Relative Theory

A meme came to mind where a person is sitting with a financial advisor getting advice. The advisor asks, “You have nothing saved for retirement so far, what are your plans for living in retirement?” The client comes back with “I will be using the Theory of Relativity.” “As my relatives pass away, they will leave me money and I will, in turn, spend it for my retirement.”  It may be well intended as a joke, but it is really not that funny.

It is a simple formula. All the things you own, less the debts you may owe, become your estate. It does not matter if your estate is $1 or $10 million, it is still an estate. A person’s estate is their own up until they pass away. A person’s Estate Plan is very different as it may go on working for decades. A person’s Estate Plan is not just who gets what when someone passes away. It can give instructions on how to take care of someone when they become too ill to handle their own affairs. It may donate money to charities or request that college funds be set up for grandchildren or great-grandchildren. An Estate Plan can administer distributions to family members. The estate plan can also be designed to be inclusive or exclusive to family members, based on their relationships with the person the plan was established for. 

There are countless stories about the court cases, challenges, and outright feuds that can happen when a loved member of the family passes on. You may know of a situation or two in your direct family which left people not talking to each other for years after.  Living your life with the intent that someone’s estate plan will become your retirement plan may not be the best way to look at it. It certainly may not be the intent of the person who created the estate plan to start with. 

Evaluating what type of estate plan may be the best for your needs is best addressed with a legal professional. We do not hold ourselves out to provide legal advice on how to structure your estate plan. However, we do work with many professionals who do and can sit with you every step of the way through the process.