The Power of a Simple Letter with your Estate
There are so many questions when you get an inheritance, and so little conversations. Guidance is rarely received.
· What should I do with all this?
· I don’t want to mess up.
· What would mom do if she were me?
· I want to honor dad’s wishes.
Typical estate planning is run by an attorney who has not experienced inheriting money themselves. They have their issues. They want to be legally, do their job with excellence, and have a primary concern for the law. That is good. I like excellent in legal documents.
However, what if the primary concern was the heir, and secondly was the law?
When heirs get cash through your estate typically there is very little instruction from the grandparents or parents. In reality it’s the attorney’s table where most inheritors learn what their parents have left to them.
Before I tease out a few solutions, here this example. When I talk to financial planners in my town of Indianapolis, of which Eli Lily is and has been one of the biggest employers, the story is the same. In other towns it’s merely company names that change.
Advisor: So help me understand what’s the goal with this Lily stock?
Client: Oh, my grandpa worked at Lily for years, so when he died I got $150,000 of stock.
Advisor: Great, what do you want to do with that cash?
Client: I don’t know. I guess I’ve just kept it around. It reminds me of my Grandpa.
Advisor: But what do you want to do with that for the long-term planning?
Client: I don’t know. Can we just have it sit there?
Advisor: Yes, but we like to talk through investing money in light of a purpose. Is this for retirement?
Client: No, not really.
Advisor: Well what is the money for?
Client: I don’t know, it just is.
Advisor: What about the $15,000 credit card with 22% interest? Do you think you could sell some of the stock to pay of the credit card?
Client: Oh no.
Same story different verse. Heirs with little expertise will freeze. When you don’t know what to do the most often course of action is to do nothing.
How to fix this?
Obviously intentional training happens over time. Involves years of preparation, much prayer, considered thought, and wise counsel. However, in the absence of all that let me give you simple fix to help smooth over a multitude of problems that could arise. (Note, this isn’t the best scenario but can help in virtually every case).
Consider writing an ethical will. A simple non-legal letter with your estate plan. It’s more personal, than technical. Run it past your legal team to make sure it doesn’t negatively impact the rest. But write something down personally.
Here are five tips.
1) Start personal, and emotional.
a. I’m writing this because, I’m proud of you. You always made me smile.
b. When I think of you my heart lightens.
c. I’ve always enjoyed our times watching football…
d. When I remember you, I immediately think of your laugh. I’ve not told you those enough, but I love your laugh.
2) Don’t fight.
a. This isn’t the time to win that argument about whatever.
b. This is the final thing they will heard from you.
3) Explain the why on your plan.
a. Especially if there are any odd provisions.
b. “I’m adding provisions to protect you against lawsuits, not because I don’t trust you. But I want to protect you. People will do funny stuff when they might have knowledge you have money.
c. “I gave you the money in trust, to help with taxes.
d. “I wanted you to have the car because…
e. “I left an account to help pay for the upkeep of the lake house. Feel free to sell it when you want. It doesn’t need to always stay in our family’s hands. We got a lot of enjoyment out of that place. Remember when you were five and…
4) Tell stories that are honest and honoring.
a. Don’t embarrass them or tease.
b. And also, don’t tell stories that aren’t fully correct.
c. But tell them positive, honoring stories that you are proud of.
5) Talk about your important values and your faith.
a. When you remember me, I hope you know Jesus has been most important to me.
b. My favorite Bible verse has always been.
c. I’m not sure I passed along this story about when you were born, but things were tight back then. I had to sell a vacuum that night to actually pay the bill to get you out of the hospital. That night taught me about hard work—a value I’m so glad you’ve inherited. I’ve seen in you when you…
Much more could be said but know this a poorly written attempt is better than the perfect words that are left unsaid. Simply put, do it. Write down your thoughts of encouragement and honor.
Don’t leave them guessing if you loved them.