What do you think of when you hear the word “Estate”? For some, it is a large house on a manicured green field, perhaps in England or on a headland on the Irish coast. For others, the image that springs into the mind is Scrooge McDuck in his vault. For them, “estate planning” is probably what the wealthy do.
Actually, each one of us has an estate and you will want to plan for what will happen to it if you become incapacitated or when you die. Your estate consists of the totality of your accumulated:
Financial Wealth;
Intellectual Wealth;
Spiritual Wealth; and
Human Wealth.
To remember these four components of wealth, we use their first letters, which spell “FISH.“
Your Financial Wealth is what you own – everything tangible and intangible from the change in your pocket or purse on up. Anything you own, from cars, trucks, homes, ranches, farms, livestock, pets, bank accounts, stocks and bonds, furniture, investments, and the clothes in your closet is a part of your Financial Wealth.
Traditional estate planning deals only with your Financial Wealth — how it will be used and who will control it during your life and after you are gone. This is certainly important because we can almost guarantee that the default plan the State of Texas has established for your Financial Wealth is not what you would want.
For example, the Texas default plan is that if you become incapacitated and can’t competently manage your assets, a court will pick someone called a “Guardian of the Estate” to do it for you. The judge will require your Guardian to post a bond equal to the amount a corrupt Guardian could possibly steal from you in a year and will require an audit to be done every year to make sure there is no “hanky-panky” going on with your Guardian’s administration of your Financial Wealth. All of that is very expensive.
The Texas default plan also provides for who will get your property if you die and how they will get it. When you die, the Texas default plan is for everything you own as separate or community property to become a matter of public record, often accessible on the internet. If you have children under 18, everything you die owning will be sold and each of minor child’s share will go under court supervision until that child reaches 18. His or her share will be used for his or her support, as the judge permits. Bonding and annual auditing of anyone the court allows to get their hands on any of that money will be required. Then, when your child turns 18, the court will give him or her a check for whatever is left. Suffice it to say that, in our experience, the average 18 year old is not a great money manager.
Unfortunately, traditional estate planning does not deal with the things that are most precious –– your Intellectual Wealth, Spiritual Wealth, and Human Wealth.
Your Intellectual Wealth is what you have learned in your lifetime – the fruits of all of the experiences you have had, from learning not to touch something hot to how to be a loyal friend. It is the wisdom you have acquired, the insights that have allowed you to make better decisions as you got older.
Your Spiritual Wealth is what you believe and why. You have spent your lifetime examining the world around you and accumulating this wealth. Without proper planning, your Spiritual Wealth, like your Intellectual Wealth, will go to the grave with you.
Your Human Wealth is all of the family history that you hold in your memory and what you know about what is important to you — your heritage. A family heirloom is not just an object – it is the object PLUS its story in your family. Your children probably never got to know your grandparents. Your memories of them are part of your precious Human Wealth that you will want to pass down to your children and their children.
At Brown, Lacallade & Lange P.C., estate planning is not just about your Financial Wealth. It is also about systematically and pro-actively capturing and passing on your precious Intellectual, Spiritual, and Human Wealth to those you will one day leave behind and generation yet to come.
To learn more about our how estate planning is different at Brown, Lacallade & Lange P.C., CLICK HERE: