Planning With Purpose

I love the Tim McGraw song, “In My Next 30 Years.” I have practiced estate planning for 34 years and love planning with purpose.  In my first 30 years, it was the “estate tax tail that wagged the dog.” Now, with an $11 million exemption per person, the estate tax is dead for the majority of Americans.  But, Estate Planning is very much alive and well.

“In my next 30 years,” I have come to understand that estate planning is so much more important for non-tax reasons.  I guess all of my tax training and studies over the years, and listening to the other “war dogs” of the industry, my mind and my presentation to clients was all tax-driven and tax-motivated.  Now, 33 years later, I find that I don’t “practice estate planning.”  I have “lived estate planning.”

I have been happily married for 40 years and have raised 5 very great kids. I have seen all of them get married, saw two of them divorced, I have experienced grandkids and in-laws.    I started and grew a very successful law practice in Dana Law Firm.  After 25 years of running that, I shut it down to run the Arizona division of the estate planning practice of a national law firm.    After several years at a large law firm, I went back to start my own practice again.  During all of these life experiences, my philosophy on Estate Planning has changed dramatically.  My own personal life’s challenges and experiences, coupled, with counseling and advising thousands of clients and helping them through life’s challenges and experiences, have made me finally understand the human element side of estate planning.

I have learned that leaving an inheritance to family members in the wrong way can ruin their lives, and cause heartache and pain.  It can take away one’s desire to achieve and experience triumphs and failures.  It can ruin the satisfaction of building and achieving something on your own.  However, leaving an inheritance in the right way, with structure and PURPOSE, can bless many lives for multiple generations.  Truly, it is leaving a “legacy”, not an “inheritance”.

What does it mean to “plan with a purpose?”   It means different things to different people.  But to me it has come to mean:

1. What legacy do I want to leave behind? In the end, what do I want my life to be remembered for?  What gave me the most satisfaction in life, and how can I help my loved ones have those experiences?
2. How can I leave this world in a better place than when I entered it? Whose lives do I want to touch?  How philanthropic am I?  What charities are important to me?  What lessons do I want to install in my family about charitable giving, and giving back to those institutions that helped us in life?
3. What family values are important? And how can I foster those family values using various Trusts and planning tools?
4. How do I use my Estate Plan to motivate and encourage others, rather than hinder and impede growth and experiences?
5. Maybe it is more important to help the grandchildren since you have spent a lifetime of helping your children?
6. How do you want to say “thank you” to non-family members that were devoted to you, that helped you in your life, that were there to carry you thru difficult times and crises?
7. What medical challenges have you faced or have other loved ones faced that you would like to help?
8. Who should be the fiduciaries and advisors to your Estate Plan after you are gone to prevent family disputes, greed, jealousy, etc? We have all seen way too many cases where money and inheritances have torn families apart.

These are just a few of the things that one should think about and discuss with an experienced Estate Planning Attorney.  It has been interesting to see my own Estate Plan change over the years and evolve to where it is today.  Here are a few things that I have done much differently today in my Estate Plan than I did when I was a younger lawyer:

1. What age should your kids have total control? When I was younger, the most common age in an Estate Plan for control was age 35.  As I have aged, I have come to increase that age to 45, and have many clients that are even going as high as 50 or more.
2. Who should be the Successor Trustee or the Executor of the estate? I have gotten away from using family members and have been going with institutions or people who are independent of the family, who don’t have conflicts of interest.
3. Rather than equal shares, I have been adjusting the shares to be more reflective of how my wife and I have been treated by each of our children. Leaving an inheritance is not an “obligation”  It is a “gift”.
4. Charitable giving has a greater role in my estate plan.
5. Incentives have been placed in the plan to help motivate and educate my beneficiaries.
6. More thought has been given to Business Succession Planning, and how I treat my business partners and associates fairly even though they are not family members. How do I ensure that the law firm I built will continue and thrive long after I am gone?

In my first 30 years, the majority of my conference time with clients was spent on tax planning and tax strategies.  It was all about avoiding or eliminating tax.  Because that was such a complex subject, and because clients wanted to keep the fees down and were looking for competitive pricing, there wasn’t time to have discussions on these other non-tax subjects.  Now, in my next 30 years, and where my practice has “matured”, it is important to me to work with those clients who want an Estate Plan tailored specifically to them, their goals, their family, their legacy.

To me, it is identical to buying or building a home.  In my first 30 years, I built and sold mostly track homes.   In my next 30 years, I am only interested in building custom homes.  And, like building a home, we charge hourly rate fees for the design sessions and the planning meetings with our clients.  Then, once we agree on a design, and we have flowcharts prepared that illustrates the design, then we quote a flat fee to draft that trust.  In my mind, and for my plan, the days of a plan that names the oldest son as the Executor, and divides into equal shares, and the trust terminates is over.  Instead, I have chosen and implemented a “Plan with Purpose.” This plan achieves the most important things to me and to my wife.  It serves the “purpose” for which we want to be remembered.  If you have any questions about how we can help you “plan for a purpose” please call our office to schedule a free consultation 480-515-3716.