The Christmas and New Year period can be chaos. More people out on the roads, airports are packed, stores are crowded, supermarkets are like zoos. Navigating it all can be tiresome and frustrating. At a more micro level, the chaos might be a better chaos that involves spending more time with friends and family.
You often hear people say this time of the year is a good time for reflection and to focus on what’s important. They’re not talking about the spending, or the gifts, or the food, but the people. If people are truly the most important thing at this time of year, and by extension, the rest of the year, then it certainly is worth reflecting.
In the midst of the chaos, pause for a moment and imagine family and friends getting together for a very different reason – the passing of a loved one. The passing of a family member is always stressful and always a shock, but usually it’s a subdued period. And it shouldn’t be chaotic, certainly not beyond the initial shock of a loved one’s passing.
Unfortunately, on some occasions it certainly is chaotic. Maybe not immediately, but soon after the funeral is over, the chaos will begin. This chaos goes on for months and has the potential to drag on for years. Why?
The lack of proper estate planning.
Take all the stress and potential family disagreements that can be packed into the holiday season, times them by ten, and live with them for a year or more. It’s the most unwanted gift. It keeps giving. And it’s easy to avoid by simply addressing the problem.
People will often assess their need for estate planning based on their age or assumed heath status. It can be a big trap because one demographic can get caught out by their assumptions. Younger people are usually not thinking about it. Older people usually have their act together. Middle aged people are the ones who can fall into a trap of not planning, being casual, or forgetting about it for various different reasons.
Middle aged people can still think of themselves as younger than they are, especially if they’re still leading an active lifestyle. While someone may still consider themselves young at heart, their heart may not agree. Then there’s time constraints. Work, family, and recreational pursuits can take up a lot of time and energy. It offers an opportunity to delay, dawdle and dismiss. The reminder phone call disappears into background noise. The follow up email is quickly swamped in the inbox by other emails.
Then the final and slightly selfish problem, the idea is a bit depressing. A person may be unwilling to engage with the issue because they simply don’t want to think about it. While understandable, it also prompts the unavoidable guilt trip. How much does a person care about those they might leave behind?
The danger of not dealing with estate planning in middle age can put an unexpected death on a collision course with other unresolved family issues. This only further complicates matters for loved ones. A death where there’s a new partner, an ex-partner, and no estate planning, can start a chaotic chain of events for those left behind.
Then there might be a surprise from other entities. Think a binding death nomination in superannuation will help steward money to the right people and bypass proper estate planning? It may not. In one case we saw in recent years, a superannuation fund elected not to adhere to a binding death nomination. Instead, they directed the funds to the estate. A big problem because the estate didn’t have a will! This is the first time we’ve seen this occur and it compounded an existing mess because there was already a dispute due to a blended family situation.
Financial advisers are in a unique position. We get to see how people think about money, how people react to various financial and life situations, and we get to help them put in place strategies that hopefully allow them to reach their goals.
An advice relationship is usually a long-term relationship, so we also help and advise people through testing and stressful times. Many stressful times are unavoidable, simply because life happens. It’s the avoidable that causes the most regret for clients and the most sadness and frustration for us.
An unexpected death is bad enough for a family. The chaos from a lack of estate planning just compounds the trauma for an extended period, often with no end in sight. Someone in middle age who passes long before they, or their family expected, leaves behind the most chaos. All because they were too busy, assumed it wouldn’t happen, or didn’t want to think about it.
If you haven’t addressed it, make time in the new year. If your middle-aged children haven’t addressed it, encourage them to do so.
