GUEST POST from Don: Settling Estates

(NOTE that Don’s guest posts will be shared on Sundays; however due to illness it is a day late this week.)

The NEXT major problem for settling estates

We just retired. We have no training in wills, estate planning or investments. However, before retiring my wife and I had to deal with several estate issues. One parent died and left an IRA. There were documents to sign.

Another needed major medical and hospice care. There were legal documents, including end of life instructions, to understand.

A third had dementia and got behind on house payments and taxes, needed nursing home care, and had a house we had to take care of which was hours away. That was an expensive mess. We had to pay off her loan and her property taxes immediately to save the house. We were not given enough time in this process to understand our options and ended up losing thousands.

A fourth needed in-home, then nursing home care. He left a small estate, but the housing market had just crashed in our area, so we had to find a renter until the market returned. After a while we sold the house on land contract with a balloon. I was a co-executor which was difficult because my brother and I often see things differently.

We experienced 4 different scenarios. There are literally hundreds of possibilities and none of them easy. Thankfully we did not have to deal with lawsuits, stealing siblings, or many other things which destroy families.

End of life issues have always been difficult for families. In the past, when all bills and important documents were mailed to homes, if a loved one left an estate the family would merely start looking though the checkbook register, the bill drawer, the important papers box. 99% of the essential documents and information was there. Birth certificates, marriage license, deeds, insurance policies, investment and banking info, including contact information and account numbers, were all easy to find.

However, that is changing rapidly with the electronic age. In this era we are asked to create portals for everything including investments, medical care, utilities, and even pest control services. What do families do now that so much business is performed online? Some have not written a check in years. There may be no paper trail to follow, no printed checkbook. What investments does dad have? Does he have more than one bank account? What bills has he paid in the last year? As electronic services expand it is becoming more unlikely that people have printed off the important documents which reveal which financial accounts exist. The family may not even find a physical life insurance policy. (Does mom have more than one life insurance policy? When was the last premium paid?) This is a problem which is only going to grow more pronounced as Baby Boomers and the next generation move into retirement, get dementia, or die.

This is one reason I have begun a physical file of all important papers. Digital assets should have physical documentation. I have all the companies, all the account numbers, all the deeds, all the certificates organized and in one place. Nothing is solely online or in emails. My family will not need anything other than a death certificate or signed power of attorney (and my physical file) to deal with the important financial issues if I became medically incapable of handing legal or financial issues.

I am guessing that few have considered this problem. I anticipate that the next era is going to be more difficult than the last in this area. This is a new problem for estate planning and one which begs for a quick solution.

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