The ACU Foundation Blog

After a decade of working in the financial services arena and knowing the human propensity to “put off ’til tomorrow” when it comes to money matters, this story is extraordinary to me.

Personal Finance blog Get Rich Slowly has an excellent guest post on planning ahead for your demise.  The father in this story went above and beyond, in my view, just to make things easier for his executor (his daughter, the author of the post).  This wasn’t just ordinary estate planning.  This was a process that took YEARS and the man was very intentional about it.  I particularly appreciated the section on “Settling Affairs”, as it highlights a potential deficiency in the “all children receive equal shares” theory.

I see a couple of possible lessons in this story.

1. Your executor has to be someone you trust implicitly.
2. Take a significant amount of time to think through your plan, and be willing to alter the plan along the way.
3. Realize that when an heir is also your executor, the emotions of the heir will make the job of the executor more difficult.  Plan accordingly.
4. When possible, have a real relationship with a banker, investment professional, insurance agent, attorney, and accountant.

What are some other conclusions that could be drawn from this example?

This chart shows (almost) all the money in the world.  Absolutely fascinating.  (Here is a bigger version; you can – and should – zoom in considerably further.)

An advertisement, yes. But the message is excellent and the delivery is sweet and funny.

We’re coming into the holiday season. I can say that officially now, ten days before Thanksgiving.  It’s not too early to begin thinking about giving: not just to those you love, but to those who have great need.

Watch the video.  It’s worth 20 minutes of your time.

You are not special.  “Stop worrying about what gifts we came with and whether or not we’re special and worry a little more about what we’re doing with those gifts.”

We are all a little bit crazy.  “Crazy people make better leaders in times of crisis.”

A lot of what you believe is wrong.  “It’s easy to hate an idea.  It’s easy to hate a creed.  It’s a lot harder to hate a person with whom we break bread.”

You are not as safe as you think.  “So why not stop worrying and start living?”

Your ideas are not that original.  “Your ideas will be as good or bad as the books you read and the people with whom you interact.”

You are chasing the wrong dream.  “Ever more people today have the means to live, but no meaning to live for.”

The time will never be right.  “These excuses that we construct for ourselves end up becoming the shackles that keep us from pursuing our dreams.”

The headline of this Politico.com article doesn’t really tell the story, but it’s still worth looking at:

Almost one in five men between the ages of 25 to 34 are living with their parents, according to a Census Bureau report released Thursday. About 14 percent of men lived with their parents in 2005, a figure that crept up to 19 percent.

More statistics at the link, including this one:

Married couples with children made up 20 percent of all American households, versus 40 percent in 1970.

Fascinating.

There’s a short film we’ve shown here at the Foundation many times, to many different groups of people.  It’s called Celebrate What’s Right with the World.  The whole film is this one man, a photographer for National Geographic, telling stories about people he’s met who have helped shape his vision of the world as a place full of small instances of wonder and magic that happen every day.

Through the news and the internet, in the stories from people we meet and work with and eat with, we can see that this is a tough time in which to be living.  We see hardship and tragedy and we begin to believe that’s what the world is like nowadays.  We see it, and we believe it.  Sounds like a clichéd motto, doesn’t it?

But instead of looking at this picture of the world and finding what’s wrong with it, what would happen if we tried to find what was right with it?

At the heart of Celebrate, the narrator, Dewitt, looks at the camera and says, “if you believe it, you’ll see it.”  If you believe there is goodness and beauty and joy in the world, then you’ll see goodness and beauty and joy everywhere.  It’s a small shift in thinking, and it makes a world of difference.  If you believe it, you’ll see it.  And if you see it, you should celebrate it.

What’s right with your world?  What can you find to celebrate today?  Look for something.  Then look for something else.  Then look for something else.  Share those things with others.

Is there someone who has made a difference in your life, shaped how you view the world today, or got you your first start in business, or gave you the best parenting advice ever?  Have you thanked that person?  Do so today.  And don’t forget to look for others who might need a similar helping hand or word of encouragement.

Do we stick our heads in the sand and pretend everything is okay and nothing’s wrong?  No.  Denying reality is childish.  But adults could probably stand to have a little more child-like optimism and faith about the world.  Choose to focus on the positives while seeking opportunities for improvement and actively work towards solutions to problems.  Don’t be afraid to celebrate what’s right with the world, especially in times of pain or hardship or tragedy.

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I’ll get back to financial matters next week.  If your family or a group of people you represent would be interested in seeing the film Celebrate What’s Right with the World, email me.

What if the worst happens?  What would we do?  What can we do now to help guard against the worst case scenario?

Instead of thinking “I’ll cross that bridge when I come to it,”  it might be worth thinking about “what ifs” today, even if things are going well for you right now.

Take a look at this insightful post by frugality blog The Simple Dollar.  It’s worth five minutes of your time.

1) The Brits are even less likely to create a will than Americans are.  Also of note:

Portuguese aristocrat Luis Carlos de Noronha Cabral da Camara made 70 strangers picked from a phone book his beneficiaries.

2) What your heirs need to know about life insurance (alternatively: life insurance, a primer)

3) John D. Rockefeller might have been worth over $660 Billion (in 2007 dollars) at the time of his death.  That would place his fortune at more than twice the amount of Andrew Carnegie, the next most wealthy American of all time.

4) Emotion in investing (hint: it doesn’t help).

5) And, relatedly, Average is Not Normal.

The following is a little bit “inside baseball”, but it’s useful to know if your situation is relevant.  I promise I won’t do posts like this very often.

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The WSJ has an article on the IRS clarification of some estate tax laws affecting people who die in 2011 or 2012.  The issue here is the new idea of estate exemption portability, whereby the surviving spouse can co-opt any unused portion of the deceased spouse’s estate tax exemption.

If a couple’s combined estate is worth $8M and the deceased spouse’s portion of that is $2M, that leaves $3M of the estate tax exemption unused.  That $3M can be added to the surviving spouse’s $5M exemption, giving the surviving spouse enough exemption coverage to eliminate any estate tax.

But according to the IRS, the surviving spouse will only get credit for the unused exemption amount if the executor of the deceased spouse files an estate tax return.  However, many advisors and executors don’t go through the process of filing an estate tax return if the size of the estate is under the exemption amount, or so says the article.

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In other news, the IRS has made some concessions towards the estates of those who passed away in 2010, particularly late December 2010.  Because of the extremely late Congressional action to act on the 2010 repeal of the estate tax, the IRS has conceded that estates may need more than the typical 9 months to file an estate tax.  Thus, just by asking nicely, estates that meet certain requirements can have up to a penalty-free 15 months to file the estate’s tax return.  Interest will, of course, be charged after month 9.

Some of you may have seen the picture of Faulkner University’s 61-year old football placekicker Alan Moore on the front page of the (printed) Christian Chronicle a week or so ago.  There was also a segment on ESPN about Moore a few weeks ago.

Yahoo produces a series called “Second Act” about people who have reinvented their lives as they’ve aged.  Here is their video about Moore.