The Glory of Paperwork [Estate Planning]

The NYT reports on a new program JP Morgan is trying to patent for making sure its clients estate plans don't get screwed up. The plan appears to boil down to being careful with the paperwork and decorating it with virtual color-coded organizational tabs. I am going out on a limb and assuming most of the people reading this blog don't have the millions of dollars most of JP Morgan's clients possess, but you, too, can approximate the company's stellar customer service by taking the following steps:

1) Name the right people. Make sure your retirement accounts and life insurance policies name the right person as a beneficiary. The identity of "the right person" can change over time as your relationships change--I just changed the beneficiaries in my policies from my brother to Shiner.

2) Buy life insurance. If your estate is large enough to be taxed at your death, and is largely in illiquid assets like stocks or real estate, buy life insurance sufficient to cover the taxes. The policy beneficiary can use the proceeds to cover the taxes without being forced to liquidate assets in a down market.

3) Don't name someone as executor of your will who would be over her or his head, given the complexity of your estate.

I don't mean to snark, since I'm sure most people don't amass great fortunes without having their money in a lot of different places so this stuff no doubt gets very complicated, but I wasn't especially impressed with the description of the program JP Morgan has developed. Mostly I was wondering why this isn't stuff that was caught before. I am not an estate lawyer, but I have worked on complex matters with a lot of moving parts where analogous sorts of screwups aren't the primarily the client's, they're a sloppy advisor's.