How "simple" is estate planning for the physician family?

When you hear the words "estate planning," what pops into your head? I'll bet the thought is "attorney." But the next thing is probably "will" or "trust" or "power of attorney" Estate planning definitely involves paperwork, but there's more to the equation.

There's also process and people. Since I'm not an attorney, please indulge me while I leave the process to the lawyers and focus on the people-prone aspects of this arcane art

The Givers And The Getters

The Givers are exactly the people you might imagine them to be: you, and your spouse or significant other. As a Giver, you're  probably concerned about "your stuff" and the taxation of your stuff. Givers often think about how their stuff will be used, whether someone will take care of their stuff, and how long their stuff might last.

The Getters have a completely different perspective. For the most part, Getters are not at all concerned about your stuff. They're concerned with two questions.

  1. How much? and
  2. When?

The Getters are not thinking about your imminent death. No. They're thinking about their imminent life; the life they could have if only they had your stuff.

Hearing this for the first time, most Givers say something like, "No, my kids aren't thinking about my stuff" or maybe they'll say, "Fine. They can have my stuff to do with as they please. I'll be dead anyway. I just want to make sure everything is divvied up fairly and be done with it."

Not so fast, Mr. and Mrs. Giver.

As a family financial advisor, I've worked with your kids, and I know the real story. Believe me: the Getters are definitely thinking about your stuff. But someone else has their eyes on your prize, too.

The Gawkers

Gawkers are the spouses, the wanna-be-advisors, and the hangers-onto your beloved Getters. They're watching the whole estate planning parade, and they have their own perspective when it comes to enjoying your stuff.

The Gawkers may never be part of your carefully scripted family meeting about how you plan to pass your stuff on to the next generation, but their voices will no doubt be heard by the Getters. Ignore the Gawkers and your estate plan may well be demolished. Here's an example.

A "Simple" Estate Plan: The Kids Get Everything

Doctor Giver and Mrs. Giver are an upright and well mannered 60-something couple who have been married for 45 years. Their two daughters April and May were born a little more than one year apart. Now in their early 40's, April and May have taken substantially different paths in life.

April was born with the gift of wisdom. In every endeavor, she excels. With great grades and a stellar smile, she won admission to Stanford where she majored in biology, led the varsity cheerleading squad, and graduated cum laude. She met a winner of a guy, Ted, who supported her while she worked her way through med school at Harvard. Now a vascular surgeon in private practice, she and her husband have a son who is the center of their universe.

May is not so gifted. She was one of the popular kids in school but she always managed to eke out low grades. She has attended junior college off and on, but never managed to truly "matriculate." When she's not working at the tattoo parlor, she's busy caring for the three children her boyfriend Sprout has "fathered." Sprout and May are always dreaming of a new life together, and their latest fantasy is to own and operate an organic tomato farm. All they need now is some seed money.

The Givers have an ultra-simple estate: a big house, a big brokerage account, and a big desire to make sure they do the right thing. But that's where the simple life ends and the real challenge begins.

Before they consulted an estate planning attorney (oops!) the Givers held a family meeting with April and May. Together, they agreed that the Getter's home will be left to Doctors Without Borders (Dr. Getter's favorite charity) and the tres grande brokerage account would be split 50/50 between April and May.

Simple enough, right?

The Gawkers Weigh In

When she arrives back at their pad, May shares the plan with Sprout, who goes ballistic. "Your sister is so rich, I can't believe your old man would give her so much! Doesn't he get it? We have THREE kids and your sister only has one. Man, we could really use ALL that money to start the Big Sprout Tomato Farm."

Over a candlelight dinner at a local bistro, April shares the news with her beau. Trying to keep his cool, Ted quips, "What has May ever done to deserve that kind of wealth?" He furrows his brow, continuing, "Don't your parents get it? Your sister will just waste the money. I'll bet Sprout will squander it on another of his get-rich-quick schemes. You know April, you've worked hard and sacrificed all your life. It just seems like your parents would want to reward your achievements."

April and May will no doubt hear more from the Gawkers as time goes by, and the messages will no doubt become part of their view of your stuff. They'll carry the Gawker messages in the back of their minds for years to come. And when the final Giver passes away, the Getters may split the estate amicably but there's a equal chance that an intra-family legal battle will ensue.

And so it goes.

If estate planning were simple and straightforward, you would not need an estate planning attorney.

But estate planning is rarely simple. If you're concerned about more than your imminent death and your stuff, which is to say that you're concerned with how your family will function long after you've left the planet, think about the people first, but don't think about it all by yourself.

Before you begin to talk to your children about your estate, select a wise and well-seasoned estate planning team - attorney, financial advisor and tax specialist - to analyze the problem and give you an independent, balanced assessment of the situation.

Your family is well worth the effort.