9 Things to Mention When Writing Instructions to a Trustee for Children

9 Things to Mention When Writing Instructions to a Trustee for Children

By Melinda Gustafson Gervasi

September 22, 2021

With a flourish you date the document and scrawl your signature on the line hovering above your name typed in Times New Roman font.  You drop the pen, sit back, let out a breath and say "we'll, I'm glad that is done".  In that moment you have created (or updated) your will.  Your children, age 13 and 11, now have legally appointed guardians if you and your spouse were to die.  The document also creates a trust fund to hold assets for the kids if they are orphaned before the youngest is age 30 (an age you set).  You are ready to cross "draft a will" off of your to-do list and get back to living life!

It's true. The will is dated and signed (hopefully in accordance with the witnessing requirements of your home state), but is it really ready-to-go? If both you and your spouse were hit by the proverbial bus on your way home, would the trustee you nominated in your will really understand how you meant for the money to be spent?  They can guess.  But you can also push just a bit harder and make it all easier by recording some of your thoughts and intentions.  

If you want a will that really does as much as it can to ease the cost and suffering of an untimely death, I suggest your buy yourself a pumpkin spiced latte, microbrew, or a heart healthy glass of red wine and work through these 9 points.  

1. Investment.  Do you have a preference on what assets of yours are liquidated?  Should some assets, such as a home or stock be held in the trust and not sold;
2. If you have more than one child.  What if your older child is done with college and that expense has been covered, but you have a senior in high school facing four years of large tuition.  How would the trust be used?
3. Daily Lifestyle.  Do you think the trust should pay for your tween's cell phone and data?  What about your child's passion for tennis or guitar?  How should trust fund monies be used to pay for daily living and hobbies?
4. Education.  Most people would say "yes, use the trust to pay for education".  What is "education"?  Is it tuition, transportation, dorm fees, computer equipment, tutor fees, test prep services?  
5. Travel.  It might be obvious that the funds should be used to continue a life focused on travel.  But what about the trust paying for extended family to travel to visit a young child?  For example, should the trust pay for Grandma to fly from Baltimore, Maryland to visit a 3 year-old grandchild in Madison, Wisconsin?
6. Family Traditions and Values.  Ask yourself if the trust monies should support long-held family values, such as annual summer camp at a religious or secular facility.
7. Holidays and Gifts.  How, if at all, should the trustee you trust monies to pay for gifts and celebrations associated with holidays and birthdays.
8. Milestones.  What is your opinion on trust fund resources being used to buy a car when a child turns 16 or marries at 23 or wants help with a down payment on a first house?
9. Restrictions.  Do not overlook the question of things you do NOT want the trust to pay for, such as a cult your teenager has recently discovered or activities that could be funded by an adult child working or a minor child using Social Security Survivor Benefits.

Buses in Panama City, Panama. M. Gustafson Gervasi 2019

Lost 401Ks and Pension Accounts

Lost 401Ks and Pension Accounts - In Estate Planning Everything Needs a Home

By Melinda Gustafson Gervasi

July 13, 2021

Pop culture routinely tells us that the human mind is meant to be creative, solving problems, and dreaming up new ideas.  The brain, they claim, is not meant to hold a laundry list of to-do items or an inventory of our assets.  Attempts to go against the grain inevitably leave us standing in the produce aisle of a grocery store scratching our heads about what items we need to buy in order to fix dinner. 

The same pit-fall captures quite a few of us when it comes to our retirement dollars.  According to CNBC from 2004 to 2013 more than 16 million 401K and pension accounts, with a balance of $5,000 or less, were left with a former employer.  In total, $8.5 billion was lost and not usable by retirees.  As a result, there is a current legislative proposal aimed to help connect individuals with lost accounts through a national “lost and found” database.  Read more of CNBC's reporting and the proposed legislation here.

One day there might be a national database to track lost accounts.  However, right now there is not.  Yet many of us have old retirement accounts scattered across the array of employers and careers we amass over decades of work.  If you prefer to take action now rather than pin your hopes on a "one day" government program to help, I recommend finding a home for all of your financial information.  Start with a labeled spot.

Why label a place for things?  Well, quite simply it works.  Earlier this summer my husband and I celebrated a wedding anniversary.  He splurged (well, a splurge by our standards) and bought a store card.  I on the other hand went for a gift.  I placed labels in different parts of our home to give him a guide to wear items "belong".  He had always said he wished our home were more like his engineering lab.  So I went with it, and it worked.  All it took was a label for "razor & shave cream" and "tooth brushes" for him to actually put them away after using them in the morning.  One label, and boom, I no longer found myself picking up his items.  

Perhaps this gives you a good laugh or a shake of your head at our odd ways, but pause on the idea for a moment.  Do you have a labeled home for your retirement account documents?  If a trusted member of your family or friend network walked into your home after you had a sudden illness or death, would they be able to easily identify assets that will be of great importance?

Being organized with your important papers is a huge gift to your loved ones.  While it may not eliminate the work of handling your final affairs, a bit of organization on your part can go a long ways towards easing the burden on your loved ones.  So, buy yourself some mailing labels and get to work!  Organize your file cabinet or start a 3-ring binder to hold important paperwork and documents.  Start with the big picture: sort them into illness, death, and taxes.  Those three concepts are at the core of estate planning and can jumpstart your organization efforts.

Thank you for reading.  Tune in during the months ahead as I delver deeper into the topic of having an organized and well-maintained estate plan.

The author, Melinda Gustafson Gervasi, with her equally frugal spouse, Charles.

Remember, a blog is not meant to convey legal advice.  Instead, it sparks thought and conversation.  Always seek legal advice from an attorney in your state of residence for counsel on your specific situation.

Estate Planning - Does Your Filing System Make Sense

Estate Planning - Does Your Filing System Make Sense

By Melinda Gustafson Gervasi

June 14, 2021

What makes sense to you today does not mean it will make sense to others or even to yourself a few years down the road.  This is problematic for your important documents, including your estate plan.  A half-dozen years or so ago I answered my phone to hear a client having a mini-panic attack.  We had worked together a year or two prior, and now the client simply could not find the estate plan we had created.

"I looked EVERYWHERE!  It's not under A for Attorney.  It's not under E for Estate Plan.  And it's not under W for Will!  I guess I am going to need you to redraft everything for me......"  With a sigh the client scheduled a meeting for the following week.  Fifteen minutes later the client called back, this time with joy.  "I found it! It was under D for Death!!!!"

Here are a few take-aways from that client call:

1. Not being able to find your powers of attorney or will is the equivalent of having no plan.  You really should know where the documents are, specifically originals;
2. A filing system that makes sense to you will not necessarily make sense to the people who will need the documents.  Once you have your plan in place, share essential details with those you have nominated in the paperwork.  Sometimes this means giving copies to those named; and 
3. What makes sense to you today may not down the road.  Illness, grief, dementia, a decade of not looking for the papers are all a few of things that may delay or prevent you from locating the documents when they are needed.

In law school I was told to write a brief as though a 12 year old were reading the filing.  Why?  Judges need to read something quickly and pull out the key concepts.  I suggest the same approach when organizing and maintaining your estate plan.  These documents will most likely be needed during a severe illness or death. This is a time of stress and grieving.  Not everyone will be thinking as clearly as they might be on a beautiful, uneventful day in June.  They will be operating in storm-like conditions. Keep it simple and to the point.  Place it in a logical place.  And when it doubt, give your system a trial run with a trusted 12 year old in your life.

The more organized you are with  your estate plan, the less stress, time and expense you and your loved ones will face during an illness or death.  Follow my Blog Series: Your Compass as I help you navigate organizing and maintaining your estate plan.  

Which Way?  Image by M. Gustafson Gervasi, 2021

Thank you for reading. Please note that a blog is not legal advice nor is it your attorney.  A blog is meant to spark though and discussion, nothing more.  I urge you to seek legal advice from a licensed attorney in your home state specific to your life situation.  

Estate Planning in the Age of Misinformation

Estate Planning in the Age of Misinformation

By Melinda Gustafson Gervasi

June 7, 2021

As the academic year comes to a close, I reflect on the many concepts my children studied during a year of virtual learning.  Math has gone from numbers the symbols used in geometry and algebra and social studies as moved beyond memorized State Capitals to more in-depth critical analysis skills.  Primarily the validity of source information.  

As my daughter finishes her elementary school years I read along as she studied the last novel of her 5th grade education -- The Westing Game by Ellen Raskin.  Published by Puffin Modern Classics in 1978 the book plunges the reader into a mystery surrounding the will of an eccentric millionaire who lived in town.  Sixteen named heirs compete with each other to determine who killed the testator, Sam Westin, with the winner set to claim the $200 million estate.  Well I wasn't 5 pages into the book and rolling my lawyer eyes at the absurd "legal proceedings".  I set aside my critical eye, enjoyed the fiction for what it was, and had lovely discussions with my daughter as her class read along.  However, it hit me that 5th graders are reading about estate planning and probate with no disclaimer that it is utterly false.  From a very young age the general public is fed information on an area of law that touches every single person's life.  

As you gather information for yourself on estate planning and probate, I urge you to pause and consider your source.  For example:

• Your lovely younger sister who lives in New Mexico tells you, a Wisconsin resident, all about the process she used to set up an estate plan.  Remember, estate planning and probate laws are written by STATE legislatures.  That means we have 50 different sets of laws on this topic.  While some concepts may be the same, the laws are likely quite different
• The banker you have worked with for the past decade keeps nudging you get a living revocable trust.  While he likely means well, he is not a lawyer.  Routinely I work with clients to untangle a mess of joint accounts or beneficiary forms that do not follow their wishes, but were recommended by a financial advisor/banker.  Take the suggestions into consideration, but check with an attorney before signing any documents.
• Acknowledge it's fiction when you are watching a movie, TV show, or reading children's books (they always kill off the mom!).  What makes for entertaining or suspenseful writing does not make it legally sound. 

Image by M. Gustafson Gervasi 2021

Best wishes for your summer.  Thank you for reading. Remember that a blog is meant to spark thought and discussion.  It is not legal advice nor is it your lawyer.  Always consult with a licensed attorney in your home state for advice specific to your situation.

When to Update an Estate Plan

When to Update an Estate Plan

By Melinda Gustafson Gervasi

June 1, 2021

Image by M. Gustafson Gervasi 2021

June has arrived.  Gone are the drab brownish lawns and tree branches.  Lush green foliage is juxtaposed by the light blue skies.  When you live in Madison, Wisconsin, with is harsh winters and drastically different seasons, you tend to stop and appreciate when the verdant landscape arrives on your doorstep.  June also ushers in three common life events that illustrate times when it may be appropriate to update your estate planning documents:

• Graduations -- has a younger person in your life reached a more mature life stage to allow them to serve as your health care agent, personal representative, etc;
• Weddings -- has someone nominated in your estate plan had a name change?  If it has been "awhile" since you updated your documents, this name change may be the extra nudge towards updating your documents; and
• Retirements -- have you moved out of state?  If so you may want to examine your documents to find out if they still meet your needs and the legal requirements of your new residence. 

In my opinion, estate plan updates are necessitated by life events rather than the pure function of time.  Pause, smell the flowers, and give a little extra thought to what life events have unfolded in your circle that warrant the energy to update your estate planning documents.

Thank you for reading.  Please remember that a blog is meant to spark thought and discussion.  A blog is not a substitute for a lawyer nor is it legal advice.  It is best for you to work with an attorney in your home state for advice specific to your situation.  And if you find my writing informative, consider sharing on your social media via the buttons below.  

Estate Planning: develop a comprehensive list of your assets

Estate Planning: develop a comprehensive list of your assets

By Melinda Gustafson Gervasi

May 24, 2021

Frenzied frustration, that is how I describe the adolescent emotions evoked when I played Whack-A-Mole at the Dane County Fair or random arcade.  Armed with a black mallet, the goal was to whack moles randomly popping up out of the half-dozen or so holes.  You would hit one another another would taunt you from the corner of your eye.  It was frenzied.  It was frustrating.  Yet, I loved that game and the challenges it presented.  Today as an estate planning and probate attorney that feeling emerges in each and every probate I assist with.

Frenzied because someone has just died and the surviving family and/or friends want to move quickly to "take care" of things.  Sometimes a large family is all together for a funeral or memorial service, combining that event with cleaning out the deceased's home.  Grief, memories, surprise, and confusion hover overhead while the Personal Representative (Executor in other states) attempts to get a handle on the finances.

Frustration soon arrives on the scene.  Banks refusing to release any information on the deceased's accounts.  Credit card companies demanding court authorization before turning off a cell phone.  Combing through old tax filings and statements, people find false leads on what is a current asset that were sold long ago. 

Grieving the death of a loved one will never be easy.  However, a bit of organization in your own financial life may reduce the number of Whack-A-Mole moments your Personal Representative or Executor will face while the handle your final affairs.  Start by stacking stock of what you own, everything you own, and record it in a format that can be easily accessed.  My personal favorite is a three-ring binder that holds everything related to Illness, Death and Taxes behind tabs.  Here is a check list for assets you might overlook:

• Checking account(s)
• Saving account(s)
• Money Market accounts
• Certificate of Deposits
• Life Insurance policy
• Disability Insurance if it has a death benefit
• Digital currency and where it is held
• Business formation documents, such as LLC, LLP or S-Corp agreements
• Brokerage Accounts
• Retirement Accounts (IRA, 401K, etc)
  
• Pensions plans with a death benefit
• Deeds to your home, cabin, farm, etc.
• Title to your vehicle(s) and or boats
• Long-term care insurance with a death benefit
• Custodial or UTMA accounts set up by you for minor children
• 529 plans or other college specific saving vehicles
• Royalties for published works
• Health Savings Accounts
• Stocks 
• Savings Bonds
• Valuable hobby or professional equipment
• Contents of a safe deposit box (i.e. valuable coin collection)

Did I miss something?  Please leave a comment if you have an asset to list that I missed!  

Thank you for reading.  Remember, a blog is meant to spark thought and discussion; it is not legal advice.  Please consult a licensed attorney in your state of residence for advice specific to your situation.

Tips for Managing Your Beneficiary Forms

Tips for Managing Your Beneficiary Forms

By Melinda Gustafson Gervasi

April 12, 2021

Image by M. Gustafson Gervasi, 2021, Dandelions!

Signs of Spring 2021 are popping up all around us.  Before warmer weather pulls you outdoors and offers an abundance of activities, there is one Spring Cleaning Task I urge you to consider.  Making sure your beneficiary forms are in order. 

I few weeks back I contacted my Brokerage with a question about its management fees.  The call was short, efficient, and eye opening.  The call started with my questions about how management fees are calculated and ended with the representative telling me that one of my IRA's did not have a beneficiary form listed.  "Seriously?" was my response.  I knew with certainty that I had completed those beneficiary forms, taking great care to name my spouse as primary and our children's trust as the contingent.  "No Ms. Gustafson Gervasi, I am sorry.  We have no record of a beneficiary form" the representative chimed.  Routinely I caution my clients about this problem with financial institutions, and here my own broker had made an error.  Somehow or other the beneficiary form was not received or uploaded.  Sadly, this happens far too often. 

Here are a few thoughts on managing your beneficiary forms:

• List all of your assets that have (or should have) named beneficiaries;
• Typical assets with beneficiary forms include: IRAs; 401Ks; Roth IRAs; Annuities: Pensions: Brokerage accounts, life insurance; and Health Savings Accounts;
• Confirm each beneficiary form says what you think it says by contacting the financial institution;
• Gather hard copy proof of the beneficiary form (screen shot, letter from the company, etc).  This gives your estate proof of the contract (A.K.A. a beneficiary form) if you die and the company states there is no form on file.  Keep this proof with your estate planning documents.

Managing your beneficiary forms is key to your estate planning.  Out of date forms or ones never recorded can upend your estate plan and your wishes may never be realized.  

Remember a blog post is not legal advice.  It is meant to spark thought and discussion.  Please contact a licensed attorney in your state of residence for advice specific to your situation.  Thank you for reading, and please share if you found this article helpful.