Heavy Lifting and the Do-it-Yourselfer

Twice a week I train with a personal trainer to help keep myself physically fit. During the training sessions, I will often bench press free weights. For a guy approaching 54 years of age, I don’t do too badly. But my trainer always “spots” me, making sure that if the weight I’m lifting is too much, he’s there to keep it from crushing my chest.

Sometimes I lift when I’m alone and not in a training session. When I do this, I tend to lift less weight than I know I can handle because I don’t want to be crushed when no one is there to help me if I find myself having unexpected trouble.

Which leads me to today’s estate planning topic – do-it-yourself estate planning. I have come across many intelligent people who have invested quite well for themselves over the years and have diverse and complex family situation and intent for their assets. They shun financial advisors, estate planning attorneys and CPAs. “Why should I pay them to manage and plan for my money and my family when I do a better job on my own?” they often state.

I’m here to tell you, though, like the guy who tries to lift too much weight without a spotter, it’s probably a mistake to go it alone with your estate and financial planning, especially as one ages.

Allow me to illustrate with two examples. First, we’ll consider Marcus and Diana who have been married fifty years. Marcus has always done well investing in the market, and is adept at moving in and out of certain stocks and bonds when he should. He understands the capital gains ramifications of his decisions, and knows what he wants to sell if he needs cash to pay larger or unexpected expenses that arise from time to time.

Diana has never been involved in any of those decisions. In fact, she enjoys the freedom of leaving these matters to Marcus. So guess what happens if Marcus has a sudden stroke and can’t carry out his normal duties anymore? Where does Diana turn? Who can step in and show her everything that Marcus knows so she can carry forward on her own? What costly mistakes might Diana make without Marcus’s guidance?

Next let’s consider Peggy the widow. After her husband died she actually did quite well for herself. She studied the markets and maintained her estate plan, read The Wall Street Journal regularly and managed her money quite conservatively. She didn’t see the need to employ a financial advisor or an attorney since things were working out quite well on her own.

But then Peggy became forgetful. The neurologist’s report indicated that she had some form of dementia.  Peggy already had a revocable living trust drafted online that named her daughter Ursula as the trustee. Peggy had the utmost confidence in Ursula, and explained everything that Peggy knew about investments and her intent to her. But Ursula was busy raising her children and had a busy career.

Managing her mother’s money and paying her bills became a much bigger job than Ursula anticipated, so as Peggy regressed into further dementia, Ursula decided to engage the services of a financial advisor on her mother’s behalf.

The recommendation was through a friend of a friend, and you can guess where it headed. The financial advisor didn’t do well at all, with Peggy’s portfolio suffering. It’s likely that had Peggy been well and was convinced that she needed a financial professional on her team, she would have chosen a more seasoned advisor to manage her money and perhaps even have reflected on the advantages of having a qualified estate planning attorney review her plan before it was too late.

In both cases, wouldn’t it have been better had the “do-it-yourselfers” engaged the services of a professional? That way the financial advisor would know what their client would do in a certain situation, and have knowledge as to the investment strategies followed, the unrealized capital gains that existed in the account, and a host of other facts that would likely result in a more successful outcome? And the attorney would be able to draft the documents that properly reflected and carried out Peggy’s intent.

One never wants to “transition in a time of crisis” and that’s exactly what happens in many do-it-yourself scenarios. There is no “spotter” there who can help with the heavy lifting if the do-it-yourselfer becomes too weak to act for one reason or another. When there is no spotter there’s always the danger that the weight of the job and responsibilities crushes the do-it-yourselfer or their spouse or adult children.

So if you see any part of yourself in these stories, please consider engaging the services of a professional that you take the time to interview and select. It will make life easier on you if anything should happen, and certainly will make life easier on your spouse or adult children who depend upon you to do the heavy lifting in your financial life.

The Sheppard Law Firm is located in Fort Myers and Naples by appointment.

© 2018 Craig R. Hersch. Originally published in the Sanibel Island Sun.

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