Five Things You Should NEVER Leave to Your Children

“Deciding on the legacy you want to leave includes an estate plan, but it goes far, far beyond financial matters.”
– Todd Tresidder, financial author and mentor

When people think of estate planning, often they think about clarifying or making decisions on what they will leave to their children and other heirs. And while inheritances may be largely financial, there are many things that we “leave” for our children. Our financial, emotional, physical, intellectual and spiritual legacy is hopefully a positive one, not one that burdens them.

Whether or not you have life insurance, assets, or a sizable estate that may one day be an inheritance, here are five things that your children – however young or old they may be – are hoping you DON’T leave them.

1. A house full of clutter.

An acquaintance just took 8 months off of work to sort through the packed basement, attic, closets, and rooms of her father’s home after his passing. Another took trips from Seattle to the East Coast for over a year to clear the mountain of belongings and paperwork out of her father’s home. When one sister left her four-bedroom house full of things to her surviving sister to deal with, it took a high emotional and physical toll to have to clear the home, not to mention deal with overdue repairs.

Yes, there are those who can be hired to assist in such circumstances, such as Jessica Waters of In Perfect Order, who brings a team to organize or clear an entire house in mere days. However, it can be difficult for family members to delegate such tasks of sorting through family treasures – and family junk – to strangers, even when the personal and financial cost of doing so is high.

Instead, start giving things away now. Give the treasures to family members who appreciate them, and don’t stop until the clutter is gone and nothing but a few boxes of holiday decorations remain. If you need help, hire out or call on family members. It is far more satisfying to have a family garage sale and recycle/donation weekend during the good times than to have to sort through belongings during a time of grief.

As “Lighten Up” workshop creator Laura Lavigne says, “If something is not actively used or deeply cherished, let it go.”  It will lessen your burden and lighten your load, as well as help you to leave a better legacy.

2. A paperwork mess

Todd Tresidder of Financial Mentor posted a heart-breaking story about the aftermath of his father-in-law’s passing in “How to Determine Your Legacy in Life… Before your Death.”  Unfortunately, it is not an isolated story.

Not only did the family have to confront a storage locker full of useless, outdated junk, they had other, more difficult challenges left by his unfinished business.

As Todd tells it, his father-in-law had always planned on “getting his accounting records together and filing several years of delinquent, back taxes.” But he passed away before he even turned 65, leaving his children with the impossible task of preparing tax returns with incomplete records.

And the hassle was only the beginning. “They had to personally sign and take on liability for those back taxes,” says Tresidder. “He planned on living longer and eventually getting around to these things, but he never did. Life had a different plan….”

Don’t leave the paperwork you didn’t want to deal with to others. If you don’t want to tackle this burdensome task, your children certainly don’t either! Hire a bookkeeper, an accountant, or whoever you need to sort it out. Ask for help from the family if you are unable to deal with it yourself, they would rather help you now than be left with your mess later.

3. A mountain of debt.

The woman who left behind her 4-bedroom house full of things also left behind tens of thousands in credit card debt from years of living beyond her means.

Tresidder’s father-in-law had dropped his health insurance because it was “too expensive.” He thought he could do without it until he was old enough for Medicare to replace it, but he never made it. His children were left to negotiate and settle a pile of medical bills that consumed their father’s life savings and bankrupted his estate.

One reason we advocate for whole life insurance is that the death benefit can replace assets that must be spent when “life happens,” or when the paid-off house must be sold or mortgaged to fund long-term care. Now there are permanent policies that can also be used to pay for long-term care in many states, too, helping people to avoid the very real possibility of paying for long-term care insurance that is never needed.

One way or another, find a way to resolve your debts. If you are unable to repay your debts or settle them for a negotiated amount, then bankruptcy might be a viable alternative. A major reason people enter into bankruptcy is because it offers them protection from their creditors. A bankruptcy offers the same protection to a person’s estate, thus protecting heirs who would otherwise have to pay debts from the proceeds of the liquidated estate.

4. A Family Feud

One way to start a family feud is to leave siblings with differing amounts of an estate. And regardless of their financial habits or history, anything other than an equal split is likely to leave someone crying “unfair!”

Another way to start a family feud is to not have an up-to-date estate plan in place. Tresidder’s father-in-law had intended on organizing his financial affairs and assembling an estate plan with updated beneficiaries. Instead, he left a mess of contradictory documents and incomplete plans that pitted family members against each other.

Be clear, be consistent, and be complete with your estate plans. Update them every few years, or at the very least, when there is a change in the family structure of a family, such as a death or divorce.

5. Confusion and a lack of communication.

Lenore Vassil created TheTorch.com as the result of her father’s illness, which left him temporarily unable to run the household or pay the bills. Following that experience, a she watched as a pregnant friend lost her boyfriend and father of her unborn child in an accident. The family searched for weeks, not knowing if there was a life insurance policy or not.

Family members often talk frequently, but are they having conversations about the things that really matter in an emergency? Often not. The lack of communication creates pain and confusion as those remaining are left to wonder:

• What lawyer, financial advisor, CPA and insurance agent should be contacted?
• Where are the important documents stored, and which documents should we expect to find?
• Who is the family doctor, and is there a durable POA?
• How DOES the mortgage get paid, anyway? Knowing what bills are on “autopilot,” which aren’t, and how the family financials are tracked is crucial.
• Then there are the more personal logistics… Where are the car keys? Are there instructions for taking proper care of the dog? And the list goes on.

Communicate thoroughly and pro-actively. My grandmother had a green notebook that listed all of the essential information and detailed where to find what, and everyone knew where the green notebook was. TheTorch.com does what my grandmother’s green notebook did, but it’s easy, it’s digital, it can be updated and shared with others across the country, and it thinks of everything so you don’t have to. Best yet, you can start an account and share the five most important things your loved ones need to know for free.

Get Started on Your To-Do List Now

It’s easy for an article like this to simply make us feel overwhelmed, but the point is to resolve the overwhelm! And if YOU’RE overwhelmed by your unfinished business, do you really want to leave it to your loved ones to complete? We didn’t think so!

Anything that drains your energy will become an energy drain for your loved ones if (or when) something happens to you. So start finishing your unfinished business today. It doesn’t matter that you may well live 30 or 40 more years – who wants to live that long with unfinished business hanging over their head!?

The first step is easy: Simply MAKE A LIST of all the things you need to do. Right now. It doesn’t have to be perfect, it just needs to get started.

Step two: Prioritize the list according to importance of the item. Perhaps it’s setting up life insurance, getting a proper estate plan, or changing the beneficiary on your 401(k). Maybe it’s getting started at TheTorch.com, where in 5-10 minutes you can begin an account and share the “fill-in-the-blank” list of the 5 most important things your loved ones need to know – but probably don’t.

If an item on your list seems “big,” just make a note about the first step to take. Maybe it’s contacting us for an estate planning referral, or to get a life insurance quote. Maybe it’s calling someone who can help with the garage full of “stuff.”

Step three: Start. TODAY. Pick some of those first steps and do them.

Step four: Schedule more time in your calendar to take the NEXT step. Rinse and repeat. Then don’t forget the final (and very important) step:

Step five: Relax and celebrate! As the unfinished items on your list become completed, you’ll increase the quality of your own life and peace of mind, knowing that you are leaving a better legacy.

Contact us if we can help.