The key to a successful estate plan

One of the keys to any successful estate plan is one that’s often overlooked. Jane Greenfield of Vanguard Charitable and Vanguard estate planning experts say communication with your family is an essential part of your estate plan. 

Other highlights from this webcast:

Notes:
All investing is subject to risk, including the possible loss of the money you invest.

This webcast is for educational purposes only. We recommend that you consult a tax or financial advisor about your individual situation.

Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.

Although Vanguard provides certain investment management and administrative services to Vanguard Charitable pursuant to a service agreement, Vanguard Charitable is not a program or activity of Vanguard. A majority of Vanguard Charitable’s trustees are independent of Vanguard.


TRANSCRIPT

Gary Gamma: Igor, right down the street here in Bryn Mawr, Pennsylvania, “How do you engage a spouse in the process of estate planning, if the spouse is understanding of estate planning issues, it’s very minimal. Are there education resources for beginners?”

Alisa Shin: Do you want to go first?

Jane Greenfield: Well, I can talk about the charitable giving process. We have a lot of donors, a lot of clients who want to engage not only their spouse, but also their kids. They want the whole family to be involved in the charitable giving piece of their estate plan. And they may be more comfortable with the causes that they want to support or the charitable organizations that they want to support. So, we work a lot with our donors to give them access to information that can help them along the way. We have a great resource tab on vanguardcharitable.org, and on that tab, we have links to different pages from GiveWell, or from, Guidestar if you know the cause you are interested in but are looking for information on specific charities. We also have organizations, Find to Fund, and Universal Giving. They give you a chance to— If you don’t really know the cause you’re passionate about, they can give you insight into, you know, some initiatives that are out there and you can see what kind of mix you— Kind of ignites the fire. We even have a link to an organization that matches you up with volunteer opportunities because we find a lot of our donors, their charitable passions are really personal, either because of something that’s happened in their life or an experience that they’ve had with an organization or a cause. So, we have a lot of different resources that can help you engage your whole family and make them more comfortable on the charitable giving side.

Sarah Price: I would say on the estate planning side, one thing to keep in mind is that the planning process doesn’t have to be sophisticated. It can be very basic and so, if there’s concern that a spouse doesn’t want to get involved in the discussion because it’s too complex or too complicated, I would encourage you to find an attorney to meet with, to talk about simple and basic estate planning. It doesn’t have to be sophisticated and in fact, I would say if it is sophisticated to the point that you don’t understand it or your spouse doesn’t understand it, it’s not the right— It may not be the right plan for you. We talk to a lot of clients who tell us, “I have an estate plan, but I don’t know what it means and I don’t know what it does for me. Can you help me understand it?” And so, the most important thing is even if you feel that you personally are starting at a very basic level of understanding, is to start there and it’s okay to have a basic plan to start with. It may exactly fit your needs and your goals. If you need to alter that plan in the future and go to a more sophisticated planning structure, you always can do that but it’s okay to start at a simplified structure and put the basic will in place. Put the basic power of attorney in place, the medical directives, and start there. And that’s a fairly straightforward and easy discussion when you start at that level of who are our intended beneficiaries, who am I comfortable making decisions for me if I’m in capacitated. Who would I want to manage my affairs if I pass away? It can start at that simple level, I would say.

Alisa Shin: I think what’s really important to understand is why the spouse doesn’t want to get engaged or be part of the discussion, and what I think often gets overlooked is estate planning is not just about taxes and saving money. It’s not just about investments. There’s actually a lot of what I’ll call “softer questions,” that are really important for both spouses to be involved in when talking about distributing wealth. And that might be something that depending on the reason why a spouse doesn’t want to engage, could be more interesting. That’s what we often find with our clients. So, questions about how much are you worried about your children inheriting? Are you worried about is there a third party whether it’s a spouse, a boyfriend, girlfriend, or just friends, who have a lot of influence over your child or beneficiary? And, are we concerned about that and what things should we do and put in place to kind of safeguard against that? Are there specific reasons that you want the money to be used for? Those softer-type questions, I actually find with our clients, really start getting engaged with both spouses, both parents in that conversation. The second thing that I’ll echo with Sarah is really to make sure that you find an attorney that you’re comfortable with. There are attorneys out there who can talk in plain English about the estate planning that helps. If you don’t have that, I would really encourage you to reach out to your other advisors like your investment advisors. A lot of investment advisors have resources, have people on their staff who can sit down and talk with you and your family about your estate plan. A lot of them will do it in plain English, and a lot of them will not charge you on “the every-six-minute kind of increments” that lawyers tend to do. So, really broaden your thought process in terms of who you can outreach to, who your support system is in terms of having these conversations. I think it’s really key to understanding what’s causing— What’s that roadblock to getting both of you involved.

Sarah Price: And another point I think to make that sometimes comes up in our conversations is the hesitancy to put the plan in place because they’re afraid that what they want to put in place is going to rub someone the wrong way, you know, after they pass away. They’re not going to like how the plan was set up or what Mom and Dad did with the assets. And going back to our polling question we had about, “Do you talk to your family about your estate plan?” I think it’s important to note that you don’t have to go into deep detail of the finances for example, involved in the estate planning. You don’t have to talk about account balances. You can start that conversation with the family, very general about what your goals are with the planning so that hopefully in doing that, there’s not the hesitancy to put the plan in place because you’re afraid you’re going to offend someone. It’s your plan, it can be private for you and when you start that discussion, you can gauge the level that you want to take that discussion.

Jane Greenfield: It’s actually helpful for you to have these discussions before you die because it can be really unsettling to your heirs if they’ve made assumptions along the way. So, for example, the gentleman I met with yesterday who loves his daughter but plans to leave nothing to her. She’s really glad she knows that, I’m sure, because she knows that she really needs to think about how she’s going to create her own wealth. She’s not sitting there thinking that someday, all this will be mine and then finding it’s actually going to fund charities that are her father’s passion.

Sarah Price: Right, and it probably helped that conversation between the two of them as to what her dad’s passions are and what the purpose is for his wealth and why he set it up that way.

Jane Greenfield: Exactly, it’s kind of igniting passions of hers like along that same vein as well, which is nice.

Gary Gamma: People that don’t have a lot of knowledge, it sounds like talking about charitable giving is a great way to enter into the estate planning process.

Jane Greenfield: And it actually can be a nice first step. It’s a little safer ground sometimes talking about what you care about what are some of the problems in the world you’d like to help to solve and then it can— It’s a little safer ground that can then be broadened over time into the broader wealth discussion and wealth transfer discussions.

Gary Gamma: Alright, I think we have time for one more question here. We’ll go with, “How would I get started with Vanguard Charitable?” Jane, can you do the last question?

Jane Greenfield: It’s actually very easy. If you go to vanguardcharitable.org, there’s a green button on the right hand that says, “Start giving.” Click that; everything can be done online. You can set up the account, you can fund the account, you can choose your investments. Once the account is set, you can grant online. Of course, while most of our donors do enjoy doing a lot of the activity online, if you ever want to talk to us, we’re just a phone call away. It’s quite easy.

Important information All investing is subject to risk, including the possible loss of the money you invest. This webcast is for educational purposes only. We recommend that you consult a tax or financial advisor about your individual situation. Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency. Although Vanguard provides certain investment management and administrative services to Vanguard Charitable pursuant to a service agreement, Vanguard Charitable is not a program or activity of Vanguard. A majority of Vanguard Charitable’s trustees are independent of Vanguard. © 2016 The Vanguard Group, Inc. All rights reserved.