Planning in Panic Mode

A few years ago, I spent a memorable weekend going back and forth between my office and a client’s hospital room. I spent hours sitting at hospital cafeteria tables or by my client’s bedside while he waited for an operation, taking notes, asking questions, drafting estate planning documents on the fly on my laptop.

Frequently, I will see couples where one spouse is ready to talk about estate planning, and one isn’t quite there yet. There are endless reasons – fear of mortality, not wanting to open up to a stranger about family quarrels, and classic, simple procrastination.

In this case, what finally made the husband stop dragging his feet was grim – he had seen a doctor for an unrelated issue, and learned that he had stage four cancer, with only weeks expected ahead of him.

I spent that weekend putting together a plan that typically would have taken three or four meetings over the course of several months. There were some complicating factors – an estranged child from a previous marriage and other questions that had to be resolved quickly.

Estate planning can be stressful under the best of circumstances, and planning under the time constraints and looming fear of a bad prognosis is even worse. In this case, we got it done – when the client passed away a few months later, his assets went where he wanted them to go, and we entirely avoided the stress and court entanglements of the probate process.

It is rarely quite as dramatic or sudden as the situation I outlined above, but it is quite common for me to have clients coming to me in some form of “panic mode” – possibly a diagnosis of dementia or Alzheimer’s, some other health scare, the prospect of imminent long term care needs. Perhaps the child they had always been relying on to deal with the estate after their deaths unexpectedly passed away, and there was a sudden need to find a professional executor or trustee. It took a pandemic, the birth of my first child, and some other changes in my life to get me and my wife to finally complete our estate plan.

The key to planning when you’re under the gun is this: be prepared to establish something that’s “good enough,” and then you can worry about establishing something that is perfect. Maybe you don’t know that you’ll have time to finish a comprehensive estate plan – reviewing a trust document that will protect your children from divorcing spouses, for example, can take some time. But, you can establish a solid foundation with a simple will, power of attorney, and beneficiary designations very quickly, which can give you breathing space to get a more powerful comprehensive plan in place.

For every person who gets a wakeup call and completes a plan in a hurry, there are many more who never do. Less than a third of Americans have any kind of estate plan in place, and the unintended consequences can be severe.

For example, if you die without a plan and you have children from a previous relationship, those children are due by Virginia law to receive two thirds of your separate assets, and your current spouse only one third.

In addition, there are dozens of ways to accidentally disinherit a set of grandchildren, throw your surviving loved ones into an expensive and stressful court case, or render your beneficiaries vulnerable to exploitation by a faithless estate administrator. These are all things that can be avoided by proper planning!

Don’t wait to plan until you’re in panic mode. You’ll risk making mistakes or not having the time to think through important decisions. You owe it to yourself and your loved ones to make those decisions in a calm, sober frame of mine, with advisors you can rely on.

The poet said, “We’re just waiting for the hammer to fall.”[1] Your future self will thank you if you do your planning before it’s already falling.

[1] *Queen, Hammer to Fall. 1984.