E260 3 Recent Solo Ager Estate Plan Questions

E260 3 Recent Solo Ager Estate Plan Questions

The following are three recent questions from our Solo Ager readers. Thanks for your questions!

As a side note before we begin: I’ve noticed that a more popular phrase is “Elder Orphans” rather than “Solo Agers.” I feel like “orphans” sounds like a bit of a downer. Please let us know what you think in the comments.

Can I disinherit with a poor man’s will?

Can I disinherit with a poor man’s will?

A “poor man’s will” is a slang term for not having an official will, but rather, using your beneficiary designations to patch together an estate plan. You can disinherit people this way, but it probably won’t work out the way you hope.

Too often, beneficiary designations do not reflect your final wishes. People often forget who they named as beneficiaries on their accounts. That kind of information doesn’t show up on your monthly statement; you have to call the bank. Another reason is that your account balance is continually changing. Maybe you want to leave your bank account to your nephew, but you like your niece more, so you leave her your larger brokerage account. Then, you leave the other brokerage account to your brother. What if one brokerage account over-performs and the other account tanks? Now your wishes are out of whack.

When doing a poor man’s will, you don’t have the structure to run your estate. People like to avoid probate because the process is long, but probate actually gives structure to the process after someone passes away. Structure is important to make sure debts, taxes, and expenses get paid. You could run into the situation where no one knows who is supposed to pay for the funeral. Or maybe the IRS is hunting down all possible heirs to pay the taxes.

Without a probate estate, there are no funds to pay an executor. If all the assets have a named beneficiary, there is no operating account for the estate. Most people don’t want to do the executor work without compensation.

The way to disinherit without using a poor man’s will is using an “in terrorem” clause with a disincentive payment. An in terrorem clause is when you disinherit someone by cutting them out of the will if they object to the will. But that only works if that person is going to get something. (It doesn’t work to say they get nothing, and if they object, they get more of nothing!).

Who will scatter my ashes if I move out of state?

Who will scatter my ashes if I move out of state?

One reader asked who will scatter her ashes if she moves out of state, away from her executor (in this case, I’m her professional executor).

The executor can still honor those wishes out of state. FedEx delivers ashes, and we work with the local funeral director to make sure the ashes get shipped correctly – The estate will pay for the shipping costs. Alternatively, the estate can pay for the executor to fly out of state if there are sufficient funds.

Who should I hire to make my funeral arrangements?

Who should I hire to make my funeral arrangements?

One reader asked if they should hire me, as a professional executor, to make funeral arrangements. Is hiring a person better than buying a prepaid funeral arrangement?

I am not a fan of prepaid funeral plans. With all due respect to my funeral director colleagues, I’m not a fan of prepaying for anything. If you want to set aside money in an account for your heirs to pay for the funeral, that is fine. Locking yourself into a prepaid plan is not the best idea. Funeral homes are not great managers of other people’s money. For example, we had an estate of a deceased funeral director and had to open the funeral home books to see who was owed what. We were tasked with refunding money to people who had prepaid funeral plans, since the funeral director passed. The records were not well-kept, and it was quite a mess.

You can use legal documents for choosing who will be in charge of your funeral plans, and you can have a separate account with funeral funds available. This allows you to change your plans. Suppose you buy burial plots in one state and then you move to another state. Don’t lock your plans in too much because you don’t know how your wishes will change in the future.

A similar question: is the professional executor a “one-stop shop?” Yes, if you ask me to serve as your professional executor, I will have annual check-in calls with you. I can’t just meet you once and put my name on your documents. We don’t have to be best friends, but we need to have a relationship that gives me a general sense of how to carry out your wishes.

Another question: should I name my funeral director as my executor? No. Unless your funeral director is a unique individual who has significant experience serving as executor, then it’s a definite no. They might be excellent at managing final affairs and ceremonies but acting as an executor is a completely different skill set. Just because death relates the two roles doesn’t mean the skill sets are related.

Again, we appreciate your questions. Please keep sending them in! If you don’t have a copy of my book, the Solo Ager Estate Plan, click the link below.

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