During his heyday, I tuned in nightly to watch David Letterman’s “Top 10 List.” I was recently reminded of Letterman’s Top 10 lists as I patiently listened to a client of mine provide yet another excuse for why “now was not a good time” to address certain estate planning decisions. In his defense, this 80-year old client is facing a number of difficult decisions related to the succession of his family business, decisions that will likely disappoint certain family members. While his continued desire to “kick the can down the road” avoids difficult conversations, it will ultimately lead to more family disharmony if the plan is never implemented before his death.
Therefore, in honor of David Letterman’s Top 10 lists, here is my “Top 10 Excuses For Not Completing Your Estate Plan,” some of which (*) are actual client excuses:
10. It’s snowing today, I don’t feel like coming in;*
9. It’s too nice today, I don’t feel like coming in (yes, same client as in #10);*
8. I will wait until my kids stop fighting with each other;*
7. I need to check with Ted Williams about cryogenic freezing
6. I asked Robert Mueller to help, but it turns out he’s busy;
5. I am waiting for Congress to provide clarity around the tax code;
4. I need to address a serious health issue and get out of the hospital first;*
3. I am a huge Prince fan;
2. I am waiting for my Blockbuster stock to rebound;
1. My plan is to live forever, and my plan has worked so far!
While we can laugh about the irony of these excuses so long as the person actually completes an estate plan before death, I have found that the excuses I receive commonly arise from two misconceptions about decision-making and estate planning.
- The Illusion of Control. First, some individuals suffer from an illusion of control over the factors that impact their estate planning decisions. They think that since they have the ability to “fix” certain variables, they should fix those variables first before they complete an estate plan. Some think they can fix the value of their investments, the relationships between their kids, how a favorite charity is running its business, or even the chemical dependency issues of their children or grandchildren. In the New Testament book of James, we are told to approach important decisions in the humility of knowing that there are many variables outside of our control. “Come now, you who say, “Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit” – yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a time and then vanishes. Instead you ought to say, “If the Lord wills, we will live and do this or that.” James 4:13-15. The point is not that we shouldn’t plan our lives, but that we should plan our lives in the expectation that our lives will turn out differently than we originally planned. We should encourage our clients to make decisions based upon what factors are currently known, and then revise that plan as those variables change.
- The Illusion of the Perfect Answer. Second, some individuals suffer from a misperception that there is a “perfect” solution to their estate planning questions. As a result, these individuals might wait for an indefinite period of time until they find the “silver bullet” solution. Having represented many families, I can assure you that no family situation is picture perfect—every family situation has some level of dysfunction, some moving parts, and some unknowns. In many cases, the best solution is not likely permanent, but dependent on the current status of these variables, and will change along with these variables.
As advisors, we know that it is critical to periodically review a client’s situation to assist them in making the right decisions as variables in their lives change. These changes might include beneficiary designations, fiduciary designations and, in some cases, the optimal tax strategy. My monthly follow-up call to the client referenced above is coming up soon; I hope for his sake that he does not give me any more fodder for more top 10 lists!