Love and Estate Planning
A friend of mine who is in her forties just lost her husband, the love of her life, after only a few years of marriage. They planned on a long and laughter-filled adventure together. Then one afternoon he died suddenly of a heart attack. In that one moment, everything changed.
Their marriage was fairly new and their plans all fresh. Why would they ever think of something as terminal-sounding as estate planning? There is no will, there are no trusts, no final words. He was just gone. Now so many questions to be asked and so much tedious work to be done. On top of her crippling grief, she has to deal with the horror of probate, of endless paperwork, cold forms and heartless bureaucracy, courtesy of our tax code.
For the record and because it is Friday and because I just feel like having a good rant, (I know, I know, as if that is novel for me) I will never understand how the death of a loved one is viewed as an opportunistic time to take hard earned savings away from a grieving family, but such is the insanity of the tax code, (with potentially the exception of 2010). The only rational explanation for it must be some sort of misguided class warfare coupled with business opportunity. It should come as no surprise that one of the biggest lobbyist groups fighting against any repeal of estate taxes is the insurance industry. I am horrified at the massive amount of time and resources that are used to deal with estate taxes. Millions of hours are wasted by accountants, attorneys, and life insurance brokers that could otherwise be spent in productive endeavors that would actually contribute to our nation’s GDP, rather than being wasted trying to decipher a tax code that even the IRS admits no one on their payroll fully understands! And now, perhaps because Congress wasn’t having nearly enough fun making us guess what regulatory rabbit they’d pull out of the hat next, we’re in this bizarre one year repeal of the estate tax, followed by a drop to a $1,000,000 exemption level from $3,500,000 in 2009, with the vague threat of a retroactive tax keeping executors and trustees in the hot seat. It’s been a hell of a cat-on-a-hot-tin-roof kind of year for those of us that work in the estate planning/tax world.
Alright, enough ranting, I’ll get back to my point. No matter what your age or life status, unless you really don’t care what happens to the wealth you’ve built, which is perfectly acceptable for some, estate planning is an absolute must to at the very least make life a little bit easier for those you love if something awful were to happen to you. Any adult ought to have at a minimum, a “living will” to ensure that if you are incapacitated, your life is handled they way you choose; a will that lists your major assets and to whom they ought to be given; and if married, a living trust to maximize your estate tax exemption for your heirs and make sure that your wishes are honored if your spouse goes wacky after losing you.
Admittedly I’m naturally a “hope for the best, but make darn sure I’m covered in for the worst” type of person, so perhaps this is less uncomfortable for me than others. Estate Planning ought to be viewed as a way to cherish and protect those you love and ensure that your life is honored as you choose, not treated as inconsequential by a cold and indifferent bureaucracy.
