Douglas Goldstein: Jack Tatar has written many books and many of them are to do with
end of life planning.
He wrote an article on Market Watch called How to Make End of Life Planning Easier.
How can people make end of life planning easier?
Jack Tatar: End of life planning requires a need for having real conversations between
family members and as well as incorporating the need to have professionals such as a financial
professional and probably in the estate planning legal expert involved.
I find the most difficult aspect of it is not so much working with the estate planning
person who has the expertise or the financial planning person who has the expertise and
the knowledge and typically the relationship but it’s getting that conversation started
between the generation so that everything is worked out properly between generations
and there is no unspoken expectations or anything else like that comes into play at the wrong
time after things that happened that I’ve seen in my experience has torn families apart.
Douglas Goldstein: One of the words you said which was the importance of having conversations
and I’ll tell you that I know it’s difficult to have the conversations.
As a financial advisor myself, I’m also that guy you mention where the family comes
to me and I speak with the parents and the grownup children about that conversations
but one of the things I realized is that getting to that level is difficult and frankly even
with my own parents, I’m very good at doing it professionally but you know when you have
to approach your own parents and say “Hey, we should talk about the problem of driving
or the problem of safety in the house” it’s awkward.
What can people do before they get to the professional to bring their parents along
to that conversation?
Jack Tatar: It’s is very awkward and I call it “the talk” and in much the same way
as your parents had the talk with you when you were younger, I put a lot of responsibility
onto the adult children to say there is a need for you to have the talk with your parents
and invariably I have found that we end up having the talk but we end up having the talk
too late.
It’s often towards the end when there’s a lot of things that we can’t do and a lot
of changes we can’t do, estate look backs and things like that or there’s certain
expectations that the sibling was going to get that or that and it’s a little too close
to the end.
So I advise families to have the conversation sooner rather than later and the optimal time
to do it I feel is when you’re either nearing or close to retirement, when you’re really
starting to think about what this next stage of life is going to look like, it’s a great
time to sit down with your parents and even for the parents to promote the conversation
and have the discussion at that point in time.
So that you’re having it as I said earlier rather than later because most of us have
the talk but we just have it to late.
Douglas Goldstein: What would happen let’s say if people neglect to have the talk?
What are some of the worst case scenarios that might arise?
Jack Tatar: What I’ve seen happen and it’s interesting because whenever I bring this
up to people and I mention this everyone has a story, everyone can say “This happened
in my family.
I don’t speak to my brother anymore or I don’t speak to my sister anymore because
of something that really we didn’t have the talk at the right time.
So what ends up happening is not having the talk can tear families apart and it could
be over a small amount of money, it could be over some tchotchke that some sibling wanted
in the house that was not planned for.
It could as simple as that.
So not having the talk really tears families apart as well as also it causes financial
implications, it causes situations where if you don’t do this planning, you don’t
do the talk, you can really end up giving away a lot of money to those people outside
the family that you don’t want to give that money to.
So there are financial issues here as well.
It’s the family issues and it’s the financial issues that really become the worst case issues
here.
Douglas Goldstein: Where you would open up the conversation?
Jack Tatar: You asked early how do you have this talk and how do you have this conversation
and it is an uncomfortable conversation for people.
I have found one of the best ways to do this is rather than being direct and saying to
your parents or saying to your children “We need to sit down and talk about this and kind
of you get the walls up and everything else” I have found that some of the best ways to
do this is to just bring up stories or situations that have happened and I’ve had success
stories with people who have said “I had the talk with my mom or dad because I referred
to something that happened to our Uncle Sam who had a situation where now his family isn’t
talking to each other because they didn’t have the talk.”
So a lot of times you can bring in personal situations that you’ve seen from friends
and outside family to say to your mom or dad “Look, I don’t want to happen what happened
to you in us, what happened to Uncle Sam and his family.”
I think that a lot of people they look around and they can see those situations where things
haven’t gone well where they haven’t planned on long-term care, where they haven’t planned
on making sure that the estate is transferred properly and bringing up those points and
say “I don’t want that to happen to us.
I want to make sure we keep our family together.
I want to make sure that all your wishes for your finances are done according to what you
want not what the government wants and therefore let’s have that conversation.”
So a lot of times it’s drawing on their past experience but sitting down and then
like you said one of the things you talked about, financial is there as well but it’s
also I found the best question is asking your mom or dad or for your mom and dad to say
“This is what I want.
This is what my wishes are” because invariably it’s the parents money, it’s things that
they worked hard for, what are your wishes, what do you want, that is a real good starting
point rather than saying let’s take a look at your finance, let’s take it a look at
your property, what do you want.
Douglas Goldstein: A lot of the people that I talk to are cross boarder.
Any special issues you think should be brought up or discussed when it’s a cross boarder
relationship?
Jack Tatar: There are things that are involved in that.
I just want to come back to one thing that you mentioned which is the fact that having
a professional such as yourself is very important because I have found that a lot of times that
professional can act as an intermediary and is a person to kind of bring families together
and if family has a relationship with a financial professional such as yourself and you’ve
shown or you’ve taken care of the family, that allows you to kind of bring the families
together and have these discussion.
So I think it’s very important that you have that professional whose involved in these
conversations.
A lot of times they can drive it but to your question about cross boarder issues, I think
there’s a lot of involved and I think a lot of these will require people to take a
look at exactly what the situations are that are out there and base in the countries, and
this is once again where professional can come into place whether it’s a professional
who is an estate planning specialist or financial planning specialist.
When you have situations like this where you have potentially families in the US, families
in Israel maybe even some joint citizenship issues, it’s very important to take those
into consideration because you have different laws in terms of tax, lifetime exclusion amounts
that vary between countries.
So what we’re seeing is we’re seeing a lot of people are starting to work with either
doing a will in each country or to do something that’s even be known as a geographic will,
something that covers both no matter where the country is but what’s very important
is you need to understand the laws in whatever countries there are that are involved whether
you have your accounts in the US, accounts in Israel but also understanding that if the
family who is going to be passed on the finances is in the US.
Some of those exclusion laws, some of those financial requirements could be different
in the US as they are in to work with an expert who understands both
countries.
So there’s a lot of the merits.
It’s interesting you mentioned that.
I just tweeted out this morning a very good paper that I saw on estate planning for cross
boarder families out there.
So there’s not a lot out there on it but whose you to speak to a specialist who is
aware of all these laws that are out there.
Douglas Goldstein: How
can
people follow you and follow your work and learn more about what you teach?
Jack Tatar: If you go to my website which is www.safe4retirement.com, you’ll see information
on myself and my books.
I invite you to take a look at my book which is called Having The Talk: The Four Keys to
your Parents’ Safe Retirement which outlines a lot of ways to have the discussion between
family members and if you go to the website www.havingthetalkbook.com, you can actually
download a free copy, please go and download it and it’s on my book called What the Deal
with Having the Talk Between Adult Children and their Parents.