How to think more (pragmatically) about Death and Estate Planning
Article By: Paula Johns Cappello Rowe Lawyers Griffith
Australian artist Brett Whitely was infamous as a man of extraordinary talents; however drafting wills and secure storage of the same were clearly not among them. The firestorm that engulfed his estate in the aftermath of his death is an estate planning cautionary tale for so many reasons; not the least because the Supreme Court of New South Wales ultimately admitted a “lost will” to probate that no one could definitely prove existed in the first place. Perversely, one of the key reasons the will wasn’t stored safely was because by all accounts Brett Whitely balked at the prospect of paying lawyers to properly prepare and store the will, the end result creating the kind of uncertainty and expense that would have made the initial fees look like peanuts.
Estate planning rule number one – will the will actually work?
The thing is, estate planning is not actually about a will. It is not a detached exercise in contingency planning but rather but a practical act of envisaging what this inevitable milestone will actually mean for your loved ones.
It is no coincidence that the people with the best and most pragmatic ideas about their own estate planning are also the people who have landed in the middle of some kind of post-death legal difficulties often with their own cautionary tales of trouble and woe. Having weathered the legal storms that all too frequently accompany death they seem to me remarkably self-aware about taking informed and well-formulated steps to prevent the same problems enveloping their own families in the event of the inevitable.
Many of the best estate-planning lessons I have learned were not grounded in legal textbooks or case law but in the lived experience of the grieving.
Sometimes, the failures of estate planning are failures of imagination; that is the failure to contemplate the likely descendants of your impending mortality. To put it plainly, perhaps you have a plan but have you pressure tested it and how will it actually work?
I expect that many of you have sat in the office of your lawyer and reviewed the tick-list of items on the estate planning agenda (you know, executors, beneficiaries, guardians for the kids) but have you really thought it out?
To do so involves visualisation of the possibility of your early (or late) demise; how might life look in the days, weeks and years following your death.
Consider the following (non-exhaustive) points:
- The Estate Plan – this is not only about a will. You are likely to be at your most vulnerable if you are alive but incapacitated (in which case a will won’t help). Think carefully about whom you would trust to manage your legal and financial affairs by discussing and implementing an enduring power of attorney document. Consider appropriate limitations remembering always that subject to various legal obligations, your attorney can stand in your place and do anything you can do. In my experience some of the most common forms of financial elder-abuse involve an ill-considered power of attorney.
- Consider also whom would be best placed to make decisions as regards your medical, health and lifestyle needs if you can’t make these for yourself.Be aware that it’s not just the “life or death” decisions that your enduring guardian can make for you; it’s also decisions around where you live in terms of care facilities. Again I find the clients with a background in acute medical care have the best ideas and directions for implementation in their enduring guardianship documents.
- Advanced care directives are also a good instrument for dealing with end of life care; however, my considered view is that these are best formulated by medical professionals. Most legal practitioners do not have the specialist knowledge to understand the minutiae of palliative care, pain relief and tiered medical contingency planning.
- Remember also that appointing attorneys, executors and enduring guardians is not a popularity contest.It should be a considered exercise of assessing the strengths and weaknesses of those in your sphere of influence.
Engage a legal practitioner with whom you feel comfortable having difficult discussions and who will take the time to understand your concerns and help guide you through the key legal principles.
- Ground Zero – the days and weeks after your death:
- Don’t assume that just because you have the big issues sorted (who gets what) the smaller issues won’t create angst. The early days can be consumed with in-fighting between relatives regarding issues of religiosity, means of disposal (brial versus cremation). Ultimately it’s your executor (if you have a will) who has the authority to make these decisions so choose well and ensure they are aware of your wishes.
- Bills bills bills – just because you’ve passed on, it doesn’t mean the bills will stop arriving. Be aware that any bank accounts in your sole name will be frozen. If you are the primary cardholder, your credit card may also be frozen cutting off an often vital source of credit for your dependents. If you have a spouse, consider having a joint account with sufficient reserve (if possible) to ensure your spouse and/or family won’t be left stranded. A funeral insurance plan might also be a good way of minimising the financial impact of death as this is frequently the greatest financial impost on your loved ones.
- Be aware that the “reading of the will” is a bit of a Hollywood thing. It’s not necessarily the case that there will be a group broadcast of the contents of your will. The more likely scenario is that your beneficiaries will be notified of their entitlement (either by your executor or your lawyer).
If there is anything controversial about your will, it’s important to have a considered conversation about whether you should disclose the contents of your will. Ordinarily your will is private until your death and even then only certain people are allowed to ask for a copy of it.
There are very good reasons both for and against disclosing the contents of your will if there are likely to be disappointed beneficiaries but these need to be carefully weighed. Disclosure can result in elderly relatives being bullied into changing their will or trotted off to the various factional camps’ lawyers or threats of withdrawal of care, contact, affection and/or support.
On the other hand, it’s not always a great idea to leave it to your executor (who might be your grieving spouse) to have to justify any controversial decisions to treat beneficiaries differently (remembering always that equality among children is a relational risk-management tool, rather than a legal requirement). The last thing anyone needs is an almighty fight with their son or daughter because of something you did in your will. Maybe leave an explanatory document or in some circumstances have the hard discussion now.
Your Ongoing Legacy
How does your will fit with your imagined legacy? Whom do you want to ultimately benefit from your wealth?
If you feel strongly that your wealth should remain in the hands of your lineal descendants, consider the barriers to this possibility, the most prominent of which being the rights of the “unknown future spouse of your spouse” over those of your adult children (statistically speaking, if there is going to be a fight, this will be how it plays out).
By far, this is the most difficult and awkward conversation an estate planning lawyer can have. Encouraging your clients to consider the possibility that their spouse may re-partner in the event of their death is confronting to say the least. If nothing else, accept the reality that if you cultivate dependency in a spouse, you’ll likely have a strong moral and legal obligation to provide for them and this obligation is likely to affect any inheritance you wish to end up in the hands of your children.
Perhaps the most salient point is that estate planning is not about having a “will” per se but having a plan. No plan is complete without due consideration of the worst-case scenario. There are plenty of good estate planning lawyers out there. If you haven’t done so already, I’d encourage you to look for one and not view your possible end as someone else’s problem.
We’d also invite you to come and meet with us if you have neglected your own estate planning (and whether you are eighteen or eighty). We are always happy to help with the difficult discussions and many great plans start with difficult discussions.
Paula Johns is senior associate at Cappello Rowe Lawyers and has a Masters in Wills and Estates. Apart from being highly skilled, her clients seem to really appreciate her approachable manner and frequently demonstrate this by baking incredible treats.
If you would like more information on protecting trade marks or need some advice, please contact us on 02 8325 1520 or email firstname.lastname@example.org