April 12, 2022—When it comes to wealth planning, putting off until tomorrow what you can (and should) do today may lead to unwanted consequences down the road. For peace of mind, your plans should be up to date with your current life and business situations. In this podcast, National Director of Wealth Strategies Drew Horwitz explores the main reasons people procrastinate when it comes to making decisions about their financial, estate, or wealth plans, and he offers helpful strategies to overcome each one.

Overcoming Planning Procrastination 

Hi, thank you for tuning into today’s Emerald GEM, which stands for Get Educated in Minutes. I’m Drew Horwitz, national director of Wealth Strategies for Wilmington Trust’s Emerald Family Office and Advisory and your host for today’s podcast. In today’s GEM I’m going to answer the question:  How can you overcome procrastination when it comes to completing your financial, estate, and wealth planning?

Introduction

Many of us procrastinate. Whether it’s starting an exercise routine or diet (or sticking with it), buying or selling a business, sitting with your children to discuss family wealth, or updating and implementing your wealth plan, we often find reasons that sidetrack us from doing something we believe puts us in a better future place. Why does it so often take a significant event to cause a person to take action that could lead them and their family to a better place?

I start our podcast with a working definition of procrastination. Then I explore reasons frequently shared by our clients as to why they procrastinate and strategies to overcome each. Any of these reasons can derail any stage or part of the planning process. The stakes can be emotionally and financially high for a family that has an outdated, incomplete, or worse, no plan at all.

Defining procrastination

Procrastination can be defined as delaying a task that needs to be done even though it may come with the understanding that you may be worse off from the delay. As it relates to planning, procrastination can occur at any stage in the process from starting through the implementation of your decisions.

Making decisions that may involve negative emotions

The first reason shared by our clients is negative emotions can be unpleasant. It can mean dealing with feelings about failure, confidence, lack of control, and the uncertainty that comes with your decisions today on the future of your family and wealth. Any of these reasons trigger anxiety.

It follows that planning can trigger or cause these negative feelings. Having to discuss your wealth with family members or making difficult decisions about your heirs, especially if you are not ready to make those decisions, can be difficult at best. It could mean grappling with issues where you do not have much experience which raises concern that you will make a mistake. Planning may not have deadlines, lack clear goals and may be ambiguous at best. It forces you to think about challenging issues such as your mortality and loss of mental or physical skills at the same time you are thinking about how to protect and transfer your wealth in a meaningful and appropriate way. The planning strategies may be complex, and you may not see or feel the results until far into the future. These issues can be compounded when spouses have differing opinions and feelings, or your children have different abilities and skills requiring unique approaches for each child. Business owners usually must plan for the additional complexity for succession of the business, whether through partial or full exit by sale or management transition. 

Delay in dealing with these issues could compound the problems. The reality is that we are not given a set amount time here. In the ideal world, we see ourselves walking off into the sunset under our own power and terms. There is no crystal ball to tell us whether, when, and if we will lose our ability to make decisions for ourselves, let alone when we may pass away.

Kicking the can down the road can place those you are trying to protect in a far worse situation, as they no longer have the benefit of your guidance if they are called to act. For example, if you pass without a will, the court will have to name an administrator to probate your estate. The court may pick a family member who you did not intend to serve in that position, potentially causing unnecessary family conflict. An unprepared family may lack clear leadership, skills, time, and experience that may be compounded by coming together to make critical decisions at a high stress time.

Honest and open dialogue exploring the benefits and opportunities of maintaining the planning status quo may help. Asking questions such as:

  • What are the consequences of not engaging in planning in the near and longer term?
  • What are the best outcomes for you and your family?
  • How would you feel if the planning was completely successful?
  • What’s the worst result if you do nothing?

The earlier you begin your planning, the more time you may have to navigate through emotional issues that may arise and plan for difficult conversations with family members, including engaging professional advisors to assist you. Time allows you greater opportunity to develop a well thought out actionable plan while thoroughly vetting its strengths and challenges.

The planning is permanent

The second reason a client will delay engaging in planning is the concern the planning is irrevocable.    The idea of “permanent” often arises during conversations about trusts. The client believes that an irrevocable trust cannot be amended or modified—it’s essentially set in stone. 

Your wealth plan should be expected to evolve over time to meet changing family needs. Your core estate planning documents such as your will and revocable trust can be modified until you die. Beneficiary designations, fiduciary appointments (such as executor or trustee), and supporting documents such as powers of attorney, living will, and durable power of health care can all be changed until the time of disability or death (depending on the document). 

An irrevocable trust can often be modified, especially while the grantor (the creator of the trust) is alive.  In some states, there are multiple ways a trust may be changed or modified. For example, when a trust is administered under Delaware law, there are both judicial and nonjudicial ways to modify or reform the trust document, depending on the factual situation and client objectives. Trust documents often provide a beneficiary a power of appointment that could allow the power holder to “rewrite” trust terms for the next generation including whether to continue the trust itself. In addition, trust documents could have a trust protector with substantial authority to make changes to the trust document for the family’s benefit.

A well thought out plan should provide safety valves and mechanisms to meet unexpected future events. There is a wide array of tools available under the law to modify your planning. Importantly, your plan should be revisited periodically to determine whether adjustment is necessary to bring you back to your desired course. A flexible plan could help alleviate the very real concern that strategy cannot be modified if it is not working as intended.

Perfect planning

A third reason shared by our clients is the desire to create a perfect plan which is a moving target. For example, couples often delay the drafting of their wills as they cannot decide on the guardian for their minor child or children. The reality is nobody will be as perfect for your child as you. It does not change the reality that a guardian for your child must be selected. 

Instead of waiting for perfect, you can make progress if you think of the planning process as ongoing with periods of productivity based on your priorities and that matches your time and energy. That progress can be incremental or substantial. The key is moving forward by making the best decisions with the available facts and circumstances you know today.

Planning is never really done. It evolves as family needs, wants, and desires change. It may be influenced by external factors such as tax laws and the economy as well as internal events such as births, marriages, divorces, purchase and sale of a business, your health, and your life experiences generally. Whether you are evaluating the performance of your life insurance policies, reviewing beneficiary designations, or considering the role of your wealth in family, philanthropy, and legacy, there will usually be additional planning to do. Accepting that your plan will not be perfect can help free you to take on the most pressing issues today—potentially placing you in a better place than yesterday. Don’t let perfect get in the way of good.

Overwhelmed by the planning process

The fourth concern, overwhelmed by the planning process, is often shared by our clients as the reason they procrastinate with their planning. Planning may involve complex income, estate, and gift tax laws while dealing with the emotional issues that come with making decisions about how to care for and protect your family in the event of your disability and death. It could also involve exciting but hard-to-define issues such as the role of wealth in the family, what it means to be a member of the family, and your own personal legacy. Taken together, it can be an overwhelming experience that can delay making important decisions or worse, stop the planning entirely.

Moving the process forward often starts by developing a project plan and timetable. For example, let’s say you wanted to make a lifetime gift to a trust for the benefit of your children and grandchildren. How could you look at the overall objective without creating so many steps that it becomes too complex? A straightforward approach might include:

  • Determine the family goals and objectives—what outcomes do you want?
  • Engage your advisory team to discuss various ways to accomplish the gift.
  • Sign the documents.
  • Communicate with your children and grandchildren (which could happen at any stage in the process).

Staying at the 10,000-foot level, the process can become more manageable for you. Leverage your advisory team. They can be there to assist you with each step in the process and often shoulder many of the actions or tasks that may cause the feeling of being overwhelmed. They will know when to bring you in to each step in the process to make the decisions necessary to move forward.

Conclusion

The reasons you might procrastinate in your planning are completely understandable. However, the danger of not having a wealth plan that works remains. Waiting for a catastrophic event to occur should not be the trigger to work on your plan. Instead, taking time to prioritize your objectives, setting a reasonable timetable, and working on the number of issues you feel most appropriate, may minimize the potential to be overwhelmed. Taking the time to be thoughtful about your planning provides the opportunity to fully understand the benefits and challenges of your decisions before you make them. It may reduce the need for major course corrections in the future. 

We believe that once you are in planning motion, you are more likely to stay in motion. Planning can take some time. Waiting to year end when tax laws are expected to change, or the diagnosis of a serious illness or business disruption, may not be the ideal time to get started. So, stay in motion, recognize that planning is continual, and make progress, no matter how small to close the gaps. Good planning is, well, good planning, even if it’s not perfect. Leverage your advisory team. They are there to provide information, guidance, and experience at the right times throughout the planning process to help you move forward.

Overcoming planning procrastination may not always be easy. However, you and your family may sleep more soundly knowing that you did.

Thanks again for joining us today. Please contact your Wilmington Trust advisor if you have any questions about how you can overcome procrastination when it comes to completing your financial, estate and wealth planning. We would be glad to help you. See you next time!

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The information provided herein is for informational purposes only and is not intended as a recommendation or determination that any tax, estate planning, or investment strategy is suitable for a specific investor. Note that tax, estate planning, investing, and financial strategies require consideration for suitability of the individual, business, or investor, and there is no assurance that any strategy will be successful.

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