do, only certain people under limited circumstances are allowed to use them. 

Why would somebody create a handwritten or oral will instead of a traditional, typewritten one? Often, it is because they have not yet created a formal will, and an emergency forces their hand. Sensing that time is of the essence, they either jot down their wishes or tell them to a loved one, hoping that their loved ones will follow their instructions after they have passed away.

Potential Issues with Oral and Handwritten Wills

Informally created wills can raise numerous issues. Such a situation famously occurred with the estate of Aretha Franklin. The Queen of Soul had a handwritten will that was recognized in her home state of Michigan. However, difficulty deciphering her intentions due to scribbles and hard-to-read passages led to a lengthy legal dispute among her heirs. 

This is a major issue with handwritten and oral wills: they are more prone to containing mistakes and ambiguities that cause confusion or lead to extensive litigation. The validity of holographic and nuncupative wills can also be harder to prove. 

It is up to the court to validate a will. If the court does not accept the offered will, state law—rather than the testator’s wishes—could dictate how estate assets are divided among loved ones. 

An unclear will can also lead to an heir contesting it. Research suggests that up to 3 percent of all wills in the United States are contested in court.³ Will contests undermine the testator’s intent and can deplete estate assets and turn loved ones against one another. 

Beyond Simple Wills

Planning how your money and property will be passed down to your loved ones is the most fundamental function of a will. Even the most basic will includes provisions naming a personal representative, beneficiaries, and guardians of minor children. A will can also include more advanced planning provisions that provide more context and details about distributions, such as instructions for pet care or for an inheritance left to a minor child or other individual who may need their inheritance managed and safeguarded for a period of time or indefinitely. 

A will is a must-have estate planning document for anyone 18 or older. It just scratches the surface, though. Clients, especially those with larger estates, should also consider a revocable living trust to manage their assets without court involvement, powers of attorney that provide trusted decision-makers the authority to make financial and medical decisions on the client’s behalf, and a living will (if allowed in your state) that gives instructions about medical care and end-of-life decisions. 

Financial Planning for the Present and Future

Working together, we can bring greater effectiveness and continuity to clients’ big-picture financial goals of investing, saving, tax strategies, estate planning, philanthropy, and legacy. Collaborating ensures we are serving the best interests of our clients.

To discuss how we can help you use estate planning considerations to deliver a better client experience, build loyalty, and introduce new revenue streams, please reach out and schedule a meeting. 

1. Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited Jul. 31, 2024). ↩︎
2. Id. ↩︎
3. Margaret Ryznar & Angelique Devaux, Au Revoir, Will Contests: Comparative Lessons For Preventing Will Contests, 14 Nev. L. J. 1 (Jan. 15, 2014), https://scholars.law.unlv.edu/cgi/viewcontent.cgi?article=1525&context=nlj. ↩︎

It is a scenario we have all dreamed about: discovering a hidden treasure trove tucked away in the dusty corners of an attic. 

But it was not gold coins or heirloom jewelry that an Ohio man found in a box that had belonged to his grandfather. It was a collection of vintage baseball cards for legends like Ty Cobb, Honus Wagner, and Cy Young that experts valued at $2 to $3 million.¹ 

The card owner’s heirs agreed to sell most of the cards at auction and divide the money equally, avoiding a potentially messy legal battle over ownership rights. Things could have gone much differently, though, and they often do when valuable personal property is not accounted for in a client’s estate plan. 

Sports Memorabilia Is a Multi-Billion Dollar Industry

Stories about a father or an uncle grumbling that their mom threw away their baseball card collection that would now be worth millions are something of a trope. But they might actually be true. 

The sports memorabilia market has never been bigger. Collectors’ items like cards, photos, clothing, and tickets, once the domain of hobbyists, are now part of an industry that is valued at more than $26 billion and is expected to top $227 billion by 2032.² 

Sale after record-breaking sale have driven the market for historic sports collectibles to new heights. Individual items, including a Michael Jordan game jersey and a Mickey Mantle card, have recently sold for more than $10 million.³ Many more have eclipsed the $1 million mark. 

According to the Robb Report, the sports memorabilia industry is becoming comparable to the art market, “replete with appraisers, ratings agencies, authenticators, specialized insurance, leased vaults, and elite security systems.”⁴

Amid the growing interest in, and increased value of, sports memorabilia, a Manhattan man sued his mom for not handing over two baseball cards he claims could fetch $25,000 apiece.⁵  She contends that her son actually gave her the cards because she was a fan and that according to her will, her grandchildren will be receiving them.⁶ 

How to Handle Valuable Sports Items in an Estate Plan

Assuming that a client-collector’s mom has not disposed of their cherished sports collectibles as many moms do when cleaning out their grown children’s left-behind childhood memories, they will need to be “disposed of”—that is, distributed or transferred, legally speaking—in the client-collector’s estate plan. 

Sports memorabilia is considered tangible personal property, just like jewelry, furniture, and other household items, for estate planning purposes. An estate plan can deal with tangible personal property in a few different ways: 

• Gift all tangible personal property to a single beneficiary or multiple beneficiaries through a will or a trust. 
• List specific items in a will or trust and who will receive them.
• Use a memorandum of tangible personal property that lists who will receive certain items. This document is separate from a will or trust but is usually referenced in the client’s will or trust as providing the instructions for what will happen to the client’s tangible personal property.
• Donate the collection to charity. 

Because a sports memorabilia collection can also have sentimental, nonpecuniary value to a client, it could fall into the category of estate items that the client may want left to nonfamily beneficiaries, such as a friend who is also into collecting baseball cards. 

Instead of distributing sports collectibles to family members who might not be interested in them—but would not mind inheriting their cash value—another option is to sell the collection and distribute the proceeds to those named in the client’s will or trust alongside other assets as part of the client’s estate. 

Memorabilia can also be gifted during a client’s lifetime so they can see the items enjoyed while they are alive. However, depending on the value of the item, this could trigger a gift tax and would count against their lifetime estate and gift tax exclusion. 

What Can Happen If There Is No Plan for Sports Memorabilia

Due to insufficient planning, a client’s family could end up finding binders and boxes full of sports memorabilia after the client’s death. They may not be sure what the items are worth, what they meant to the client, or what to do with them. 

With or without an estate plan, sports memorabilia can slip through the planning cracks. Consider these potential scenarios for a sports memorabilia collection that is not specifically planned for: 

• A will could address tangible personal property generally but fail to account for sports memorabilia specifically, so it would get lumped in with other items like clothing, books, and pictures—and could be left up for grabs among several beneficiaries. 
• If no mention is made of the sports memorabilia in the estate plan, the client’s family may see the items as worthless and either donate or throw them away.
• When a client does not have a will, their assets—both tangible and intangible—are subject to probate. In this scenario, the probate court distributes a client’s assets in accordance with state succession laws. The law will determine who gets what, how much, and when they will receive it.

Counseling Your Clients on Their Sports Memorabilia Collection

Fans love sports for the drama. To avoid any drama over a client’s memorabilia, however, you should advise them to protect their collection now and in the future by taking the following steps: 

• Make a detailed inventory of all important sports memorabilia and regularly update it.
• Consider getting the items appraised and authenticated and potentially insured.
• Inform their loved ones about where they keep their collection. If any part of the collection is stored in a safe, a safe deposit box, or a storage unit, the client should make sure a trusted loved one will have access to the items after the client’s death.
• Inform their loved ones about how and where items can be sold in case their loved ones do not want to keep them.
• Ensure that they have enough insurance to protect the items in case of damage or loss.
• Understand the tax implications of selling, gifting, and inheriting valuable items. 
• Create an estate plan that spells out who will receive their memorabilia and other tangible personal property. 

To discuss sports memorabilia estate planning strategies in more detail, please reach out to schedule a meeting.

1. Ohio Man Finds Batch of Vintage Baseball Cards in Late Grandfather’s Attic, May Be Worth $3 Million, Mass Live (July 10, 2012), https://www.masslive.com/news/2012/07/ohio_man_finds_batch_of_vintag.html.  ↩︎
2. Sports Memorabilia Collectibles Market Size, Statistics, Growth Trend Analysis and Forecast Report, 2022 – 2032, Market Decipher, https://www.marketdecipher.com/report/sports-collectibles-market (last visited June 27, 2024). ↩︎
3. The Most Expensive Sports Memorabilia and Collectibles in History, ESPN (Sept. 15, 2022), https://www.espn.com/mlb/story/_/id/34465725/most-expensive-sports-memorabilia-collectibles-history.  ↩︎
4. Christina Binkley, How Sports Memorabilia Exploded into a Booming Billion-Dollar Business, Robb Report (July 30, 2023), https://robbreport.com/shelter/art-collectibles/sports-memorabilia-raking-in-millions-at-auction-1234865811.  ↩︎
5. Kathianne Boniello, Man Sues His Mom over Pricey Baseball Cards, N.Y. Post (Jan. 15, 2022), https://nypost.com/2022/01/15/man-sues-his-mom-over-pricey-baseball-cards.  ↩︎
6. Id. ↩︎

Residential real estate is the largest asset class in the United States. Beyond its primary function of providing shelter, housing provides a store of wealth and increases individual economic growth. A residence—particularly a vacation property—can also have sentimental value to a family. 

Second homes are traditionally associated with wealthy Americans, but research shows that vacation homes are no longer just a luxury for the rich. This means that more of your clients than you think may benefit from a discussion regarding planning for multiple homes. The finances and feelings tied up in a vacation home can present unique estate planning challenges when a client is making plans to pass the home to the next generation. Family dynamics, ownership structure, taxes, and more need to be considered in the transition.

Vacation Homes: A Source of Wealth—but Not Just for the Wealthy

Andrew Carnegie famously said that 90 percent of millionaires got their wealth from investing in real estate. Those who are already millionaires are increasingly investing in second homes. Having more than one home is now the norm for wealthy Americans. But it is not only wealthy Americans buying second homes. 

According to a recent survey, 4 out of 10 Americans now own vacation homes.¹ The National Association of Home Builders puts the national stock of second homes at 7.15 million, accounting for around 5 percent of all housing.² 

Investing in a vacation home can be surprisingly affordable. Most survey respondents reported paying less than $200,000. And the return on investment can be impressive.

Vacation Home Estate Planning Strategies

While real estate often accounts for a large share of a client’s net worth, their second home may also be where family gatherings take place. Estate planning becomes more challenging in situations where a treasured family asset changes hands. This can be doubly true when the “treasure” is both tangible and intangible. 

The first step in formulating an estate planning strategy for a vacation home is to determine the client’s goals. The following questions can help guide your discussion: 

• Are they ready to pass the vacation home to their loved ones now, while they are alive, or are they planning to transfer it when they die? Their preference may depend on how much time they still spend at the property and whether they think their loved ones are ready to take on the responsibility and expense of managing it. 
• What is their preferred method for transferring the vacation home? Some options include selling it to a loved one, gifting it to them, passing it down through their will, using a transfer-on-death deed, or placing the home in a trust. Each of these methods comes with different tax savings and liabilities. 
• Who will have an interest in the property? The more family members who have a right to use the home, the more detailed the planning should be. Without a structure that addresses issues like who is responsible for paying for upkeep, taxes, and insurance, and without defining property usage rules, co-ownership rights and responsibilities could become unclear, leading to conflicts. 
• Do they want to set any limits on what can be done with the vacation home? The client, for example, should consider whether the vacation home can be used as a rental, if family members have the right to sell the vacation home or their interest in it to people outside the family, and conditions for one family member buying out another’s interest. 

Once you define your client’s goals for the vacation property, you can help them come up with appropriate planning strategies. During your discussion, address the following additional considerations: 

• If the property is mortgaged, they may need permission from the lender to transfer it.
• A trust can allow the client to maintain control by enabling the client to set rules about how the property is to be used and maintained. They can also transfer money into the trust to pay for ongoing expenses. The trust can be designed so that the client retains the right to use the vacation home until death, at which point it passes to their loved ones. 
• Clients can also establish a life estate that allows the vacation home to be transferred at their death while allowing them to continue using it until they die. 
• A business entity such as a limited liability company (LLC) or family limited partnership (FLP) could be created to own the home and potentially provide some asset protection.
• Clients need to consult with a tax professional to ensure that federal gift, estate, and generation-skipping transfer taxes; income and capital gain taxes; state-level estate and inheritance taxes; and state and local property taxes applicable to transferring and owning the property are properly considered in the vacation home succession plan. 
• Vacation homes in another state or country pose additional estate planning challenges and will likely necessitate local counsel or advisors. 
• If there are children who are not interested in owning the vacation home, the client may want to consider how they will equalize their children’s inheritances if treating everyone equally is an estate planning priority. 

Connect with Our Family of Estate Planning Advisors

It might seem like a simple decision to keep a vacation home in the family. But estate planning is rarely straightforward. Deciding how to handle a property that has served as a past gathering place—and hopefully a future one—can prove to be especially complicated. 

Whether a vacation home has been in a client’s family for generations or just a few years, it needs to be thoughtfully addressed in their estate plan. For advice on counseling clients about vacation home legacy strategies, reach out to our estate planning attorneys.

1. Andrew Lisa, 40% of People Have Vacation Homes: Where You Can Find One for Your Budget, GoBankingRates (June 16, 2023), https://www.gobankingrates.com/investing/real-estate/where-to-find-vacation-home-in-your-budget. ↩︎
2. Na Zhao, The Nation’s Stock of Second Homes, Nat’l Ass’n of Home Builders (May 13, 2022), https://eyeonhousing.org/2022/05/the-nations-stock-of-second-homes. ↩︎