Good Luck and Good Practices

I like to think I chose my parents wisely, but of course I’ve been lucky: My parents, grandparents and some great-grandparents lived into their 90s in relatively good shape for all but the last few years. In a similar vein, the affluent are generally lucky too, with the top 1% of American women and men now living to an average 88.9 years and 87.3 years, respectively.

Habits count too, though. So here are a few suggestions:

Ace the basics.

• Maintain a healthy diet, no smoking, consistent sleep, light use of alcohol. And keep moving. Mick Jagger’s three-hour daily regimen might not be for everyone, but you’ll want to keep some spring in your step for as long as you can.
• Stay active and engaged, whether through work, volunteering and/or hobbies. I am fortunate in continuing to enjoy all three.
• Stay social; prioritize meaningful relationships with friends and families. As Warren Buffett put it, the more love you give away, the more you get back.
• Stay cheerful. Why not?

Recruit your team and give them the tools to succeed.

• Choose doctors, lawyers, wealth and fiduciary advisors, and eventually perhaps a care manager who should outlive you (or are part of a firm with clear succession planning).
• Check in regularly with each, including annual physical exams and annual rigorous financial analysis.
• Assign appropriate powers of attorney and healthcare proxies.

Keep an eye on the long term.

• Plan and invest for a 100-year life – and then for legacy.
• Secure medical and long-term care insurance.
• Ensure that your revocable trust has a provision to replace yourself as trustee in the event of incapacity.

Successful aging is hard work. But it is famously better than the alternative.

— JM

Partnership in Planning

by Ross Saia

“How do I educate my spouse about our wealth?” “How much do our children need to know?” Estate planning discussions tend to focus on the distribution of assets. But it’s the answer to these two questions that will often determine how effective the plan proves to be.

While every family, every situation is different, a collaborative approach is usually best, both between spouses and between parents and adult children.

Even when spouses have shared goals regarding the disposition of their assets, engaging the less financially knowledgeable spouse at their level of understanding and interests and educating them about the potential financial trade-offs can improve the outcome. A trained advisor should be able to make sense of the SLATs, GRATs, CLATs and DINGs of estate planning while helping to foster a sense of unity and preparedness, which is vital in managing assets and addressing future uncertainties.¹

The more informed children are about their likely inheritance, the better choices they can make about their own finances, including saving, borrowing and spending on their own children. Involving adult children in the planning process can also provide them with a sense of inclusion and responsibility and help them become familiar with the financial and legal aspects of estate planning. Effective family governance and legacy goals can be much more attainable if family members feel informed and engaged.

Even in blended families, where sources of wealth vary and where profound differences can exist between levels of wealth, informed planning can promote a sense of unity and preparedness.

Perhaps equally important is the need for transparency. Honest conversations about estate planning can help manage expectations and reduce potential tensions, misunderstandings, conflicts and even legal disputes. Explaining the rationale behind decisions, whether it’s the distribution of assets, the establishment of trusts or assignment of fiduciary responsibilities (i.e., trustee, executor or personal representative appointments), can be very helpful. Heirs need to know the “why,” not just the “what” and “how much” while there’s still time to have those conversations.

Admittedly, there are situations where sharing sensitive information is not advisable or appropriate. In such cases, a letter of wishes can be placed among estate planning documents explaining the rationale behind decisions and outlining expectations. In any event, families with significant wealth should consider appointing a corporate trustee or co-trustee to educate and support an individual trustee.

Ultimately, estate planning is about more than just the distribution of assets; it’s about ensuring that the family is prepared for the future and that your wishes are respected. Taking the time to educate a spouse and involve adult children in the process can make a world of difference.

Ross Saia is a Partner and Wealth & Fiduciary Advisor at Evercore Wealth Management and Evercore Trust Company. He can be contacted at [email protected].

¹ Spousal Lifetime Access Trusts, Grantor Retained Annuity Trusts, Charitable Lead Annuity Trusts, Delaware Incomplete Non-Grantor Trusts