You know you should have a will–but WHY?

Originally published CNBCYou’ve surely heard the sad news that music legend Prince has died, and you likely caught the fact that he did so without leaving a will. This high-profile case of apparent negligence has rekindled the collective finger wagging over having the correct estate planning documents. But the question remains—WHY?

I had the opportunity to answer this question recently on the Today show, but I wanted to further explore the topic in the hope of providing some additional, actionable clarity:


Statistics suggest that a majority of Americans don’t have a will. And, after reading hundreds of these documents, I’ve found that even most people who do have a will have one with sub-optimal language they don’t understand.

Why don’t we do a great job planning for our death?

The Most Important Love Letters You’ll Ever Write

Originally in ForbesYou don’t want to write estate planning documents because you don’t love meditating on the prospect of your own death.  Sure, you might think you’re mature enough to face that eventuality and plan responsibly to care for anyone or anything you might leave behind.  But even if you’re perfectly cognizant of your own mortality and confident of a secured eternity north of the border, you may not rank a discussion on splitting up your worldly assets and responsibilities with an attorney particularly high.

But your estate planning documents aren’t for you.  Think of them as the most important love letters you’ll ever write.  Find inspiration in knowing that you’re caring for the people and causes you love, even if you’re not here anymore.

The most important recommendation in every financial plan is successful completion of thoughtfully prepared estate planning documents.  So, no matter your age (unless you’re still a minor), marital status or net worth, you need to be considering how to write your WILL, DURABLE POWER OF ATTORNEY and ADVANCE DIRECTIVES.

Here is an estate planning crash course in the form of three videos addressing each primary document in under 90 seconds.  Enjoy!  (Then, act.)

 How to Create a Will in 90 Seconds or Less


How to Create a Durable Power of Attorney in 90 Seconds or Less


How to Create Advance Directives in 90 Seconds or Less

The Most Important Financial Planning Recommendation for Young Parents

Young-family-portraits If you queried a score of financial planners and hit them with the question, “What is the most important financial planning recommendation for young parents?” I bet 19 of them would mention something about investing, retirement planning, insurance, education planning or tax planning.  But the most important financial planning recommendation for young parents isn’t even completed by a financial planner, but instead, an attorney.

If you’re a parent with minor children, the most important planning strategy you can employ is to have a will written and a guardian established for your children in the will.  The guardian is the person charged with the day-to-day care of your children, effectively becoming their new parent.  If you fail to designate who should hold that penultimate office, your state of residence will decide for you.  Do you trust them to make the right decision?

There are at least two other officers you should appoint in your will—the personal representative (AKA executor) and the trustee.  The personal representative (PR) has the relatively short-term job of walking your estate through the probate process.  You want to choose an anal retentive (for lack of a better term) person who will follow the steps necessary to complete the detailed checklist to close your estate.

The trustee is the designee second in importance only to the guardian.  While the guardian is responsible to raise your children, the trustee is responsible to fund their upbringing.  Before you mistake the need for a trustee in your will as an optional estate planning feature reserved solely for the silver spoon crowd, let me assure you the vast majority of youngish households should be seriously considering the creation of a trust in their will and a trustee to manage it.  I’m not talking about a “trust fund” here but a testamentary trust, a vehicle not birthed until you and your spouse are no more.

The testamentary trust may not exist until you don’t, but you write the rules for it in your will.  It is likely to receive the bulk of your estate—your home and life insurance proceeds—and since most families with a proper level of life insurance will have a testamentary trust with over a million dollars in it, it is important to deliberate over the instructions you give for the trust’s use.  Many wisely give the trustee broad “HEMS” provisions, allowing for distributions supporting health, education, maintenance and support. Additionally, consider scheduling principal distributions over several years—for example, you may distribute one third of the principal at age 25, half at age 30 and the remainder at age 35.  You’re protecting the money both for and from the child.  After all, what would you have done with a million bucks at the age of 21?

A logical question many pose is, “Shouldn’t I just name one person for the personal representative, guardian and trustee?”  After I disclaim that I’m not an attorney and don’t wish to be misconstrued as one offering “legal advice” (an offense punishable by law) I may respond that I prefer to see the person best suited for each office named.  For most of us, it is not one person alone who is an optimal fit for each of the important designations in your will.  Is the person you trust most to actually raise your children also the most financial savvy and detail oriented?  Even if the answer is yes, you may still consider the benefit of having a healthy wall of separation between the guardian and the giant bucket of money in the testamentary trust created under your will. 

It’s not that investing, insuring, education planning, retirement planning and tax planning aren’t important—in fact, they have the highest probability of impacting your life and the lives of your family members, while the guardianship and trustee provisions in your will are unlikely ever to be exercised.  But in the unlikely case that you and your parental partner are both taken from this earth in an untimely fashion, you’ll make that transition much more peacefully knowing someone you trust is designated to care for your offspring and their financial wellbeing.  More succinctly, you can’t write a will after you’re dead.

90 Second Finance…The Bucket Plan

The "technical" term I use most in educating about personal finance is… BUCKET.  It’s useful in so many areas of financial planning.  You put your money into checking account buckets and set-up various budget buckets.  You contribute money to a 401(k) bucket during your working years and then take money out of that bucket in retirement.

This video is 90 seconds of instruction on the primary decisions you face in creating the optimal Will…the document you should have properly written before you KICK the bucket!