The Ultimate Estate Planning Driver? Your Perfect World
What is it about estate planning that makes you want to grind
your teeth? Estate planning doesn't have to be arduous and
stressful, yet it's avoided like the treadmill in your basement and easily put off for years, even decades. What is true is that it can
be hugely rewarding, create a sense of contentment, and it can
even be enjoyable. It largely depends on the motivation to do proactive, dynamic planning. Here, Erik Gruber, private wealth advisor with Sagemark Consulting Private Wealth Services, a division of Lincoln Financial Advisors Corp., kicks off a four-issue financial planning series of practical tools
designed to help professionals determine the true value of their legacy.
1. What is estate planning and what can you really accomplish?
2. What is an effective process to get your estate planning done, and what is
3. How do you match your goals to particular strategies?
4. What should you expect from – and how should you work with -your
Let's start talking about where you're at in estate planning with a look at the four-square Stephen R. Covey made famous in his book, 7 Habits of Highly Effective People. In this simple four-square diagram you might easily guess where planning falls in the hierarchy of everything you have to do each day. Most things "on fire" at the top of your list are in box No. 1. Then we all spend time working on urgent things that in the big scheme of things are not hugely important, box No. 2. We might work our way to box No. 3, where we find planning for your estate and your business.
How can you elevate those planning needs to box No. 1? Change the dynamic. If you understand the wonderful outcomes you can foster and create, your whole motivation for spending the time and energy will change.
Need more motivation? Consider this: Recently I sat around a conference room table with a client, his attorney and his mother's accountant. His mother had been gone for nine months and one week. The purpose of the meeting was to submit the federal estate tax return. As the son handed the accountant a check for $564,000 and change, his hand visibly trembled as he passed it across the table.
"Don, why is your hand shaking?" the attorney asked.
"I can't believe nobody helped my mother plan to avoid this. I can't believe nobody got to her. There were so many places she would rather see this money go. It's an absolute tragedy," he replied.
Her son went on to explain the power this money could have held for the causes where she spent so much time, not to mention what it could do for his own family. It was a genuinely sad moment.
What is at work in this family and in your family is more than just financial capital. There is Human Capital: Who you are as individuals and a family. Intellectual Capital: What you know as individuals and as a family. Social Capital: What you do in the bigger world of work, school and philanthropy. Then there is Financial Capital: the income and financial assets which support the growth of the other three.
Most of us tend to focus on the money. Forgive yourself; it's human nature. But try, for a minute, to focus on this instead: What is your dream for the other types of wealth your family has? What if you were to create a balance sheet for the human, intellectual, and social capital of your family? Your stories, values, heritage, reputation, spirituality and life lessons? Might that change how you view your "assets?"
Let the planning be driven by priceless things; everything else can be made to follow. In fact, Allianz commissioned a study by Harris Interactive in 2005, which found non-financial-leave-behinds like ethics, morality, faith and religion – are ten times more important to both boomers and elders with children than the financial aspects of a legacy transfer. Does this surprise you? Preserving all of that intangible wealth is hugely important to the people that love you.
Don't misunderstand this, however. Taking steps to gracefully pass on your business and reducing tax liabilities are still crucial to the plan. But these things can be done and done well if what matters most is leading the charge.
The simple truth is that what money means to you, me and everyone around us is different. It's different because our life experience surrounding money is different. The Chinese believe that when one inherits money, the person's energy comes with it. Do you think it influences the way they treat that gift?
Sure, we all buy stuff with currency, but it goes well beyond that. Your child will be a better heir, a philanthropic cause close to your heart will be a better steward, an investment person will be a better manager – if those people truly understand what your money, driven by your values, means to you.
Erik Gruber is a registered representative of Lincoln Financial Advisors Corp, a broker/dealer (member SIPC) and an insurance agency and offers investment advisory service through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor. 440 W Front Street, Suite 1, Traverse City, MI.
231.668.4147 or Erik@ErikGruber.com.