THE WILLS AND WORDS CHALLENGE WEEK #5 (an estate planner's chronicle)

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THE PROBLEM: 50% of Americans do not have an Estate Plan (wills, trusts, powers of attorney).

THE CHALLENGE:  Make the case for an Estate Plan to 50% of Americans (or at least to my family, friends, and community).

THE CONTENDER:  An Oak Park attorney (sole practitioner) who has discovered the value of both having an estate plan and the ability to draft one.    

THE METHOD: One argument, article, or essay a week persuading action.

THE DEADLINE:  October 30th (7 weeks)



Making the Case For An Estate Plan


Generally, in life, equal is fair.  Equal treatment usually means fair treatment.  Being treated fairly brings harmony and makes us happy.  In my childhood equal treatment was the gold standard that my parents tried to live by.  My mother was adamant that she and my dad treat my brothers and me equally.  Equal attention, equal punishment, and equal love.


Of course, that was impossible.  If you asked my older brother John and me, our younger brother Mark received more of the attention and less of the punishment.  Still, we recognized that our parents tried their best. 


There were always the exact number of gifts for each of us under the Christmas tree.  All birthdays and graduations were celebrated with enthusiasm.  We were all given the same educational opportunities.  The only time equality lost out was at Halloween.  If we collected it (candy), we kept it (eat what you kill, right?). 


Even upon my mom's death, she insisted that her property be divided equally (she had an estate plan).  We siblings were independent adults.  Dividing things equally seemed easy and fair.  (My brother John likely deserved a bigger share because his financial independence from our parents started much earlier than mine.  But, as usual, he took the high road and encouraged equal shares.)


Illinois intestate law agrees with my mother.  In Illinois, if parents die without a will or a trust their estate is divided equally among their children.  So, if something had happened to Mike and me before we drafted our estate plan, our property would have been divided equally among Paul, John, Maureen and Luke. 


This seems fair, right?  Perhaps, if our kids were all independent adults and had successfully made their way in the world an equal inheritance would be fair.  But, our kids are not quite independent adults.  They are still somewhere between childhood and adulthood.  While they make their way to adult success, dividing an inheritance equally would not be fair. 


Paul is a senior in college, John is a sophomore, Maureen is a freshman and Luke is a high school junior.  Even though our kids are close in age, there is still a world of difference in their circumstances. 


Paul is almost an adult.  As a senior in college, he would only need to pay for one semester of college tuition from an inheritance.  He would be able to use the bulk of an inheritance as he pleased.  He could save it, put a downpayment on a home, start a business or just travel more.  He would have a great deal of financial freedom. 


John and Maureen are just starting their college careers.  College tuition and living expenses would take a big bite out of an inheritance.  They would not have the same financial freedom Paul would enjoy. 


Poor Luke (literally), would have to pay for all his college tuition and expenses from an inheritance.  In two years, when Luke would begin attending college, the price tag might be even higher than it is today.  Would he be forced to use his entire inheritance on college expenses?  Or, even worse, would he be saddled with college loan debt, an expense Paul would never have had to incur? 


Illinois intestate law cannot make allowances for age differences.  For good or for bad, the law is blind to extenuating circumstances.  Fortunately, our kids do not have to worry about intestate laws.  After Mike's heart attack, we created an estate plan for our family. 


We were able to create provisions that considered the age difference in our kids.  We created a "pot trust" which delays dividing an inheritance until all the kids finish college.  We also created a provision that provides the older kids the ability to borrow against their inheritance.  They can pay for grad school, buy a condo, pay for a wedding, etc.  This way the older kids could still move forward with their lives while the younger kids continue to make their way into adulthood.  Luckily, with an estate plan, we can create fair treatment (and happiness) when the law cannot.


I was taught a great lesson about equal treatment and happiness by my son John when he was eight years old.  John was having a birthday party and he asked to invite a boy from school.  John stated that he had talked to the boy and the boy wanted to attend John's party.  This boy, however, had not invited John to the boy's birthday party the week before.  I asked John if he really wanted to invite this boy when the boy had not invited him.  I said that it did not seem equal?  John said, "If it makes me happy to invite him and him happy to attend what does it matter if it is not equal."  Who is the parent now?