Spend it while you can!
Many of the areas of the practice of law involve preserving our clients’ assets for his/her estate and the distribution of those assets to children and grandchildren. The legal fields of estate planning, taxation, real estate, agriculture, elder law, family law, legislation, litigation and other venues have some element of the preservation of assets for future generations.
The purpose of this article is to suggest it may be time to advise some of our clients to spend their money and have some fun while they can. At the same time, we, as lawyers, should consider the same advice. Many clients (and lawyers) are sitting in their rocking chairs in a nursing home lamenting that during their golden years they did not take their wife, children and grandchildren on a 10-day Christmas vacation cruise to the Caribbean. Sure, it would have cost $10,000 or $20,000 if all the grandchildren went on the cruise over Christmas break. But, what is the value of 10 nights sitting down for dinner in the ship’s upscale dining room surrounded by your most valuable assets---your family.
Assume your client’s child wishes to go on a trip that includes the Louvre Art Museum in Paris or has been invited to play a piano concert at the Hermitage in St. Petersburg, Russia. Your client’s child has asked that the client attend the event but your client declines the invitation. The client did not want to take time away from his or her profession or business. The client claimed no one was available to fill in while he or she traveled overseas. The invitation was declined due to expense and time lost. What was lost was the bonding between child and parent because your client was unwilling to spend the money or time.
You are considering buying a new car, or membership in a golf club, but these are luxuries and you want to “save money for old age.” No one wants to die a pauper. None of us knows when we will die, or how much money we need for our old age. Instead of worrying about the amount that should be in the bank account for old age, you should be having fun.
Life insurance is a good investment and it provides for a spouse and children when children are young. But why does a senior continue to pay life insurance premiums for money he or she will never enjoy? Those premiums would be better spent on a cabin in the north woods near the senior’s favorite fishing lake.
Estate planning and federal gift tax lawyers spend their time planning ways in which their client may pass down assets with as little state and federal death taxes as possible. Some clients have been counseled regarding the sale or transfer of their home, even closing their professional practices and changing their residency to Florida to avoid the Illinois income and inheritance taxes. Some of these moves have been away from children, grandchildren, church and friends. Why not spend some of the estate paying the taxes and living in Illinois near children, grandchildren and friends. Stay in that home you have enjoyed as long as you can. As lawyers, do we ever suggest these alternatives to our clients or are we, like our clients, focused on “saving the estate” for our heirs?
Clients can make gifts of $5.2 million without paying a gift tax. Money, business or property may be included in those gifts. If your client has a business or profession, think of the pleasure the client could have if his child joined his business or profession. If your child joins your law office, give the keys to the corner office to your child, come to the office late, leave early for a golf game or don’t come to the office at all for a few days or weeks (as long as your cases are covered).
Instead of focusing on saving the estate for our heirs, should we consider what the heirs are going to do with the inheritance? Many farmers have spent their lives amassing acres of land. The farms are now worth millions. Jokingly, farmers have said that, if they died, their children would call the farm auctioneer before they would call the undertaker. Are the children going to spend the money wisely?
We have all heard the phrase “from shirt sleeves to shirt sleeves.” Is the business the client has built up over many years going to fail with the child or grandchild in charge?
In estate planning, do we, as lawyers, discuss with our clients that perhaps giving millions of dollars to children and grandchildren could be a detriment to the children or grandchildren? Will the money distract the child or grandchild from reaching his or her potential? Will the child complete his or her education? Will the child value family? Will the money make a better life for the child or his or her community? Some very large estates have provided what the client deemed adequate for a child, or grandchild, and the rest was given to charity.
We never see the “spend it while you can” philosophy discussed in writings and discussions in the legal community. We sometimes see wealthy donors making substantial gifts to charities in the donor’s lifetime. Lifetime gifts should be part of estate planning strategies. The donor may receive more pleasure from recognition of the lifetime gift while the donor is still living. The charity is also happy that it did not have to wait until the donor died.
Many lawyers are workaholics. They work long hours and are still turning the client’s troubles over in their minds late at night. It’s time to ease up. Close down the office if necessary. Spend an afternoon at the casino. Take a trip up the Rhine river or a train trip from Moscow to Beijing. Buy a new Mercedes convertible. You earned it. Now spend it!
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Member Comments (1)
Great advice. Thank you for sharing.