Estate Planning for those you love can dramatically alter the course of your family for generations. In his last will and testament of 1799, George Washington, laid out a clear vision for his legacy. He bequeathed the “use, profit, and benefit” of his whole estate to his “dearly beloved wife Martha Washington.” He also forgave the debts of many of his family members, financed the establishment of a school for orphans, earmarked stock for what is now Washington and Lee University and made arrangements to care for others dear to him.
Clarity: Providing a Deeper Understanding of Your Intent
When you think of estate planning, you probably think of your last will and testament. However, a will may not fully convey the spirit and subtlety of your intentions.
You may want to consider the role of a “personal statement of intent” or a “letter of wishes” within your own legacy design. This document works in tandem with your will to convey a deeper level of personalization — and possibly explanation — for your heirs. This private document is non-binding. Whereas a will may become a publicly registered document under the probate laws, a personal statement of intent will be accessible only to the people you stipulate — typically your executor, trustee and heirs.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A personal statement of intent can be useful in clarifying the rationale behind the formal provisions of your will. It can serve a wide range of purposes:
- If you divided your estate inequitably, for example, your personal statement can be used to rectify the perception that you are favoring one heir over another. You can also use a personal statement of intent to defuse possible guilt over the disposition of your assets.
- If you are bequeathing long-held company stock, for example, you may want to address your heirs’ hesitancy to sell those shares.
- Finally, a personal statement can be valuable in conveying your hopes and aspirations for your loved ones in ways that don’t fit the traditional parameters of a will. For example, you may suggest that your family retain your vacation home or ranch for a period of years, using it as a place to convene multiple generations for family reunions. Or you may use a personal statement to outline the preferred care of a beloved family pet.
Katherine C. Akinc, of counsel at Brink Bennett Flaherty Golden in Austin, explains that a personal statement of intent can be an effective means of conveying a benefactor’s rationale: “Most people have thoughtful, well-reasoned explanations behind the division and distribution of their estates. However, if such explanations are not communicated, beneficiaries often leap to the worst conclusions for why Mom gifted a larger estate share to one child over another, or why property was left in trust rather than outright.”
While not everyone needs a personal statement of intent, families with nontraditional structures or inequitable distributions may benefit from the clarity and comfort they can provide. Their innate flexibility and adaptability provide benefactors with a timely and deeply personalized vehicle to relay the spirit and mindset behind a benefactor’s final intentions. Your estate planning attorney can assist you with the preparation of this statement and ensure that it functions smoothly within your overall estate-planning framework.
Customization: Honoring the Singularity of Your Intentions
A final consideration in your estate planning should be the unique nature of your legacy. Both in terms of your assets and intentions, the distinctive nature of your circumstances should be honored, in death as in life. Your wealth, family dynamics and philanthropic interests are uniquely yours. It is important to work with an adviser who appreciates the intricacies of your financial picture, as well as the subtleties of your vision and values.
When you partner with an adviser who is a fiduciary, you are working with someone who is legally bound to pursue the long-term best interests of your family. During critical crossroads, sometimes the wisest action is to forestall large-scale changes. For example, a surviving spouse will likely have different cash-flow needs following the death of his or her spouse. A thoughtful financial adviser will be sensitive to that evolving change, possibly refining a client’s portfolio allocations over time, but showing due restraint in implementing any changes. In estate planning, as in other aspects of your wealth, your financial adviser should act as a critical extension of you, your wishes and your intentions, tending to your vision with care and sensitivity.
As you think about your own estate planning needs, consider the foundational values of communication, clarity and customization within your own legacy design. Building on this foundation, you can have the satisfaction of “setting your hand and seal” to reassure your heirs, convey your final wishes, and provide comfort and consolation to the people you love.
-
What the Comcast Cable Spinoff Means for InvestorsComcast has announced plans to spin off select cable networks and digital assets into a separate publicly traded company. Here's what you need to know.
-
TJX Stock: Wall Street Stays Bullish After EarningsTJX stock is trading lower Wednesday despite the TJ Maxx owner's beat-and-raise quarter, but analysts aren't worried. Here's why.
-
For a More Secure Retirement, Build in Some 'Safe Money'To solidify your retirement plan, write it down, reduce your market risk and allocate more safe money into your plan for income.
-
Five Steps to a Mindfully Fearless CareerIf, like many women, you're struggling with imposter syndrome, try developing an athlete's winning mindset. It's as simple as facing one small fear every day.
-
Six Ways to Optimize Your Charitable Giving Before Year-EndAs 2024 winds down, right now is the time to look at how you plan to handle your charitable giving. The sooner you start, the more tax-efficient you can be.
-
How Preferred Stocks Can Boost Your Retirement PortfolioHigher yields, priority on dividend payments and the potential for capital appreciation are just three reasons to consider investing in preferred stocks.
-
Structured Settlement Annuity vs Lump-Sum Payout: Which Is Better?As the use of structured settlement annuities grows, it can be tough to decide whether to take the lump sum to invest or opt instead for guaranteed payments.
-
What to Do as Soon as Your Divorce Is FinalDon't delay — getting these tasks accomplished as soon as possible can help you avoid costly consequences.
-
Many Older Adults Lack Financial Security: What Can We Do?Poor financial literacy and a lack of foresight have led to this troubling reality. It's going to take tax policy changes, education and more to address it.
-
Winning Investment Strategy: Be the Tortoise AND the HareConsider treating investing like it's both a marathon and a sprint by taking advantage of the powers of time (the tortoise) and compounding (the hare).
