“Your family’s money philosophy needs to undergird lessons about the mechanics of money because the mechanics of money are very simple–it’s just math. It’s the mindset, trauma, emotions, experiences and fears we entangle with money that make financial management such a fraught issue,” Liz Frugalwoods so thoughtfully observes. Frugalwoods was offering advice to parents of young children; similar logic applies, Salt Lake City attorney Marianne Ludlow believes, to the estate planning process involving parents of adult children. Citing an Ohio University study showing that “an astonishing 33% of all beneficiaries lose their entire inheritance within two years of receiving it, Ludlow strongly advocates “passing on your wisdom with your wealth.”
In fact, “if a family is to flourish for multiple generations, the attention to human capital should be as serious as that paid to financial capital,” Ellen Miley Perry writes in VettaFi Advisor Perspectives. No abstract concept, this “passing on of wisdom” is woven into the fabric of an estate plan:
- Someone who values hard work will not create an estate plan that allows heirs to live a life of idleness.
- Those who value compassion and service will likely pass assets to charity.
Importantly, Perry notes, the next generation may embrace parents’ values, but express those values in a way that differs from that of their parents. Families can respect real differences and still foster a commitment to each other.
One lesson many elders may want to pass on to their children, both now, during this time of great stock market volatility, and as a guide for the future, relates to investments. “Your first reaction during a time of market volatility may be to panic. Don’t! Instead, plan it!” Lori Schock, Director of the SEC Office of Investor Education and Advocacy advises.
Our Indiana estate planning attorneys at Geyer law realize that people have the desire to leave a legacy of ideas and experiences along with financial assets. The process may take the form of either in-person or digital “conferences”, or even preparation of a video allowing elders to share important life lessons they’ve gleaned and which they’d like to pass on to “emotional beneficiaries”. In cases of severely ill elders, the preparing of an ethical will can be part of the values-based planning process.
Estate planning, we realize at Geyer Law, may be about the wealth, but it’s also about the wisdom!
– by Cara Chittenden, Attorney with Rebecca W. Geyer & Associates
