New Year’s Resolutions for Better Wealth Management in 2016

By Edward “Ted” H. Miller and Seth B. Royster

  1. Health is a form of wealth. Take the time to analyze how your daily schedule affects your health. Small changes in your daily life make a big difference over the course of a year. Taking the stairs instead of the elevator may not seem like a major difference, but it is a difference that can be implemented consistently. Look for health decisions that can be actualized on a consistent basis.
  2. Know the odds. Properly review your insurance coverage in light of probability. Many families have insurance gaps. Others spend significantly too much on the wrong forms of insurance. Read the fine print before signing up for another year of your current coverage. It may make a big difference.
  3. Empower Your Family. Empower family members through better communication. Tell your advisors that you want your children to be able to make informed decisions. Most wealth advisors have inheritance coaching programs, many of which are complimentary. These lectures help the next generation learn how to manage advisors, read legal memoranda, and analyze portfolio diversification. It often takes children years to learn how to manage wealth. Give yourself the gift of knowing that they will be capable of handling the family business when you are no longer able to do so. Empower others in order to protect your legacy. See wealth as a catalyst for change.
  4. Take The Time To Plan. Consider the importance of planning. Whether it is tax planning, insurance planning, retirement planning, or estate planning, planning is worthwhile. In the hustle and bustle of life, it is easy to forget that often there is a difference between “activity” and “action.” There is also a difference between what is “urgent” and what is “important.” Take the time to plan in 2016.
  5. Build a Team. The best way to preserve wealth is through a good team structure. The advantages of a team approach are countless. Force your advisors to work together, and if they do not want to do so, consider whether they are putting your best interest first. Have joint meetings so that your own time is protected and nothing gets “lost in the shuffle.”
  6. Educate Yourself. A vibrant life is a moving target. The workout techniques that were popular in the 1980s are no longer popular today. Laws change. People change. Take the time to educate yourself about your surroundings, your future, and your past. Reflect on what you could have done better in 2015 in order to achieve greatness in 2016. Live greatly through reflection, meditation, and a renewed commitment to positive self growth.

 

 

The Robin Williams Trust Displays The Failure To Manage Tangible Personal Property

Tangible personal property is no laughing matter; beneficiaries of an estate often fight over the possession of family heirlooms, even when such heirlooms are of limited financial value. Items of tangible personal property, such as religious belongings or diplomas, often display a decedent’s beliefs or accomplishments. Some tangible personal property items, such as silverware sets and firearms collections, evoke the sentiments of family holidays or sporting traditions. It can be very challenging to monitor the whereabouts of these items. Since tangible personal property items are usually accompanied by less paperwork than other assets, a “finder’s keeper’s” attitude can creep into a family during the estate administration process. This combination of emotional combustibility and limited documentation makes tangible personal property a common point of contention for many families.

A recent dispute over the estate of Robin Williams displays how many family advisors fail to properly coordinate the management of tangible personal property. Problems of this nature can arise in the drafting stage of an estate plan, as occurred in the Robin Williams Trust. Problems can also arise in the implementation stage of a wealth transfer plan – especially when jewelry or other effects are not properly inventoried or documented. Such situations can lead to litigation, such as the litigation currently occurring in the Superior Court in Marin County, California.

CNN.com Reports:

“Specifically, there’s one paragraph about certain items of Williams’ property that his beneficiaries have made into a tricky semantics debate. The paragraph assigns to Williams’ children all of his “clothing, jewelry, personal photos taken prior to his marriage to (Susan) … memorabilia and awards in the entertainment industry and the tangible personal property located in Napa.” In Susan’s interpretation, the paragraph is ambiguous regarding the house (or houses) from which the items can be removed. Is the phrase “located in Napa” in reference only to “tangible personal property,” or is it restrictive of every category? She claims her husband wished “to allow her to stay in their Tiburon home as it was during their marriage,” and therefore the paragraph should be read to cover only the items in the Napa house, not those in the Tiburon house.

But Williams’ kids read the trust differently — they argue that it grants them every category of item listed in addition to the property in the Napa house, not every category of item confined to the Napa house. It’s nonsensical to list “the tangible personal property located in Napa” separately if there aren’t items to which they’re entitled outside the Napa house, they argue. They point out lines in the trust that give Susan the Tiburon house and its contents with the exceptions of items gifted in other stipulations. They want the court to declare they’re entitled to the categories’ items in the Tiburon house, too.”

(Source: “Robin Williams’ Widow, Children Clash Over Estate” by Austin Sigemund-Broka, The Hollywood Reporter, February 3, 2015.)

While it appears that the attorney erred in the drafting stage of this trust, another error occurred in the data gathering stage. The emotional strain of the ongoing litigation could have been avoided if the Williams family took the time to document each significant item in the estate.

Failing to plan is planning to fail; both sides of the family cared enough about these items to litigate, but neither side took the time to list or photograph which items were from before or after the second marriage, or which items were located in which home. Even if the trust had been drafted more clearly, tangible personal property is incredibly mobile. Thus, if the decedent, Robin Williams, had moved any items after the execution of the estate plan, confusion would have arisen.

Families can prevent some of the challenges of tangible personal property management by simply keeping abreast of recent acquisitions. A photographic itemized inventory is incredibly helpful to an executor or a trustee. The better the documentation, the more likely it is that a decedent’s wishes will be effectuated.

If your estate plan does not thoroughly address the disposition of your tangible personal property, it may merit review. Even the best estate plans have a limited shelf-life due to changes in personal circumstances. If you or your family advisor has questions about tangible personal property management, please reach out to us. It would be our privilege to help you manage your private matters.

Edward “Ted” H. Miller

Cooper, Spong & Davis, P.C.