What I Wish My Mom Had Done In Her Estate Plan

This talk covers the biggest estate planning mistakes families regret after a parent passes away, and how a little upfront planning can save time, money, and family conflict. It focuses on protecting inheritances, organizing assets, and choosing the right people to be in charge so the process stays simple, boring, and drama-free.

Transcript

Hello, everybody. It’s Peter Klenk. Klenk Law here to talk again about death and taxes and estate planning—all that fun stuff. All that fun stuff. Good to talk to you again.

Today, the subject is something I hear about from our probate department when people tell us that they wish their parents had done a little bit of planning. So it’s titled, “What I wish my mom had done in her estate plan.” But really, we’re talking about anybody, right? Things to prepare. Things that we see after somebody dies that, in hindsight, of course, should have been done.

So some general things. Now, there’s a lot more glitches, but some easy things here—the low-hanging fruit—I’m happy to talk about. And one of the things is the biggest thing, let’s put it, is that parents die and they just leave the money outright to the kids. And there’s often a lot of regret for that from the kids.

And you might say, well, it’s simple. What’s the beef about here? Some free money—like, go for it. But you don’t know everything that’s going on with your kids. Maybe that marriage isn’t quite as good as you thought it was going to be. Maybe they’re having money issues you don’t know about. Maybe there is a health issue.

So the problem with leaving money directly to people is once it becomes theirs, it’s available to creditors. It’s part of the divorce. It’s gonna affect alimony calculations. At death, they might have a will that says, “I’ll leave everything to my spouse,” and now they have this inheritance, and everything to spouse includes the inheritance.

And it’s uncomfortable having a conversation with your spouse to say, “Yeah, I’m gonna change my will, and I’m giving that money to the kids and not to you, because that was from my mom or my dad.” That’s an uncomfortable thing, and it’s easy to put off uncomfortable things. And then your money ends up with the daughter- or son-in-law, and then ends up with their new spouse, and there you go.

People look back, and there’s lots of regret there. So yeah, setting things up so that they go in trust. If you’ve heard my other blogs, you know I’m a big proponent, because really, they’re inexpensive to set up. They’re easy to run, and they give you tons of protection. There’s just no downside to these things if you set them up the right way.

So if you were thinking about just leaving your kids assets anyway, you can set it up and say, “Well, I leave your share in trust for you.” You leave the kid be the trustee. It’s free to run. They’re the beneficiary. If they wanna take it out and give it to a spouse, of course they can.

But now, see, all these other things are taken care of. If they get divorced, it’s not theirs. It’s not part of the divorce. It’s not part of the alimony calculation. If they get sued, go bankrupt, it’s safe. If they die, it can be set up to go on for the grandkids, right?

So now they don’t have to have that weird, uncomfortable conversation with their spouse about not giving them the inheritance. And we can be very flexible with that, by the way. There’s lots of ways where they can include them if you want them to, so that they can give them money over time and do a brainstorm about it.

But you can kinda see, if you don’t do this, they can’t do it themselves. So that’s probably the number one thing.

The next thing is just a basic thing: organization. Letting them know where stuff’s at. We can do a probate and it can be super easy, or it can be complicated and interesting. You don’t really want to be an interesting probate. You want your probate to be boring.

And part of that is just organizing your things. Now, we help you with that if you come to us. Just making a bullet point of where to go, where your assets are. Because if you think about it, do your kids really know where your bank is? Do they really know where all your money is at?

Maybe they do, but you understand that there are a lot of people out there whose kids have no idea where mom and dad have their money. And if you die and they don’t know where your life insurance is, they don’t know where your automobile insurance is—you died in an accident—how do we even put a claim in?

All those things make it more difficult through the probate, which means more expensive and time-consuming. So a lot of regret is just that mom and dad didn’t take the time to make a short list of where their assets are at. Like, easy.

They don’t need your passwords. They don’t need your Social Security numbers, your account numbers. I just need to know where your church is at, what bank you go to. Now, if you work with us, we do that for you. We have a section in your documents that we share in your portal, and we jokingly call it “Who do we call when you’re dead?” But that’s exactly what it is. It’s that bullet point.

Right? I just use PNC. Like, if that’s where you bank, we put on PNC. They don’t need your accounts. They don’t need your passwords. Now your kids at least just know where to go find your CDs and your checkbook.

Or you can imagine your automobile insurance, your homeowners insurance, your life insurance, who’s got your 401(k). You’re in case of work, but you roll it into an IRA, and your kids don’t know where you moved it. All those things just make it so much easier. And so much easier means cheaper and simpler.

So that’s a key thing to kind of put together.

And then the other thing is, guys, kids really do want you to really think through who’s gonna be in charge of things. You gotta know your kids. I say kids, but if you don’t have kids, your siblings—whoever you’re dealing with. Who are you picking to be in charge?

Because in their hearts, hopefully, anyway, they all really want it to be organized. But if you pick all three kids and they don’t really get along, or there’s one who just, by their nature, drags their feet or is very hesitant to make decisions, and now that person is being pressured by their siblings to make a decision that makes them very uncomfortable, this is not good for the relationship.

So it’s better for everybody involved if you really think through who you’re putting in charge. And again, a lot of people, especially when we get older, man, we just don’t wanna deal with this crap. I’m just saying, right?

And then we got that one kid who’s needling us: “Put me in charge. Put me in charge.” That’s probably not the kid to put in charge. Put somebody else in charge, right? You don’t want the one who’s just dying to be in charge so they can tell their siblings what to do.

You want them—it’s my catchphrase—you want them all to be able to have Thanksgiving together after you’re gone. Just stomach being in the room with each other for two hours. This is the victory. Anything over that’s gravy, like on the turkey, right?

This is all good stuff, but you wanna tee things up so that you’re avoiding conflict. And, you know, taking the time to do that. And I know you’ll be dead—it won’t bother you, all that stuff—but it really helps them, at the end, still be able to have a nice relationship. And that’s a big goal.

And some people just don’t. They put people in charge, and it gets to be kind of a messy thing.

So anyway, those are three things. Basic things. There’s more if you get into the details we can talk about if you call us up. We help you with your plan.

But those are key things you should think about. And we don’t want any regrets, right? We want them to be able to have this process be easy, boring, simple, and be done.

So give us a ring. Like and subscribe. That way, if I put new things out, you can see it. It’s been great talking to you. I look forward to our next talk, and you guys all take care. Bye now.