Category Archives: Tips

Why Haven’t I Done My Estate Plan?

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As I write this I must confess that I my draft estate planning documents are on my desk waiting for me to review and finalize.  Every time I take a car or plane trip, I worry that if something happened to me there would be confusion and if my husband dies, (I’m in a second marriage), I would get nothing because our estate plan is not updated.  Without upfront estate planning our hard earned assets may not help our loved ones, and the process for our kids will be overly complex, expensive, stressful and divisive at a time when they are also grieving.

I know there are many of you out there in the same boat!

We sat down with the 3 founding partners of Birchstone, Moore, LLC , an amazing woman-owned boutique law firm offering estate planning, probate and trust administration services to clients in the Washington, DC area.  Sarah Moore Johnson, Laura Stone, and Jennifer Birchfield Goode answered our questions about the issues and pain points in the estate planning process and this blog post is the first in a 3-part series that will hopefully bust some myths and provide you with information and motivation to do the ultimate act of love and self-responsibility, Estate Planning!

Together we identified three common reasons most of us avoid doing our estate documents:

Obstacle #1 My family will take care of everything, why should I worry, I’ll be gone. I don’t want to think about dying.

Sarah Moore Johnson:  We recognize that thinking about your own mortality and estate planning is about as fun as going to the dentist, but if you have kids, you must at a minimum take care of at least a few items!

First, if you have minor children, you absolutely should have a Will in place that names a guardian.

Second, in most cases, leaving your assets to minors is not a viable strategy.  If you leave more than $10k to a minor as a beneficiary of your IRA or insurance policy for example, the state will appoint a guardian of the property to manage those funds until your child is of age…usually 18.  Who will that guardian be?  You will have no say.  Sarah advises that your beneficiary designation form for your retirement accounts and insurance policies should name a family member or friend, “as custodian for child under the Uniform Transfers to Minors Act”.  If the amounts involved are high enough, creating a trust for the minor and naming the trust as beneficiary instead of the minor is an even better option.

Laura Stone:  Estate planning is really important for blended families.  Balancing the needs of your spouse as well as your children from your first marriage can be complicated and requires planning.

Obstacle #2 My estate is so simple/small, why do I need to have complicated and costly estate documents?

One of the big reasons families hesitate to put estate documents into place is the cost, however, according to Sarah, this is a classic case of pay now or pay more later.  The problem with using Legal Zoom or another “off the shelf” program for your Will is the lack of counseling those services provide.  An attorney will discuss with you the pro’s and con’s of the people you are considering to serve in the roles of executor, trustee and guardian, and can give you ideas for how to resolve differences of opinion between your spouse and you on these matters.  The off-the-shelf Wills often do not contain legal provisions that are required in your home state, which can cause delay and expense in admitting your Will to probate.  Children and other relatives may have to hire accountants and lawyers to ensure that their rights are represented.

Typically an estate plan will include the creation of these basic documents:

  1. A Will and a Revocable Living Trust (if appropriate), that includes the naming of a guardian;
  2. A Durable Power of Attorney that names someone to make financial decisions in your stead in the event that you are incapacitated.
  3. A Medical Directive that spells out your wishes about health care treatment in your final days;
  4. A Medical Power of Attorney, that names someone to make medical decisions for you if you are incapacitated.

Obstacle #3 I’ve been meaning to do my documents, I have the name of a lawyer, but when I try to think about who to pick as an executor/guardian etc.  I freeze up.

Jennifer Goode:  Selecting a guardian, executor, a trustee for your trust and personal representatives for your powers of attorney, and medical powers of attorney are some of the hardest decisions you have to make when putting together your estate plan.

Jennifer says that she counsels client to “think about who will take care of you and who will take care of your children.”  Sarah Johnson advises clients to envision what would happen right now – if your spouse and you did not make it home from work today, who do you see stepping in and caring for your children?  That is probably the person that should be named as guardian.  Another strong recommendation is to ask the kids who they would choose as their guardian, if they are elementary school aged or older.  Children can often see the right answer with a clarity that adults lack, because our heads are too crowded with family history and prejudices.

There are no hard and fast rules, it may make sense for one person to be the kids’ guardian and handle the money, or you may want to split those duties up. You may feel your parents may not be physically up to the task of guardianship, in this case using life insurance proceeds to allow the parents or other guardian to hire a nanny is a creative idea.  You may want someone nearby to have your medical power of attorney so that they are available to meet with family and doctors in person.

Whether you are a worrier or an ostrich, you have a need for estate planning documents!  Break the task up into simple pieces and figure out the next step.  Do you need to identify a lawyer, do you need to put together a list of people you want to execute and handle your affairs…ask for help, and remember sometimes done is better than perfect!

Next up:

  • Why do I need a revocable living trust?
  • Laura Stone on Estate planning during and after divorce.

Sending positive thoughts!

Carolyn and Beth

Ithaka Financial Planning Blog posting February 2018

Posted in Financial Planning, Insurance, Tips on by .

Ithaka Financial Planning Blog posting February 2018

How does Umbrella Insurance work to mitigate your risk?

Beth and I recently met with Mitch Freedman of Freedman Risk Management Partners, LLC.  Mitch puts together comprehensive property and casualty insurance solutions for high net worth clients.  His focus is making sure insurance policies work to protect clients’ true financial risk in the most cost effective manner.  He is excellent at explaining insurance concepts and risk, so we thought we would share his thoughts on Umbrella Insurance.

Beth and Carolyn:  What is Umbrella Insurance?

Mitch:  Personal umbrella insurance is an extra layer of liability coverage that sits over your homeowners, auto, boat and other personal (non-business) asset coverage.  A serious auto accident or injury to a visitor at your home can turn into a large claim against you.  Umbrella liability insurance steps in to provide this added protection.

Beth and Carolyn:  Who needs Umbrella Insurance?

Mitch: Just about anyone who owns a home or car should consider umbrella insurance.  In our litigious society, anyone can be sued for injury or damage to someone else, especially when it causes severe injury or worse.  Those with significant assets should be even more diligent about protecting themselves through umbrella liability coverage.  They are the proverbial “target” with deep pockets.

Beth and Carolyn:  How much coverage should you have?

Mitch:  There is no perfect answer to how much coverage one should maintain.  Net worth is often a starting point but other factors such as a client’s tolerance for risk, risk profile (number of homes, cars, boats, youthful drivers, etc.) and premium.  Ultimately it’s a judgment call made by the individual.

Beth and Carolyn:  What are a few key things to keep in mind when buying Umbrella Insurance?


  1. Umbrella coverage tends to be very affordable.  For a couple hundred dollars per million dollars of coverage, you can typically buy coverage up to $10MM.  This small cost helps you sleep at night knowing you’re protected in the event of a serious claim.
  2. Make certain all of your underlying assets are listed on your umbrella policy.If a home, vehicle, or boat is not listed, and an accident occurs the policy will not provide the coverage it’s meant for.
  3. Understand the growing frequency of personal injury suits stemming libel, slander, or defamation. This is a growing area of personal injury claims in our world of social media.  Take particular care if you have kids online.
  4. Understand that the insurance company has a duty to defend you, even if the suit has little merit.Defense costs are covered by the insurer, and are outside the limits of the policy, so they don’t eat into what is available to pay a potential settlement.

Beth and Carolyn:  Thanks Mitch for shedding some light on this oft misunderstood area of insurance!


Carolyn and Beth

Questions for Mitch?

Contact him at: