Story Time: Estate Planning Crisis…Avoided

For privacy reasons, I’ll use pseudonyms, but this story is based on real events. It’s an example I often share with clients to illustrate the critical importance of completing your estate plan sooner rather than later.

A couple of years ago, I was introduced to Mary, a woman in her late 70s who lived alone and was feeling overwhelmed by managing her investment portfolio and various bank accounts. She was referred to me because I could help consolidate her assets, create a comprehensive strategy aligned with her goals, and keep her updated throughout the year through regular meetings. This was exactly what she needed to simplify her life and organize a financial picture that looked like an unfinished puzzle.

After visiting her home and spending hours learning about her life, it became clear that Mary had lived a successful and fulfilling life. Her main goals were to ensure her assets provided for her during her lifetime and that there were assets available to pass down to the next generation. Mary wasn’t tech-savvy and preferred paper statements for all her financial accounts, which actually helped because it would have taken weeks or months to piece everything together otherwise. An immediate risk stood out: at her advanced age and living alone, if something happened to her, there was no estate plan, and it wasn’t clear who to contact in an emergency. An unexpected medical emergency could create a massive financial disaster.

I suggested Mary meet with a local trust attorney to develop an estate plan. This way, if something happened, her successor trustee and I would know exactly what to do and could execute her wishes in a timely, cost-efficient manner. Mary agreed it was a good idea but preferred to wait until her accounts were fully transferred to my practice before starting another project. I told her I would bring this up again during our first review call in a few months and be the "annoying" person constantly reminding her of the importance of completing her estate plan. She laughed and said that would be fine.

A few months later, Mary’s assets were almost all consolidated under my watch, and it was time for our first review. When I called Mary, she sounded like her usual self, and we had our usual small talk. But as the conversation went on, things changed quickly. Mary started asking about turning off her paper statements, which was odd because she always kept a personal library at home with all her account statements. When I inquired further, Mary said something I’ll never forget: she wanted her statements turned off or sent somewhere else because her “parents were going to come home soon, and they’ll be upset if they see all this mail.” Mary was in her late 70s, and her parents had passed away in the late 90s. This was a clear sign of cognitive decline.

I assured Mary her statements would be turned off, and our review call ended shortly thereafter. After the call, I quickly thought of a solution. I called her son, Michael, whom she often talked about as the person who helped her with everything financial, medical, and personal. When I shared my concern with Michael, he quickly interrupted, saying, “Oh no, she said something to you too?” Michael had noticed similar signs of cognitive decline in recent conversations with his mom.

I contacted an estate planning attorney for advice. He suggested getting Mary in to complete her estate plan sooner rather than later to ensure she had a plan in place before any further cognitive decline. I relayed this to Michael, and he took it from there. Shortly thereafter, Michael met with the estate planning attorney I referred them to, and Mary completed her estate plan. A sigh of relief...

Michael became a co-trustee with his mom, and my next review was scheduled with him as his mom began letting him manage more of her affairs. During our first review call, Michael shared that he would be moving his mom to his state to keep a closer eye on her. About a year later, during another review meeting, Michael informed me that Mary’s cognitive state had declined significantly, and she was now under the care of physicians. He was extremely grateful that Mary had met me and that this whole ordeal was addressed before it was too late.

Some clients aren’t so lucky. Illnesses, accidents, or death can happen at any time, and often, you can’t quickly put together an estate plan. This can lead to expensive probate and estate taxes that could have been avoided with a few hours of time and a modest upfront cost.

I’ve heard from some clients that an attorney or previous advisor told them they don’t need an estate plan because they don’t have a lot of wealth. That statement always fires me up. What’s the magic number? If I have $499,999, I don’t need a plan, but if I acquire one more dollar, suddenly I do? No. Everyone should have at least the basics covered: a will, powers of attorney, and medical directives. Even if you’re not passing down significant assets, you can still benefit from having these documents in place.

From a cost perspective, whether you want to DIY your estate plan using services like Vanilla, which is a cost-effective service that I can provide you access to through my practice, Wealthstone, or if you have a complex financial picture with a high net worth and prefer to use an attorney, the benefits far outweigh the costs. For those with a net worth over $15MM, estate planning combined with tax planning can potentially save your family millions of dollars in estate taxes.

Having been in the finance industry for close to a decade and having met thousands of people with unique stories, I can’t stress enough how important it is to invest the time and money to complete your estate plan. You’ll feel a weight lifted off your shoulders, and your family will be grateful you did it too.

To learn more about estate planning, please don’t hesitate to reach out – I would be glad to walk you through the basics, or advanced topics, and introduce you to services such as Vanilla, or trusted estate planning attorneys capable of handling any situation. Prior to founding Wealthstone, I was a banker for many years, and a financial advisor at Morgan Stanley, therefore I can help you navigate the entire process, in an unbiased, fiduciary manner, while tailoring the conversation to your financial plan.

Zak Gardezy, CFP®

Founder & Private Wealth Advisor

Wealthstone Private Wealth Management

7014 E. Camelback Rd.

Suite B100A

Scottsdale, AZ 85251

Mobile: (480) 973-3560

Email: zak@wealthstonepwm.com