The Human Side of Estate Planning: Come on in-the water’s fine!!!

by | Jun 29, 2021 | Uncategorized | 0 comments

The world of estate planning is divided into two worlds: the quantitative side and the qualitative or soft or human side. Most estate planners far prefer the world of the quantitative side of estate planning, stay there and never venture into the soft or qualitative or human side.

 

There are two principal reasons why most estate planners shy away from the soft or human or qualitative side of estate planning. Why?

 

The first reason is that the tax side is easier and is easier to quantify the estate planner’s alleged value to the client, which usually is proven with what I call a Jenny Craig analysis, i.e., you quantify the tax exposure before implementation of the recommended plan and compare it to the reduced tax exposure after implementation of the recommended plan, and the delta represents the planner’s alleged value to the client.

 

Unfortunately, not only is this analysis dangerous and less than beneficial to the overwhelming majority of clients, this analysis is erroneous and incomplete. For starters, it overstates the value because the simple fact is that the federal estate tax is, and always has been, a voluntary tax. As Professor Cooper wrote back in the 1970’s, it is possible to arrange one’s estate to owe zero federal transfer tax, irrespective of the size of the estate. Indeed, Warren Buffet and Bill Gates can have zero tax estate plans. If even fat cats like Buffett and Gates can have zero estate tax estate plans, how really hard is it to do?

 

This analysis also is misleading because it is silent as to the potential emotional, psychological, and potential future litigation costs to the families of our clients of the Jenny Craig estate plan because these plans, since the family dynamics were ignored and shoved into a “one size fits all” plan, the recommended estate plan comes with a significant risk of either causing or heightening dysfunction among the survivors.

 

The best piece of advice I give to estate planners is to understand that a client’s estate planning decisions will affect the relationships of those who survive them. Those effects can be positive or negative. Communication is the key. The sad truth is that perfectly drafted estate plans tear families apart every day in this country, and it’s due to a failure to address the soft or human or qualitative side.

 

The second reason why very few estate planners venture into the soft or qualitative or human side of estate planning is much more complex. But it begins, and in many cases ends, with our humanity. Delving into the soft or human or psychological side of estate planning comes with greater risks and uncertainty. Some justify their refusal to go to the other side because they weren’t academically trained for it. Please. The truth is that most of what we need to know to be competent estate planners wasn’t taught in law or business school. Did that stop us? No.

 

Going to the other side of estate planning often requires the estate planner to get into the family muck, and this makes most estate planners very uncomfortable because it makes them feel vulnerable. Some estate planners pride themselves in their poise and confidence before clients and worry that showing their emotions is a sign of weakness that could cause their clients to lose confidence in them. To this I say nonsense!!! If anything, the client will become more connected to the estate planner who allows his or her humanity to show through the fake patina of phony professionalism.

 

The sad truth is that joining your clients on the emotional side forces estate planners to face their own fears, e.g., fear of mortality, their own estate planning, etc. In his seminal book, Death, Property, and Lawyers (Dunellen Press 1970). Professor Thomas Schafer states that lawyers are as fearful of discussing death as clients are and are just as willing to gladly dance around the issue. The simple truth is that we’re all going to die one day. Even estate planners.

 

I urge you to face your fears head-on and join me on the soft or qualitative or human side of estate planning. You’ll get used to it very quickly because it’s more consistent with your human nature. Try though you might, you’re human. Drop the masks and facades of being a pure, antiseptic quantitative estate planner. I promise you that you’ll become a much better estate planner, your clients will get significantly better estate plans, fewer clients will resist signing the documents you suggest that they sign, and you’ll be a much more trusted and valued advisor. It’s a win-win across the board and beats the proverbial crap out of the Jenny Craig estate plan.

 

Come on in. The water’s fine!!!