Dear Moneyist,
I retired from practicing solo medicine on March 30 and was diagnosed with Stage 3 pancreatic cancer a couple weeks later. I started chemotherapy to provide me some time to get my affairs in order and have required several procedures to maintain drainage of my pancreas and liver. The mean survival rate after completing chemotherapy is one year.
I was advised to sell all of my stocks in my IRA and put them into a money-market account. My sisters are the beneficiaries for my Roth IRA. My rollover IRA is set up to fund several charitable contributions that are important to me. I set up 529 plans for my four nieces and nephews, and have asked my sister to fund the plans with the proceeds from sale of my house after I pass.
I have a 21-year-old nephew that I have never met and have little contact with. His mother is my half-sister. I understand that he hasn’t gone to college and that he is unhappy with his construction job. Should I set up a 529 plan for him also? Or should I include him as a beneficiary on my IRAs and let him decide what to do with the money?
Should I tell my sisters how I am distributing my money in advance or just give them a rough idea of what they will receive?
JM
Dear JM,
Thank you for writing into this column with your questions, especially at such an important time. It means a lot that you shared your story with me and our readers. I commend you for being so practical and forward-thinking by getting all of your affairs in order now. It not only shows your mental and emotional strength to deal with such unexpected news and focus on what you do have control over, but it also says a lot about your character that you are spending this time thinking of others. Of course, that’s the secret to a happy life: Being available to help people and considering their needs when making a decision such as this.
There is something quite special in your desire to help your nephew, even though you don’t know him. It seems fair or, at the very least, considerate. There is nothing more valuable than leaving something behind that has the power to enrich and/or transform the lives of others. One hopes we spend a lifetime doing just that — little by little — by merely being present, being generous with our time and forming solid relationships with others. As I said to another letter writer last year, there’s one pursuit that has the power to transform not only our financial lives, but also our expectations about what we can achieve; I can’t repeat it enough: education, education, education.
This is a time to trust your instincts, in addition to seeking the requisite financial advice on how to structure your assets and divide your estate in a manner that seems reasonable to you. You can sell your stocks or you could sell some of your stocks and name the rest as beneficiaries to people in your life who you believe would benefit from them. That way, they would keep growing, notwithstanding a recession that some economists predict for next year. I would leave as little up to chance as possible. It may give you more peace of mind to put your home in a trust with instructions on when/how it should be sold and/or add other names to the deed. You can read more on that here.
As to your final question, tread cautiously with regards to seeking the counsel of other people in your family on your estate. People will bring their own experiences, financial situation, personalities and family history to the table. It could quickly become a stressful and complex endeavor. These assets are the result of your life’s work. Of course, you don’t need the Moneyist to tell you that time is a more valuable commodity than money. You, more than anyone, are aware of that. So while you’re distributing the latter, you should keep an eye on the former.
With the right professional advice, you should be in a prime position to feel both satisfied and proud that you were able to leave a legacy that will benefit those you love. Your presence and thoughtfulness will be felt long after you’ve gone.
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