If your are curious about the people who's lives were changed by the Bernie Madoff scheme, take a look at Geneen Roth's latest book, Lost and Found. Part memoir, part exploration of women and money issues, it is an interesting read. What struck me the most was how a prominent author and her circle of successful friends had such little knowledge of money matters, including estate planning.
Towards the end of the book, Roth tells the story of how her father showed her a will that indicated his estate would be split between his 4th wife, the author, and her brother. However, upon death she learned that the vast majority of his wealth was held in a retirement account, of which the only beneficiary was his 4th wife. He was a man who had worked extensively with estate plans, it was clear the designation was not an oversight. The pain, rejection, and confusion felt by the author is intense. The passage underscores a few key concepts for me:
- some children, especially in blended families, have a strong desire to receive an inheritance, driven by emotional needs upon the death of a parent;
- successful people may know little to nothing about estate planning -- the distinction between probate and non-probate assets is essential, and can greatly impact who receives what upon death; and
- parents should make a decision about telling children about the specifics of an estate plan. In some situations explaining a decision to leave assets to a new spouse may be wise, and it others it may not. Consideration should be given if you want to minimize the emotional impact, and possibly head off any litigation over your estate.
Estate plans tell a court who should do what, with what, when you die. They can also stir up unresolved emotions that have been dormant for years.