In the Money Insight: Unconventional Estate Planning with Samantha Shepherd

Samantha Shepherd, the founder of Shepherd Elder Law and Assured Trust Company, recently joined me on In The Money Insight to discuss some of the reasons people should plan for their estate—even if they’re not the reasons that typically come to mind when we think of estate planning.

Samantha describes herself as an estate planning attorney who likes working with seniors and helping people with special needs. A summary of our conversation is below.

Cory:?A lot of discussion around estate planning is technically oriented and focuses on tax – but it’s important to remember what an estate plan is for: to communicate detailed instructions so that your affairs are handled to your satisfaction in case of death, illness, or incapacity.

Samantha:?Yes, an estate plan is necessary for anyone who wants to be an organized person. If you don’t have an estate plan, you risk leaving a disorderly mess for loved ones.

An estate plan allows you to plan for nearly anything. For example, in a country that loves animals, it’s worth noting that an estate plan can spell out who should take care of your pets and provide money for their care.?Estate planning is for everyone .

Cory:?Like anything else, it costs money to develop an estate plan. What do you say to people who feel an estate plan is not worth the cost?

Samantha:?I consider myself to be a “cheap” person. I use coupons, and if there’s a deal, I want it. And yet I worked with an attorney to develop an estate plan at a time when I didn’t have a lot of money. But I had a young child and I knew it was necessary. And even though I was an attorney myself, I wanted to work with someone who had estate planning expertise.

While wills are cheaper, I think it’s worth it to go ahead and spend the money for an estate plan. Wills may save you money today, but they can lead to more costs tomorrow and require more effort from your loved ones.

How else does a will differ from an estate plan? In a will, if you don’t specify who should receive an item that’s important to you—a beloved piece of jewelry, for example—it becomes part of your larger estate. It’s not difficult to imagine how multiple loved ones could argue about who should receive this jewelry. In an estate plan, it’s possible and straightforward to specify who exactly should receive what and how it should be taken care of.

Cory:?Yes, and an estate plan can help avoid all kinds of stressful situations, including having to let estate sale professionals or appraisers rummage through your house. Frankly, paying an attorney to draft an estate plan is the least expensive option vs paying an Attorney to settle disputes that arise from poorly planned estates.

Samantha:?Indeed. An estate plan can make it clear who should receive items that have titles—like a home or car—as well as items that do not, like jewelry, art, memorabilia and more.

And let’s say you pass away unexpectedly. If you don’t specify in a will or trust who should be able to come into your house and start clearing out its contents, we don’t have the power to say quickly and efficiently who should or should not be able to access your things.

Cory:?There are many reasons to have an estate plan, but as I think we’re highlighting today, it’s an important way to make life easier for your loved ones—at a time when they will likely be grieving—while also reducing the chance for disputes among your beneficiaries.

Samantha:?Yes. Everything that makes up your life must go somewhere. So, let’s do it in an organized manner.

A lot of people ask me if they or their loved ones will have to pay a “gift tax.” Unless your estate is worth more than $12.6 million, neither you nor your loved ones will have to pay a gift tax (also referred to as an estate tax). It’s a misconception that average people must pay an estate tax.

And while there are tax planning benefits to an estate plan, I would argue its main benefit is having everything in one place. Imagine if a loved one had to figure out where you bank, where your investment accounts are located, etc., if you passed away unexpectedly. Having an up-to-date estate plan is a kind thing to do for your loved ones. Before meeting with an attorney like me to build your estate plan, I encourage you to start making a list of where all your assets are located.

Cory:?Thanks, Samantha. Let’s discuss another topic most of us don’t like to spend a lot of time thinking about. Where should someone leave instructions for their funeral and burial?

Samantha:?This is an important question. If someone wants to be very specific—say, having their ashes spread in Scotland—we will include this in their estate plan so that money can be set aside for the designated loved ones to make the trip. But normally, we keep these funeral and burial instructions as a separate document outside the estate plan.

On a related note, I would like to note safety deposit boxes can be a headache for loved ones. If you have a safety deposit box, it’s critical to specify in your estate plan who can have access to it. I think a fireproof safe at home can often be as effective as a safe deposit box, by the way.

Cory:?That’s a good tip, Samantha. Let’s finally talk about healthcare. What should people think about when they’re completing a healthcare directive and determining who should be their healthcare power of attorney?

Samantha:?I often ask people, “Who is likely to show up at the hospital quickly if something bad happens?” A lot of people want to choose a doctor or nurse in their family, but they may not be the first to arrive. Typically, you should give this power to the person who you spend the most time with, and for many people, that’s their significant other.

And of course, you will want to make sure the person you choose will make decisions with your viewpoint in mind. You don’t want someone who will impose their views on your situation. Finally, you should also consider proximity; if possible, aim to choose someone who doesn’t live a thousand miles from you.

Cory:?Thanks so much for joining me today, Samantha. I think estate planning offers a sense of peace for people and their loved ones. While it can be awkward to discuss with your loved ones, it’s worth thoughtfully approaching an estate plan so that you can make life easier for those you care about.

Our conversation was wide ranging, but I hope we broached some topics that sometimes don’t receive enough thought. If you want to talk about your financial life, contact me directly at?[email protected] . And if you would like to speak with Samantha, I am happy to connect you.

Clients choose to work with us to enhance their financial literacy and explain exactly what?their?financial plan means to?them.

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Hightower Advisors, LLC is an SEC registered investment adviser. Securities are offered through Hightower Securities, LLC member FINRA and SIPC. Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material is not intended or written to provide and should not be relied upon or used as a substitute for tax or legal advice. Information contained herein does not consider an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Clients are urged to consult their tax or legal advisor for related questions.