One of the more memorable chapters of our family’s history is a roughly 10-year swath during which my parents were on an estate-planning kick; it was like nothing we’d ever seen. Both had had messy experiences after their own parents’ passing and were bound and determined to spare their children the same stress.
During this period, they were relentless: “Go through the house and pick out what you want,” my mother would say after Sunday dinners, Thanksgiving Day football games or Christmas morning gift-opening. “Put your name on it.”
By the time they were done, every possession had been cataloged like artifacts in the Smithsonian Institution and the kids were well-schooled on trusts and living wills, preferred headstones and favorite hymns. They even made a game of it at times, creating elaborate treasure maps complete with cryptic clues to guide us to their hiding places for final documents and whatever valuables they kept in the house.
For as much eye-rolling as it may have caused at the time, experts say such attention to final matters is precisely what most people should do to ensure their earthly wishes are carried out after they die. And, due to the coronavirus, more people are attacking this planning with similar zeal, say local experts.
“People are more aware today,” said Jennifer Pierce, a member of Mitchell, Williams, Selig, Gates & Woodyard, PLLC in Little Rock. “I haven’t had a downtick in anything. All those drafts that I have hanging out there, now it’s time to execute. [Covid-19] has made people aware that hey, I haven’t got that done and I really do need to get it done.”
On the face of it, the importance of planning one’s final affairs is obvious. Yet it remains something most people are loathe to speak of, let alone plan for, given the central topic is their own mortality.
“I have clients that come in and this makes them weepy because they don’t want to think about death and they don’t want to think about their spouse passing away,” Pierce said. “That’s always been the case, but maybe we’re more aware of it now. People just don’t want to think about death.”
32% HAVE A WILL
According to its 2020 survey, Caring.com reported only 32% of Americans have even a will, a figure that has dropped 25% in the past three years. Middle-age and older respondents were the biggest offenders; the number of adults ages 35-54 who had a will decreased by more than 25% since last year and adults age 55 or older who had one decreased approximately 20%.
John Shram, partner at Winburn, Mano, Schrader & Shram, PLLC in Little Rock, said the coronavirus is affecting demographics differently.
“We have seen an uptick in business with the 70- to 80-year-olds, as I presume the pandemic has reminded them of the inevitability and necessity of the process,” he said. “There has been a decrease in 40- to 50-year-old estate planning clients, because many of these clients have lost their jobs or experienced significantly reduced income. They have articulated that they have to choose priorities and, of course, feeding the children and paying the mortgage take priority.”
Another statistic from Caring.com‘s survey was the growing number of people who reported they don’t have any estate planning because they don’t know how to begin the process in the first place.
“The thing I have found with a lot of clients is they say ‘Yes, we need to do that,’ but they never put it into action,” said April Pollard, a Little Rock financial adviser with Edward Jones. “I think it’s less about being squeamish about it and more about not knowing how to take the next action. It can be really scary to think about needing to go talk to an attorney to get this done and not knowing the right attorney. I think that’s what stops most people from taking the appropriate steps.”
TURN THE TIDE
The impact of the coronavirus has begun to turn the tide on those numbers for live and online services. One of the world’s largest financial advisory firms, deVere Group, saw a 76% increase in the demand for wills in the last two weeks of March alone. Gentreo, an online estate-planning platform, reported weeks of triple-digit week-over-week growth among users, and Fabric, an online insurance and financial advising service, saw life insurance applications and online wills jump 50% between mid-February and mid-March.
These numbers aside, Shram said individual life events tend to be more motivating than global ones, but a pandemic certainly doesn’t hurt in moving people to action.
“My experience has been that prompts to plan are more personal — a newly blended family, a recent death of a parent or spouse, an unfavorable diagnosis, a looming nursing home admittance, a child with substance abuse issues, a special needs grandchild,” Shram said. “But major events like 9/11 and [covid-19] undoubtedly serve as a reminder that [life’s] mortality rate remains constant at 100%.”
To many, estate planning may sound grandiose, suitable only for sizable estates and vast assets. In reality, the process is applicable to almost anyone, including those at or near the federal poverty level. Nonprofit organizations Legal Aid of Arkansas, based in Rogers, and Center for Arkansas Legal Services in Little Rock help hundreds of low-income individuals seeking a will every year.
The scope of a well-crafted estate plan is also much more comprehensive than just distribution of assets, going well beyond wills or trust documents to address matters of end-of-life care, funeral arrangements and settling accounts with banks, insurance companies and investments.
“A lot of times, folks don’t think about what all of their assets are until I sit down and go through a laundry list of things,” Pierce said. “Checking accounts, you can add payable on death, or POD language. Brokerage accounts are the same. Your stock and mutual funds that are held at Edward Jones or Smith Barney or somewhere, those you can add a transfer on death, a TOD.
“A lot of people haven’t thought about their funeral. Are you going to write your own obituary or let your kids you haven’t seen in five years write it? If you know you only want a graveside service and you want ‘Rock of Ages’ sung, then you need to write that down.”
Pollard said health directives can also be overlooked.
“Something people need to think about is a living will,” she said. “A living will says this is what I want to happen to me in the hospital; I do not want to be resuscitated, I don’t want to be intubated, or I do want those things. Having that clearly written out is very important so that your loved ones don’t have to worry about how you want the hospital to treat you during those times. It’s all written out really clearly.
“You also need to think about what do I do in my day-to-day life right now? Paying your bills: a lot of people forget to put this information in writing because they don’t think about what they’re doing right now. They think about what happens after they pass away. Well, there could be a time of incapacitation and those bills need to be paid.”
The modern era has brought additional considerations. As the internet continues to infiltrate all aspects of society, it presents specific challenges when life comes to a close.
“Digital assets are unquestionably becoming a bigger issue,” Shram said. “Not merely the PIN for the debit card or the email password but the log-in information for each bank account, credit card account, social media account, Amazon account, online directory containing photos and other documents. Trust and/or will documents need to specifically contemplate authority and access to these sections and there is now a state statute as well that can be incorporated as required.”
Done well, an estate plan provides executors an easy-to-follow road map in such matters. A plan done poorly or left incomplete complicates and delays settling of the estate exponentially, which is why many experts strongly recommend going through a professional versus the do-it-yourself route.
“I realize that my recommendation to hire a specialized estate planning attorney is self-serving,” Shram said. “But I have seen so many cases firsthand where do-it-yourself documents or even documents drafted by a general practitioner attorney did not result in the client’s wishes being carried out, caused great disappointment or even litigation that ended up costing many times more than what a well-drafted plan would have cost.”
WHEN I DIE FILE
As the coronavirus has pushed more people to get their final affairs in order, it’s also given rise to the When I Die file. This recommended assemblage of documents, instructions and other final communiques provides a comprehensive, ordered collection of directives. From planned funeral arrangements to instructions on how many death certificates to order to the long-held family secret pecan pie recipe, a When I Die file can greatly ease the burden on survivors during a very difficult time.
“Final arrangements is an area in which clients frequently tell us, ‘I’ve told my children what I want,’ yet all too often, children forget what they were told, either due to the innocent passage of time or due to a disagreement with the directives given,” Shram said. “After someone dies, there are often a number of questions that have to be answered virtually immediately, which are difficult and emotional.
“In addition to providing people answers to these difficult questions, people can use the kit to communicate to their loved ones the names and phone numbers of their estate planning attorney, CPA and financial adviser, each of whom can provide some assistance following the client’s death. Some clients actually write letters to their children to convey their thoughts and desires moving forward after their death.”
Amy Daniels of Little Rock learned early from her parents the importance of estate planning, something she has carried forward into her own life. But it has only been in recent years that she has gained an appreciation for what a well-crafted plan, discussed frequently and frankly at regular intervals, can do for a family during a difficult time.
“My father has been diagnosed with a pretty bad disease and it has really escalated our family meetings and family conversations,” she said. “It’s been really, really interesting to see how our family dynamics have risen to the top out of this illness.
“We, as family members, know what our roles are and how we do them, but we had to develop into those roles. I always say you’ve got to get everybody on the bus, but you’ve also got to make sure they’re in the right seats.”
Daniels said in addition to specific written directives, this process must include frank and frequent conversations by family members.
“The big thing people need to consider is, they need to know this [plan] is going to adapt and change,” she said. “And as far as the information, you’ve got to tell your kids where it is and what their role is. If you don’t, they’re going to carry a big box into their attorney’s office and say, ‘I don’t know what to do with this.'”
Knowing the benefits of discussing the inevitable has made difficult conversations easier to conduct, Daniels said, but she acknowledged it’s not the norm for many families.
“I would say control the things you can control,” she advised. “If your parents aren’t willing to share information for whatever reason, and I think it happens a lot, I would say one of the best things to do is start your estate plan. Get your house in order. Understand where you’re at and then say, ‘Hey, Mom and Dad, this is what I’ve done. This is where I’m going. If there’s anything that you have done that could be counterproductive to it, would you share that with me?’
“You know, if you think a fire is coming, you get ahead of it and you back-burner it. So, if you can control the things that you can control in life, and that’s all we can really truly do, then be proactive in creating your own plan and sharing it.”
And most of all, Daniels said, no matter the family dynamic or health of relationships, don’t wait to start.
“We talk a lot about wealth in life, but a proper estate plan, a proper family plan if you want to call it that, goes beyond the money,” she said. “It goes to the heart of the heritage and the legacy of who families are and what they’re trying to achieve.
“But you have to have a plan to do it. You can’t just hope that it will work out.”
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