I recently had a client in my office for whom I did a full financial plan. The cool thing about financial planning is that you cover several aspects of personal finance. One of them is estate planning. Most people underestimate the numerous tasks related to estate planning and wrongly identify a close (and trustworthy) person to be the sole liquidator. However, managing an estate is more complicated than simply writing a few checks! Fortunately, for those who can afford it, you can name a professional among your liquidators. I have listed the reasons why your estate should pay fees once you are dead to have someone manage your assets:
Picture this: you are working 50 hours a week, you and your wife are stuck between work and picking up the kids at daycare, the older one is playing hockey 3 times a week and your younger daughter takes dance class on Saturday mornings. You get home one day and open your mail; there is a notice stating that you have been named liquidator for your (single and rich!) deceased uncle that lives in city far, far away. Do you really think you have time to get there, make a list of all assets, find the will, have it homologated, open an estate account, etc.? You would be relieved to see that there is another liquidator in the notice, a professional, perhaps an estate lawyer from his financial institution who will be there to assist you 😉
I think that I would not be able to be the only liquidator for my parents or my wife. It is a hard task when you have to go through a lot of emotions at the same time. You may not take the right decisions or think about everything. A professional can manage the estate considering tax implications and legal aspects.
If you have brothers or sisters, taking care of your parents’ estate could create tension in the remaining family. One may have his own thoughts about how to best manage the investment portfolio or split the rental properties. A professional will be there to ensure a non-biased perspective and respect the will in its entirety. In this way, the decisions may be easier to accept by all family members. They have seen that the process is managed by a neutral party not related to the family.
Experience (legal aspects and tax efficiency)
Unless you are in the midst of a string of serious bad luck, you won’t be the liquidator too often in your life. You might not feel at ease with the legal aspects related to the liquidator’s tasks. It’s even worse if you are not a fan of personal finance to begin with! So, instead of getting stuck with such nightmare, you can ask a professional whose job is to liquidate estates. Even though there are fees charged, he will not only take the burden off your shoulders, he will probably provide sound advice. This will help the estate save money and pay for a part of the fees (if not totally).
One last piece of advice when choosing a professional liquidator is to pick 1 or 3 liquidators in your will. If you pick your brother and a professional and they don’t agree, no decisions will ever be taken regarding your estate. With an odd number, at least there can be a tie-breaker. 😉 Depending on the services offered, a professional liquidator usually charges in the neighbourhood of 2% of the estate assets. It may seem pretty high but it is not that much to buy piece of mind and professional advice during a difficult time in the lives of your family and friends.
Other post in this series:
image source: Matthew Stewart
|How I Suck at Not Paying Debts||Hitting 6 Figures Income at 28|
|How I Get a Huge Income Raise Each Year||Making $125K Online in 12 months|
|How I Buy Blogs||Most Debated Articles: The Primerica Saga|
|How I Have Survived My MBA||What is So Wrong With Making Money?|
|How I run multiples blogs and makes money without burning out|