This past weekend, I was thrilled to see John A. Warnick featured in The New York Times for his accomplishments in creating the Purposeful Planning Institute. In the article, “Focusing on the Human Element of Estate Planning,” John A receives well-deserved recognition for taking the initiative (and risk) to focus estate planning on transmitting family values rather than merely asset preservation.
“What we stand for is making sure the planning has a deeper purpose and meaning to it than just being driven by taxes,” Mr. Warnick said. “The challenge is to get those core planning disciplines — lawyers, C.P.A.s, wealth managers — to start with ‘why’ instead of immediately marching into ‘how.’ ”
John A began thinking about how traditional estate planning was missing a key element – the impact on beneficiaries – after receiving an irate call from a 21-year-old complaining about a delayed distribution.
But this particular call got Mr. Warnick, then a lawyer at a large law firm in Denver, thinking about how estate planning was missing the human component. The emphasis was on transferring the most money to heirs free of estate tax and then insulating that money from creditors. “I said, ‘There has to be a better way to do planning so all this tax-efficient, elegant trust planning doesn’t hurt people,’ ” he said. “I saw well-intentioned, technically precise plans reap negative unintended consequences.”
In my experience working with families and trustees dealing with addicted and/or dysfunctional beneficiaries, far too many trust documents lack effective provisions to prevent the “negative unintended consequences” he is talking about. So, again, congratulations to John A helping parents write estate plans that help rather than hurt their heirs.