By Dean D. Stein, CMA
If your first question is “who is Jimmy Buffett?” you might as well skip this article and go onto the next one. But if you are vaguely familiar, or you are what is known as a “Parrothead,” then maybe it is worth a read on. On July 11, 2014, before some 40,000 fans, Jimmy Buffett played a free concert on the Beach of Gulf Shores, Alabama, just before sundown, at the edge of the green and blue Gulf of Mexico, to benefit the Gulf Coastal area and provide some needed relief from the disastrous BP oil spill.
At this concert in the sand, Jimmy took a moment to remind us in the audience that he was now 63 years old. This telling of his age, momentarily sent my mind thinking to when I attended my first Buffett show, in 1986, in Tampa, Florida. In those same few seconds, I came to realize that while Buffett was now 63, I had, for over half my life now, attended nearly annual Jimmy Buffett shows with dear friends, in various parts of the country. These shows and his sun soaked, whimsical, Caribbean inspired music has served as the backdrop to many a great time and some difficult times as well. I guess you could say, that in my own way, I had made, from my perspective, a rather sizable financial contribution to Jimmy's now doubtless need for significant estate planning.
And even though I have never met him, he has always seemed like an old friend to me along the way.
Now at this point, you might reasonably ask, what does all this have to do with your estate planning? Well, in part, it is giving consideration to the fact that as much fun as I have had all these years going to these Parrothead parties, Jimmy also reminds us that all good things come to an end. In his song “A Pirate Looks at 40”, a favorite tune about someone pre-forty years old, what I now consider to be a rather young person, contemplating that milestone of a birthday, forty, and how they have allowed their money to somewhat slip through their fingers, with the telling lyrics, “It was never meant to last- never meant to last”. And the parallel is exactly that inevitability that we must earnestly and thoughtfully consider, at least for a few minutes, in order to prepare ourselves, both for the unexpected in life and the conclusion of it, and express it in the form of an estate plan.
A basic estate plan, to meet the needs of most individuals, includes a Will, an Advance Directive or what is sometimes referred to as a Living Will (not to be confused with a Living Trust) and a Durable Power of Attorney. Why? Because the Durable Power of Attorney, in its most basic form, allows the person you appoint while you are well and competent, to handle your business affairs if you become unwell or incompetent, without the immediate necessity of having to go to court to get court authorization to act. The Advance Directive, again allows you, while you are well, to express your wishes as to what you want physicians to do, or more importantly, not do, to you. Such as, do you want to have nutrition and hydration, no matter what, even if in the physician's opinion, there is no meaningful hope for your recovery? The Advance Directive also allows you to appoint a person to work with medical professionals to make these decisions, if you cannot do so yourself, if you are unresponsive or unconscious, for example. Lastly, the Will details what is to be done with your property at your death. Do you have a special needs child to take care of? Minor children, that is, those under 19 years of age in Alabama. Specific bequests allow property, like coins, family heirlooms, antique guns, family china or silver, or even Jimmy Buffet memorabilia, to go to a particular family member who will appreciate these items and keep them in the family. Pets to take care of or establish a trust for? Should your personal representative be required to perform and submit an inventory? Post a bond? While on the topic of a free concert, charitable giving may also play an important role for you in your estate plan.
If you have minor children in your life, it is even more important to have a solid estate plan. Children need special consideration. Who will take care of their physical, emotional and spiritual needs in raising them? Who will take care of their financial management needs? Should this be the same person? If the first choice for both can't or won't serve, who is a solid second choice? Have you discussed these wishes with the persons you wish to designate?
To be sure, the timing of making your estate plan is important. You should be able to put the thought into it while you are not distracted by other major life events. However, you should also guard against procrastinating until the “perfect time”. Try not to approach it with too morbid an outlook. It is only a part of our life, and a part of what we must do, mainly for our loved ones, who will be left to carry out our wishes. Years ago, I saw a book entitled “Invest Like Warren Buffett, Live Like Jimmy Buffett.” Even if you never read the book, assuming you know Warren Buffett is the Billionaire investment guru, sometimes referred to as the “Oracle of Omaha” and apparently a relative of Jimmy's, you get some idea on how we might proceed. Warren would take the time to properly plan for these future events, Jimmy would make sure that afterward, the good times continue to roll. That is all I am advocating, nothing more, nothing less. Yes, put the thought and effort into your estate plan, and then resume your life knowing that having completed this important preparation, you now really can be care free….and let the beach music in your life, just play on.
This article is generally based on Alabama law, the law of your state can
vary widely. This is not intended to constitute, nor should be taken by you as
legal advice and is not intended and does not create an attorney/client
Dean Stein, CMA,
is an attorney who has a Masters degree in business and is a Certified
Management Accountant (CMA).