In my conversations with Darren Wallace, my favorite Fiduciary, we covered a lot of topics. Two areas I wanted to make sure I discussed with him are what tips he has for people planning their trusts/estates, as well as what red flags he has for family members to keep an eye out for. Darren has some great suggestions and guidance.
Tips from a Fiduciary
- Make a List of Your Accounts
- This should include the account name, where it is held and who the contacts are (if applicable). When my parents passed away, my sister and I had a pretty good idea of what all the accounts were and how to connect with them. But there was no list, which would have made it much more helpful. For my own benefit, I am planning to make a list of my own accounts now. It’s just one less thing to have to remember!
- Get a Trust
- Having a trust will save you a lot of money in the long run in estate fees. If you don’t have a trust and have to go through probate, a number of things happen. Firstly, probate costs are ridiculously high and can’t be avoided. Additionally, when you go through probate, everything becomes a public record. So if you want to retain any privacy, you definitely need a trust. Finally, with probate there are statutory fees. Whoever is administering the estate gets a fee that’s a % of the estate. This is usually 3x as high as serving as a trustee).
- Keep Your Trust Updated
- Don’t set it and forget it with your trust. Things change. You could buy things, sell things, divorce, marry, etc., and you need to be sure that you are keeping your trust updated with your life. An un-updated trust can cause further problems and confusion for trustees and successor trustees.
- Always Have Multiple Successor Trustees
- Speaking of successor trustees, you want to have multiples. You never know what’s going to happen to your trustees. They could fall ill, die or be unable or unwilling to take on the role when the time comes. Ultimately, the role could be abdicated, so it’s important to have a line of succession (think of it like succession to the throne). Another option to consider is to write into your trust a way for a successee to be appointed. This way there’s a mechanism if your predefined successors are unable or unwilling to take on the task to have the role filled.
Darren shared with me a number of horror stories about situations he’s encountered in his own practice or heard about from others. None of these stories ends well. All result in someone or some family losing a lot of property and/or money. I asked him if there were typical warning signs that family members should be looking for, and he provided me with a few.
Red Flags to Be Aware Of
- There’s Someone New
- Anytime a senior has someone new in their life, there should be a watchful eye. Especially if that someone new is quite a bit younger. While not all of these relationships are nefarious, it is good to take a close look at who the new “friend” is and understand their intentions as much as possible.
- Solicitation Anxiety
- We’re all familiar with the email scams that go around about the friends stranded in Europe needing some money. The “IRS” calling (with very thick, foreign accents,) to say you’re being investigated. The alleged grandchild phoning to say they’re stuck in Mexico and need some money. Most of us just roll with this and block the callers/emailers and move on. It’s when you start seeing an elderly family member becoming very agitated and worked up about these scams that you want to raise your awareness. This can be a sign that their state of mind is a bit off and they are more vulnerable to manipulation.
- Writing Checks to Random People
- This one is fairly self explanatory. If there are checks going out to people you’ve never heard of, it’s time to engage with your family member and figure out what’s going on. This could tie into either of the two points above, or could be another sign of a state of mind issue that causes risks to their well being.
Keep in mind, working with a Fiduciary can help with all of these tips and red flags. If you plan and prepare early on in life and have the right experts you’re working with, this can all be pretty easy for you and your family members/successors. Don’t put it off because it feels like a “icky” topic, be proactive and plan for your life and legacy.
IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.
Don’t want to miss any posts? Sign up now!