Planning for transition between generations.

[Dave McClung]

Linda and I have hired an elder advisor to help us plan for aging and end of life issues. We are finding the planning much harder than I expected. I just got a 36 page letter of recommendations. Some of them are difficult to accept.

A book I am studying, Beating the Midas Curse, says that 9 out of 10 inheritance plans fail to meet the objectives of the ones who make the plans. That is a sobering statistic, but I would say that my own observations are consistent. I have seen a lot of families destroyed by estate plans and I have seen other families destroyed by the absence of an estate plan.

Our own experience has been better. My parents did a good job of planning. It made the transition as painless as possible.

What has been your observation? If you were doing a plan in anticipation of your eventual death, what issues would you address?

[Jim Franklin]

I have named my sister as my executrix to take the burden off of Esther regarding what little insurance might be available and my cadaver to the NNU School of Nursing. Anything else can go to the Salvation Army.

[Craig Laughlin]

Would not even begin to presume to advise you on the financial part.

I'm guessing in all that material this has already been said but from a pastor's perspective the more you talk about it the better. Make clear in personal conversations what you want to happen and even better if you can do it together as a family. What I know of your family, I would guess they will handle it well but there is a dynamic and clarity that happens in a group that is different from a written document or even one on one conversations. Questions come up in a group that no one would think of individually. Then - write it down in detail. Much fighting happens over "perception" of what the person who passed would want. (Although sometimes it is just a lever to get what they want, seems less likely in your family)

End of life issues relating to DNR and when to "pull the plug" orders especially need to be communicated in person not just paper. (although they absolutely must be on paper in legal form - but you probably have that covered) This issue can be so emotionally explosive that the written word really looses it's power. This is why a group with all present is especially desirable in my opinion. It allows everyone to gauge mom and dad's intent as well as the specifics. More importantly it allows those with a more conservative approach to express their misgivings and if not get on board and least understand mom and dad's intent.

The best thing is exactly what you are doing. Start talking about it. The worst thing is to leave no instructions. This is a horrible disservices to children and can result in scars that never heal. What Christians fear most is not dying but the process of dying. The more you talk about it the better.

[Kevin Rector]

Being fairly young still and not having much in the way of net worth yet (I am pleased that I have a positive net worth) my estate planning is rather simple. My will simply states that everything I have goes to my wife if I die. She is the beneficiary on my life insurance as well. In the event that we die together, we have named a guardian for our surviving children (after talking to them of course) and a trust for each child will be established with 25% of the net worth and 25% of the life insurance money (after the estate is settled) with their guardian as their trustee. My wife's will echoes mine. One of the goals is to ensure that taking care of my children does not add a substantial financial burden to the guardian if that eventuality happens (basically we will leave the trusts with enough money to raise the children to adulthood).

I think that estate planning is a very different thing for people who are older with adult children than those who are younger with minor children. Younger people's primary concern is usually taking care of the children, older people primary concern is generally the disposition of assets.

My dad has done a good job with planning their estate. One of the keys is to keep it as simple as possible. Have an executor that have financial/legal savvy (and good morals) and clearly outline the disposition of any assets. One other thing, is to make a thorough list of all assets including any information about them that would be pertinent (financial institution names and addresses, user names and passwords needed, copies of deeds to real property, titles to vehicles, etc) and put that list in a safe place (like a safety deposit box) that the executor has access to retrieve the list if the need should arise. Keep that list updated frequently (as often as the information changes would be a good frequency).

[Bob Hunter]

Dave,

When my grandmother passed our family was torn apart by a sibling war over her estate. The estate was partially planned and some legitimate arrangements were made to insure fairness. The only problem was the attitude of the heirs. One in particular, started to bank on the inheritance and therefore made life decisions that assumed a certain dollar amount. The matter complicated by the onset of Alzheimer's disease that made it virtually impossible for my grandmother to make a rational decision. Arranging care and housing in the latter years of her life drained her savings.

Before her death, the court had to settle a dispute over guardianship, the court also ordered her finances to be handled by a book keeper. It was a mess. One of the heirs had to pay money back to the estate...and the bickering resulted in wounds that may never heal in this lifetime.

In any event, I think you can have a water-tight plan, but if heirs have immature attitudes and false expectations, then it really doesn't matter how well you plan. Take Billy Graham for example. His sons and daughters have openly disputed places of burial, legacy issues and so forth.

This verse from Proverbs taught me an important lesson: "An inheritance gained quickly in the beginning will not be blessed in the end." Proverbs 20:21

I have been named the executor of a couple of estates, and I have to remind myself that my job is not to covet another's belongings in the event they pass. My job is to carry out their will and bless others by exercising prudent judgment.

Relationships are the best investment we make on earth and they yield the highest return. All too often, that ideal gets lost when a loved one passes, especially when they leave behind a significant estate.

[Dave McClung]

Would not even begin to presume to advise you on the financial part.

I'm guessing in all that material this has already been said but from a pastor's perspective the more you talk about it the better. Make clear in personal conversations what you want to happen and even better if you can do it together as a family. What I know of your family, I would guess they will handle it well but there is a dynamic and clarity that happens in a group that is different from a written document or even one on one conversations. Questions come up in a group that no one would think of individually. Then - write it down in detail. Much fighting happens over "perception" of what the person who passed would want. (Although sometimes it is just a lever to get what they want, seems less likely in your family)

End of life issues relating to DNR and when to "pull the plug" orders especially need to be communicated in person not just paper. (although they absolutely must be on paper in legal form - but you probably have that covered) This issue can be so emotionally explosive that the written word really looses it's power. This is why a group with all present is especially desirable in my opinion. It allows everyone to gauge mom and dad's intent as well as the specifics. More importantly it allows those with a more conservative approach to express their misgivings and if not get on board and least understand mom and dad's intent.

The best thing is exactly what you are doing. Start talking about it. The worst thing is to leave no instructions. This is a horrible disservices to children and can result in scars that never heal. What Christians fear most is not dying but the process of dying. The more you talk about it the better.

Craig, our view on the DNR is colored by personal experience. Linda's mother had a heart attack and her body began to shut down. Her doctor met with the family and said, "Elderly people don't recover from this state. I recommend that life support be discontinued." The family members who were present agreed, but when the nurse started to remove the iv, Linda said, "Oh no. We don't want to discontinue hydration." About 30 minutes later, we noticed that urine was collecting in the bag. Linda called in the nurse and asked how there could be urine if the kidneys had shut down. To make a long story, shorter, Linda's mom revived and lived an additional six years.

Our observation -- some doctors are too quick to pull the plug. I wonder how many people have died before their time because a doctor advised to discontinue life support too quickly.

That is one of the issues we are discussing. Neither of us want to suffer unnecessarily, but neither do we want to give up on this live prematurely. It is a difficult issue.

[Dave McClung]

Dave,

When my grandmother passed our family was torn apart by a sibling war over her estate. The estate was partially planned and some legitimate arrangements were made to insure fairness. The only problem was the attitude of the heirs. One in particular, started to bank on the inheritance and therefore made life decisions that assumed a certain dollar amount. The matter complicated by the onset of Alzheimer's disease that made it virtually impossible for my grandmother to make a rational decision. Arranging care and housing in the latter years of her life drained her savings.

Before her death, the court had to settle a dispute over guardianship, the court also ordered her finances to be handled by a book keeper. It was a mess. One of the heirs had to pay money back to the estate...and the bickering resulted in wounds that may never heal in this lifetime.

In any event, I think you can have a water-tight plan, but if heirs have immature attitudes and false expectations, then it really doesn't matter how well you plan. Take Billy Graham for example. His sons and daughters have openly disputed places of burial, legacy issues and so forth.

This verse from Proverbs taught me an important lesson: "An inheritance gained quickly in the beginning will not be blessed in the end." Proverbs 20:21

I have been named the executor of a couple of estates, and I have to remind myself that my job is not to covet another's belongings in the event they pass. My job is to carry out their will and bless others by exercising prudent judgment.

Relationships are the best investment we make on earth and they yield the highest return. All too often, that ideal gets lost when a loved one passes, especially when they leave behind a significant estate.

Bob

Thanks for sharing. The problem you describe is one that I worry about -- I don't want my children to incur debt in anticipation of receiving money from our estate. Many people spend most of their assets as a result of their final illness. I have seen that happen in a number of families.

[Gene Tatsch]

An attorney with training & focus on "elder law" is one step.
http://www.wsba.org/Legal-Community/...er-Law-Section
We have one near us who arranged our documents, down to a laminated billfold card with contact information.
Sounds like your steps are in a similar direction.

[Bob Hunter]

Bob

Thanks for sharing. The problem you describe is one that I worry about -- I don't want my children to incur debt in anticipation of receiving money from our estate. Many people spend most of their assets as a result of their final illness. I have seen that happen in a number of families.

I have seen a couple of cases where the estate was distributed pre-death and all the remaining funds were for end of life care. But that is kinda weird if you ask me. Spending a loved one's money while still alive. But people do it. And things can be written out in such a way that all the remaining funds go to charity or to pay off debt. There are probably some tax concerns, but some people do it illegally where they divest a family in order to make them eligible for medicaid when that time comes so that none of the estate funds pay for nursing/hospice care, etc. There are laws against it, but as long as the heirs conspire and scheme together, it can work to their selfish advantage. This is why senior citizens should be very cautious about giving large cash gifts to family members while alive, the law actually says a donee can be responsible to pay it back in the event they become eligible for medicaid within 5 years of giving the gift.

[Cynthia Prentice]

Craig, our view on the DNR is colored by personal experience. Linda's mother had a heart attack and her body began to shut down. Her doctor met with the family and said, "Elderly people don't recover from this state. I recommend that life support be discontinued." The family members who were present agreed, but when the nurse started to remove the iv, Linda said, "Oh no. We don't want to discontinue hydration." About 30 minutes later, we noticed that urine was collecting in the bag. Linda called in the nurse and asked how there could be urine if the kidneys had shut down. To make a long story, shorter, Linda's mom revived and lived an additional six years.

Our observation -- some doctors are too quick to pull the plug. I wonder how many people have died before their time because a doctor advised to discontinue life support too quickly.

That is one of the issues we are discussing. Neither of us want to suffer unnecessarily, but neither do we want to give up on this live prematurely. It is a difficult issue.

Our experience with Paul's mother was similar. She was in a unresponsive state (different than coma) with a DNR and I requested that we remove the DNR. A short time after the DNR was removed she coded and they were able to keep her with her. I then noticed than when certain things were said (this was me talking to Paul on the phone) I could hear her in the background making noises. I told Paul...I think your mother is aware of what is going on. She couldn't speak, she couldn't squeeze a hand, she couldn't turn her head...but I told him to go ask her a question and have her blink once for yes, twice for no. She answered every question correctly. He informed the doctors, who assured him she did not know what was going on, but he stood firm and insisted that something be done. They backed off her medication and she "woke" up, was able to communicate, eventually able to walk and was returning to normal. Unfortunately before she was to go home she developed C-Difficile, an overgrowth of bacteria that caused toxic colon as a result of the antibiotics she had been on to fight the infection that put her in the hospital. She was not able to survive this devastating complication.

Paul and I each have medical power of attorney for the other (with back ups in case we were both incapacitated at the same time). No decisions will be made by pre order as each situation varies. It is not as easy and neatly wrapped up as pre-orders but there is a confidence that all factors will be taken into consideration before a decision is made.

[Craig Laughlin]

Our experience with Paul's mother was similar. She was in a unresponsive state (different than coma) with a DNR and I requested that we remove the DNR. A short time after the DNR was removed she coded and they were able to keep her with her. I then noticed than when certain things were said (this was me talking to Paul on the phone) I could hear her in the background making noises. I told Paul...I think your mother is aware of what is going on. She couldn't speak, she couldn't squeeze a hand, she couldn't turn her head...but I told him to go ask her a question and have her blink once for yes, twice for no. She answered every question correctly. He informed the doctors, who assured him she did not know what was going on, but he stood firm and insisted that something be done. They backed off her medication and she "woke" up, was able to communicate, eventually able to walk and was returning to normal. Unfortunately before she was to go home she developed C-Difficile, an overgrowth of bacteria that caused toxic colon as a result of the antibiotics she had been on to fight the infection that put her in the hospital. She was not able to survive this devastating complication.

Paul and I each have medical power of attorney for the other (with back ups in case we were both incapacitated at the same time). No decisions will be made by pre order as each situation varies. It is not as easy and neatly wrapped up as pre-orders but there is a confidence that all factors will be taken into consideration before a decision is made.

Yep your story and Dave's are exactly why I gave the advice that it be talked about ahead of time. Trying to be careful here but I grew up in a medical family. For every story like these there are dozens and dozens of stories of grief filled folks who interpreted normal involuntary movements as signs that the person was still there when the brain scans said no. These folks then insisted on the highest levels of resuscitation and care often for years. (Last 1/3 of my mom's nursing career was in long term care, dealt with end of life issues all the time)

My advice was not so much directed at telling folks how to come down on the issue but recognizing that a family that is not in relative agreement can be torn apart (I've watched it) if they are trying to work this out while mom or dad is laying their in a coma. The emotions are way to high. For some, pulling the plug feels like murder while for others not pulling the plug feels like torture. (I don't think either is the case but that level of emotional tension is pretty deadly to relationships)

Just have the family discussion early it may not avoid the drama but it will help.

[Sarah Smith]

You make me realize how blessed I am.

As my mom failed, with us distant geographically, she set everything up to go to my brother.

At her death, he set my "share" aside and gifted me with it, divided annually to avoid tax problems.

He didn't have to do it. But he did.

[Dave McClung]

You make me realize how blessed I am.

As my mom failed, with us distant geographically, she set everything up to go to my brother.

At her death, he set my "share" aside and gifted me with it, divided annually to avoid tax problems.

He didn't have to do it. But he did.

You should thank your brother. I am sure you have.

My brother and sister were also very accomodating when we divided our parent's estate. It is great to have that kind of relationship. I would just observe that in most of the cases I know about, it isn't the siblings that cause problems. It's the in-laws.

[Pete Vecchi]

Craig, our view on the DNR is colored by personal experience. Linda's mother had a heart attack and her body began to shut down. Her doctor met with the family and said, "Elderly people don't recover from this state. I recommend that life support be discontinued." The family members who were present agreed, but when the nurse started to remove the iv, Linda said, "Oh no. We don't want to discontinue hydration." About 30 minutes later, we noticed that urine was collecting in the bag. Linda called in the nurse and asked how there could be urine if the kidneys had shut down. To make a long story, shorter, Linda's mom revived and lived an additional six years.

Our observation -- some doctors are too quick to pull the plug. I wonder how many people have died before their time because a doctor advised to discontinue life support too quickly.

That is one of the issues we are discussing. Neither of us want to suffer unnecessarily, but neither do we want to give up on this live prematurely. It is a difficult issue.

This is the exact type of scenario that makes me hesitant to have a DNR--especially now when I am age 51. Perhaps I will change my mind if God allows me to stick around another 20-25 years and I still have that option available.

[Pete Vecchi]

Dave,

When my grandmother passed our family was torn apart by a sibling war over her estate. The estate was partially planned and some legitimate arrangements were made to insure fairness. The only problem was the attitude of the heirs. One in particular, started to bank on the inheritance and therefore made life decisions that assumed a certain dollar amount. The matter complicated by the onset of Alzheimer's disease that made it virtually impossible for my grandmother to make a rational decision. Arranging care and housing in the latter years of her life drained her savings.

Before her death, the court had to settle a dispute over guardianship, the court also ordered her finances to be handled by a book keeper. It was a mess. One of the heirs had to pay money back to the estate...and the bickering resulted in wounds that may never heal in this lifetime.

In any event, I think you can have a water-tight plan, but if heirs have immature attitudes and false expectations, then it really doesn't matter how well you plan. Take Billy Graham for example. His sons and daughters have openly disputed places of burial, legacy issues and so forth.

This verse from Proverbs taught me an important lesson: "An inheritance gained quickly in the beginning will not be blessed in the end." Proverbs 20:21

I have been named the executor of a couple of estates, and I have to remind myself that my job is not to covet another's belongings in the event they pass. My job is to carry out their will and bless others by exercising prudent judgment.

Relationships are the best investment we make on earth and they yield the highest return. All too often, that ideal gets lost when a loved one passes, especially when they leave behind a significant estate.

People may have done things with the best intentions of being "fair" yet their pre-planning decisions have been the catalyst for family problems. I'll share a couple of things I have personally seen.

One happened about 40 years ago. A woman was widowed when she was in her late 50's. She lived to be 90. She had 5 children. When it came time to distribute her estate, it was found that she had left more to the younger 3 children than she had left to the older two, because she felt she had been able to provide more for the older 2 children during their lives than she had been able to do for the younger 3. A family rift was caused because of this decision.

Another situation occurred when an elderly husband and wife, who were childless their entire lives, decided that they should quit-claim their only asset evenly between 8 nieces and nephews, who were children of three different siblings. Their asset was (if I remember the figures correctly) 40% of a house in which one of the wife's siblings lived for about the previous 30+ years. The sibling owned the other 60% of the house. The elderly husband and wife who quit-claimed their property lived about 1000 miles away from the house, had lived on the husband's disability in subsidized housing for more than 40 years. The only reason they had any interest in the house was because it had been partially owned by the wife's parents, and the wife was named in the will. Since the wife didn't want the house to become an asset if her aging brother ever sold the house, she quit claimed it, as mentioned above. Well, when the brother finally did need to sell the house because of his advancing age, but in the time between the quit claim and the need to sell the house, the woman who had quit-claimed the house had been widowed, and decided to move in with the brother into the house she had quit claimed away. And now the brother owned 60% of the house, and 8 nieces and nephews of the widow each owned 5% of the house. Both the widow, her brother, and his wife were now in advanced age and needed to move into a home without stairs, but when they tried to sell their house, they needed help raising the funds, since 1) they only owned 60% of the house and needed approximately the same amount of money the entire house would sell for in order to move into a single-story house next to their daughter. But only 5 of the nieces and nephews agreed to quit-claim their 5% of the house to the man ho needed to move--even though their 5% came directly from the man's widowed sister who was also going to move into the house next door to the man's daughter; the other 3 nieces and nephews wanted their money. And then just as the sale of the house was about to go through, it was found that one of the nephews had a lien against him, and since he owned 5% of the house, the sale was blocked until the nephew quickly decided to pay off his lien with the money he would have received for his 5% of the house.

These two scenarios both occurred with members of my extended family. One thing I have learned from it is that I really don't want anything that I may leave after my death to be jointly owned by my kids/grandkids/whomever. I think I will want all specific assets to go either specifically to specific people, and have a stipulation that all other assets be sold and the proceeds divided equally.

[Dave McClung]

People may have done things with the best intentions of being "fair" yet their pre-planning decisions have been the catalyst for family problems. I'll share a couple of things I have personally seen.

One happened about 40 years ago. A woman was widowed when she was in her late 50's. She lived to be 90. She had 5 children. When it came time to distribute her estate, it was found that she had left more to the younger 3 children than she had left to the older two, because she felt she had been able to provide more for the older 2 children during their lives than she had been able to do for the younger 3. A family rift was caused because of this decision.

Another situation occurred when an elderly husband and wife, who were childless their entire lives, decided that they should quit-claim their only asset evenly between 8 nieces and nephews, who were children of three different siblings. Their asset was (if I remember the figures correctly) 40% of a house in which one of the wife's siblings lived for about the previous 30+ years. The sibling owned the other 60% of the house. The elderly husband and wife who quit-claimed their property lived about 1000 miles away from the house, had lived on the husband's disability in subsidized housing for more than 40 years. The only reason they had any interest in the house was because it had been partially owned by the wife's parents, and the wife was named in the will. Since the wife didn't want the house to become an asset if her aging brother ever sold the house, she quit claimed it, as mentioned above. Well, when the brother finally did need to sell the house because of his advancing age, but in the time between the quit claim and the need to sell the house, the woman who had quit-claimed the house had been widowed, and decided to move in with the brother into the house she had quit claimed away. And now the brother owned 60% of the house, and 8 nieces and nephews of the widow each owned 5% of the house. Both the widow, her brother, and his wife were now in advanced age and needed to move into a home without stairs, but when they tried to sell their house, they needed help raising the funds, since 1) they only owned 60% of the house and needed approximately the same amount of money the entire house would sell for in order to move into a single-story house next to their daughter. But only 5 of the nieces and nephews agreed to quit-claim their 5% of the house to the man ho needed to move--even though their 5% came directly from the man's widowed sister who was also going to move into the house next door to the man's daughter; the other 3 nieces and nephews wanted their money. And then just as the sale of the house was about to go through, it was found that one of the nephews had a lien against him, and since he owned 5% of the house, the sale was blocked until the nephew quickly decided to pay off his lien with the money he would have received for his 5% of the house.

These two scenarios both occurred with members of my extended family. One thing I have learned from it is that I really don't want anything that I may leave after my death to be jointly owned by my kids/grandkids/whomever. I think I will want all specific assets to go either specifically to specific people, and have a stipulation that all other assets be sold and the proceeds divided equally.

Those are fairly typical mistakes.

Another typical mistake is for the lawyers who prepare the documents to assume that the entire estate is in cash. Wills often anticipate that the estate can be settled just by writing some checks.

In our case, I am an part owner in a number of different businesses. All of them are "privately held" so the shares can't be sold to the public. Assuming that I die first, Linda would not choose to be active in the businesses.