Tuesday, October 17, 2006

Estate Planning and Life Projects

Since my mother died when she was 55, I have been thinking about my own mortality, more seriously since I turned 50. For the past 10 years, I have wished to but somehow procrastinated about writing a will and doing some serious estate planning.

Lest these statements about such unwelcome topics be a source of worry for family or friends, let me just say that John and I may not be in perfect health, but we are in good health and we are not presently aware of any life-threatening medical conditions. Neither have we been having any dreams or premonitions of anything untoward happening to us.

That being said and, I hope, worries cast aside, let me begin.

We have always told our children not to expect any inheritance – that all we owe them is a good education, a good set of values (including believing in God, country and fellowmen) and good memories of life with us. Hopefully, we have delivered on all three.

On the other hand, we also believe that we should save for our old age so as not to be burdens on them. After all, we did not take care of them so that we could oblige them to take care of us.

But we have reached the stage in our lives when we have more years to look back on than forward to, and we should start planning how to spend the rest of our lives, as well as how to prepare for those two great eventualities – death and taxes. Hopefully, by doing our homework now, we can save my family from a lot of confusion or stress. (John and I still have to seriously sit down to discuss these issues, so from this point on, I will speak for myself only).

There are many good reasons for doing some estate planning. Foremost in my mind is keeping family harmony. I have seen, heard or read about families being painfully alienated from each other because of inheritance issues. It seems conflicts can arise no matter how small or large they stand to inherit or lose.

Another reason is that laws on inheritance taxes do not favor those who do not plan, as a lawyer I have recently approached has told me. If I don’t plan, the government will stand to gain the biggest share from what I will leave behind.

Thirdly, I have also recently read a book called “Die Broke,” and it has opened my eyes to a new truth – that we should share now, instead of waiting to distribute wealth after we are gone. We could, for example, help the children through grad school, or help with down payment on a property of their choice, or to provide capital for a business. We could also spend some of our precious savings for enjoying time together – maybe by sponsoring a trip or dream vacation for the entire family. But, we have to be prudent with expenses, lest we find ourselves with more time than money on our hands. ; )

Estate planning is not easy; not everything can be left to the lawyers to decide. They can help with how to word a will and to make sure that it will be a legally acceptable document. They can help prepare properties and other assets to minimize estate taxes. And of course, they can guide me through all the legal rigmarole. But outside of what is dictated by law, there is a free portion that lawyers leave entirely to their clients to decide before they can help write it down for them.

There are decisions to be made. How should the free portion be distributed? Aside from the family, who else should benefit from the estate? We have people who depend on us, and there are people who have worked with us for many years, and they, too, should be considered. What is the ideal mix of fixed assets and current assets, so that certain properties do not have to be sold just to raise money for taxes? Will proceeds from our insurance policies suffice to take care of tax obligations? Who can and should be named administrator of the estate? There are many more questions to find answers for.

In addition to exhausting all the questions and finding the answers, there is the daunting task of doing an inventory of what we own and what we owe, and of gathering all the documents to support these claims.

I am writing this with the hope that when the final eventuality comes, I can lessen the burdens and conflicts by preparing a will and by doing proper and intelligent estate planning. Some people do not like to talk about death, but I would also like to say that I do not mind preparing for it. After all, I bought a plot at Manila Memorial Park in 1978, and signed up for memorial service a few years ago (both fully paid for), so that my family does not have to worry about these things

Maybe this is not done, but I would prefer to involve my family in helping me do estate planning and writing a will. I would like to hear from everyone – from John and our three daughters, and even John, our son-in-law (so that he can help Ching grow what we will leave behind). I would like them to know everything – what we own, what our wishes and preferences are in terms of living the rest of our lives, and of course, when death comes. It would help them to have advance knowledge of what there is and where they are so they can maximize their benefits from their inheritance.

With regards Adphoto, I do not wish to put a burden on anyone to continue what we have started – it is not a must - but if the family, or those who have been working with us for many years, feel that the photography business can or should continue, then I would appreciate it very much if whoever will decide to run it will get support from those who would like only minimum involvement (maybe remain as investors, and to allow the property –at least one – to be available for the studio). Of course, how actively or passively they wish to involve themselves with the company, or to discontinue it, is their decision to make. I just wish that the decision to keep or forsake this business would not be an issue that will divide the family or the people who have worked hard to build it up. I just want it clear that as far as I am concerned, I would love to see Adphoto chalk up many more years, but that should be a business, and not just an emotional, decision.

I would like to hear their opinions about our plans to share with others, other than the immediate family. We have been blessed abundantly, and there is no denying that many have not received as much in this life as we have. So, I would like them to consider sharing with less fortunate – relatives or otherwise - and to continue to help with church, or any of our advocacies (for example, I would like to see Maali provided for).

Our family also needs to discuss what to do with personal effects – furniture, some (not a lot – since I am not into) jewelry, special books and mementoes. The ideal situation is for everyone to get what they wish for, and to give in to each other when some things cannot be divided and must be shared or given to somebody else to whom it is more valuable. I read somewhere – I think one of the Covey’s books – that one family gathered together to listen to the will being read, but before that was done, they did what the deceased had requested – that when it came to personal effects, that they would share their sentiments and explain why they would like to inherit certain things. And so, that session turned out to be a sentimental journey with each one reliving certain memories that were attached to certain things that the deceased left behind. They learned so much about each other and about the deceased, and everything was lovingly divided up, some giving up their “claim” when they heard why certain things were important to the others. Whether this was fiction or not, I would like it to be true for my family, relatives, friends and beneficiaries. I don't have many heirlooms to leave behind, but maybe it can be a fun session just remembering the good times.

Obviously, this piece of writing is only the beginning of the tedious task of estate planning and preparing a will. But, at least, I’ve taken the first step. =) The list below includes not only the requirements for the two purposes but also some personal projects that I hope will be my legacy to John, Ching, Kathy and Sacha. I pray not only for God to grant me the time and good health to accomplish all these, but also to save me from my sin of procrastination. ; )

Now, I need to:
1. Prepare an inventory of what we own and what we owe, similar to a company’s statement of assets and liabilities, including gathering ALL the documents pertaining to them
2. A list of family members, relatives, important people in our lives, intended beneficiaries
3. A statement of personal wishes and preferences for living the rest of our lives and for when death comes
4. Set aside funds for long-term care, just in case
5. Plan some family holidays.
6. Meet with the lawyer and financial consultant to do some estate planning, and with the lawyer to do a will, living will and all other such documents.
7. Meet with the family to openly discuss estate planning, writing a will, foreseeing and providing for the future, anticipating conflicts with the end in view of avoiding them and making transitions and successions as smooth as possible
8. Meet with close business confidantes to discuss and explore succession issues, the future of Adphoto and their own concerns about the business and their welfare when we go
9. Prepare personal and family documents for easy turnover
10. Prepare family photo albums, hopefully, one each for Ching, Kathy and Sacha
11. Prepare John’s personal (one copy – now possible with laser printing) books of photos of “Banaue,” “People Power,” “A Cross-country Flight on an Ultralight,” “Redeveloping R. Hidalgo,” “John and His Pets (Maali and Picco)”
12. Write family stories and anecdotes.