What should I do with my estate, if I have more than I need for my own support?

This article is not filled with sage legal advice on technical points. I simply would like to make a few observations, then offer a personal suggestion or two.

One of my jobs as an estate planning attorney is to figure out how clients can distribute their estates to heirs after their demise with the least amount of fuss, bother and expense. I am not supposed to explain how they can do that in a way that can spread some genuine joy and happiness, but I will try to do so in this article.

What I have observed far too many times is that clients have, through luck or wise decisions, accumulated significant estates, and have probably overshot the mark. In other words, they have too much–far more than they need to take care of themselves comfortably.

Although making gifts to take advantage of the annual gift tax exclusion is sometimes done for estate tax planning, this often takes the form of a check or a stock certificate being mailed impersonally to their children from the attorney’s or the accountant’s office. This certainly is appreciated by the recipients and might cause some satisfaction to the giver, but why couldn’t the parent try to find a more creative, enjoyable, memorable way to share the wealth?

For example, if a widow has a home that is paid for, a regular pension and investments and bank accounts worth, say, 3 or 4 million dollars, even in difficult economic times, the widow is going to be hard-pressed to keep her investments from increasing in value each year (not counting the occasional stock market crash), since she probably has no extravagant spending habits and generates a reasonable rate of return on her conservative investments. If she makes gifts totaling $39,000 to her 3 children each year, that will help her estate tax situation somewhat, but won’t solve the problem completely, and, as noted above, may not generate many real smiles.

Why couldn’t the widow, while she is still relatively healthy, arrange and pay for a wonderful family reunion for her children, in-laws, grandchildren and anyone else she is close to? She might, for example provide first class tickets to Maui and arrange nice accommodations for everyone at a beachfront resort. This would be far more memorable and pleasant than just sending a check to her children, and a “Super Reunion” has the added advantage of enhancing the closeness of her own children among themselves, not to mention the next generation of cousins. Such a reunion would be remembered fondly for generations. And she probably could do it again next year!

In my opinion, dying with two or three million dollars still in the bank is a shame if some of it could have been used on family-building activities. Even if you overdo it and spend so much on family fun that you have financial needs later on, I suspect your loving children would be more than delighted to pitch in and help you out. I fear we are so concerned with just surviving that we fail to enjoy what we have. Accumulating investments just so we can take comfort in reading the 7- or 8-figure monthly statements from our stockbroker, while ignoring opportunities to strengthen our family ties 2, 3 and maybe even 4 generations down, is sad. We are on the earth to enjoy it, and that means more than just surviving.