Estate Planning: Getting the Conversation Started

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Interview with Dan Felix, The Professional Trustee - Originally published in Spectrem's Millionaire Corner by Donald Liebenson

When it comes to trusts, wills, and legacy transfer, trustee Dan Felix references a story about a business owner and his employees who wait until a fire is engulfing the business before they open the manual to learn how to put it out. It doesn't end well for the business or the employees.

Felix, president of the Chicago Trustee Collaboratory, an interdisciplinary organization, fully understands why some families are not keen on confronting issues of what to do in the event of a parent’s death or debilitating illness. “It is an epic subject,” he agreed in an interview with Millionaire Corner. But all the more reason why the conversation, difficult as it is, should not be avoided.

Easier said than done, Felix conceded. “There’s a lot going on; we’re talking about family, death, mortality of ourselves as well as money. This is the Four Horsemen of emotional apocalypse.”

A trustee distributes income and assets of a trust according to the terms established by the grantor, the individual who establishes the trust.  Felix, tongue-in-cheek, likened a trust to a note parents would leave on the refrigerator for the babysitter on what to do while they were out.

A trust is created to avoid conflicts that all too often tear even the most close-knit families apart. Often, the issue isn’t even money. “Siblings can get into vicious disputes over what happens to grandma’s pie plate,” Felix said.

These are not necessarily bad people, Felix emphasized. “It’s asking a lot from people feeling the stress of loss to suddenly have to figure out decision-making techniques on the fly as well as deal with emotional and financial aspects.

Felix recommended steps families can do to facilitate a conversation. First and foremost, he said, “Don’t wait until there is a crisis. When is the best time to start; 20 years ago. The second best time is now.”

The conversations should be systematic as well as spontaneous, he said. “Schedule time in the family agenda--some people do it around the holidays—to say, ‘We’re going to talk about this stuff.’”

A spontaneous meeting, he admits, sounds a little weird, but it can be effective. “I heard a story that resonated with me about a mother who was driving her teenaged kids to school. They were talking about this and that and at one point, she turns around and said, ‘I don’t want to be kept alive on life support.’ They rolled their eyes at her, but it was a way to (bring up the subject).”

“Some parents and grandparents can be really foxy,” he added. “They say, ‘I know you kids will never get along and won’t figure out the right thing to do.’ In that particular case, I heard that this worked out as a positive challenge and that the children eventually rose to the occasion.”

The key component of a family discussion is to establish clarity and communicating what you want and do not want to happen in the event of illness or death. This, Felix said, leads into the issue of competence; ensuring one’s wishes will be met and that the right people have been appointed to achieve this. “If you want your son to be your power of attorney,” Felix said, “does he know how to do the things that need to get done? Does he know what assets you have?”

The good news about estate planning, Felix said, is that when done correctly, you can revisit from time to time (at least once a year, he recommends) to review what the family has in place and whether it still seems like the right idea.