Mary Owens: Preparing for the final journey
We are about to accompany Tony and Martha through a journey of Tony’s passing. All couples who have experienced the challenges of such significant life changes know there are periods of joy, stress, exhaustion, frustration, and grief.
This journey will be enlightening for those who want to increase the periods of joy, celebrating a life well-lived together, and decrease the negative periods that arise when a loved one passes. Simple tasks completed properly are ever so important for a peaceful transition. Done well, it can be one of the greatest gifts to the remaining loved ones. Left undone, the resulting stress is an unkind burden.
Tony and Martha were married over 30 years ago. It was a second marriage for them both. Tony has a son and daughter from his previous marriage, and both of his children have blessed the couple with grandchildren whom they adore. Martha had one daughter who was killed in an auto accident five years ago. She still grieves her loss, but she is very grateful for her stepchildren and loves them as her own.
Tony and Martha are very comfortable financially. Both had successful careers and have recently retired. They are planning several international trips to enjoy their newfound freedom. Life ahead looks like years of pure joy and relaxation.
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For six months, Tony had been dealing with a hacking cough. Martha finally put her foot down and insisted he was going to see a doctor. The news was not good. Tony was diagnosed with a large lung tumor. Fortunately, it had not spread and was still operable. He would also need chemo and radiation. Tony was a strong man, appearing robust in health. He worked in his garden almost daily. The doctors warned that the treatment was going to be rough, but survivable.
Tony didn’t seem to be phased by the news. He was upbeat and confident that his prior good health would see him through. Martha was terrified, but she hid her immense concern from Tony. She felt his positive attitude was important for his battle and did not want to do or say anything that might reduce his spirit.
The months rolled on with one doctor appointment after another. Tony grew increasingly frustrated with the long process of coordinating all the appointments before his surgery could be scheduled. The risks and recovery time were increasing with every medical test and examination. Tony’s optimism was rapidly changing.
Martha was no longer able to withhold her anxiety from Tony. She was truly frightened and wanted to make sure their affairs were in order. She pulled out their estate planning documents and realized they were terribly out of date. For instance, Martha and Tony had purchased a new home three years ago and combined a rental property into the new home they owned together. Previously, their principal residence had belonged just to Tony, and it was left in trust for Martha to live in until her death, with it going to Tony’s kids at Martha’s death. Now the home was equally owned by them both, no longer in the trust but held in joint tenancy.
Furthermore, Martha’s parents had recently passed away. She paid down the mortgage on their new home with some of her inherited assets, and they then refinanced to lower their monthly payment. When they refinanced the loan, the bank was changed without either of them realizing it.
Their retirement accounts had also changed. They had previously designated the beneficiaries of their 401Ks as 50% to each other and 50% to their own children. Now those assets were in IRAs, and the primary beneficiaries were each other, with Tony’s children as contingent beneficiaries.
Tony and Martha had not thought through what should happen with their assets if they both died. The trust assets were going to be split between their three children, but now there were only two. Tony was leaning on giving everything to the two kids. Martha wanted to leave a portion of assets to the grandchildren in trust for their education.
To make matters worse, their health-care directives were also out of date. Martha had named Tony as her primary agent for medical decisions, and her now deceased daughter as the secondary. If Tony died or became incapacitated, her medical directive would be useless. Tony’s also had issues. He had Martha as his primary agent and his daughter as secondary. But in recent years, Tony and his daughter were having a lot of relationship issues, and Tony no longer trusted her to be able to handle this responsibility without a lot of unnecessary drama. He wanted it to be changed to Martha as primary and his son as secondary.
Martha had already scheduled an appointment with their attorney to get the documents updated. Tony agreed — this was on fire and had to be addressed. But he had lingering doubts about how it should it be written. He wanted Martha to remain financially secure. She had shared so much with his children already. She had given each of them down payments on their homes out of her own parents’ inheritance. But he really wanted to leave his kids something directly from him if he died first. His brain was clouded and confused. How could he accomplish this while keeping Martha secure?
One night, Tony took the original trust documents and began lining through paragraphs and scribbling down notes. Nothing he did actually changed the legality of the original document, and nothing he wrote made much sense either. He was a scared man trying to figure out how to best serve his family and show how much he loved them. The more he wrote, the more distressed he became for his family’s future.
Next month, we will continue with Tony and Martha. We all know that love is primary in our family life, but completed documents are primary in the administration of our affairs.
Mary Owens, Principal/Branch Manager, RJFS, 426 Sutton Way, Suite 110, Grass Valley, CA 95945, 530-272-7500. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC. Owens Estate and Wealth Strategies Group is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax, legal or mortgage issues, these matters should be discussed with the appropriate professional. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Mary Owens and not necessarily those of Raymond James. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.
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