The Christmas Clause

Even Santa had a contingency plan. We know because The Santa Clause showed us the well-planned steps Santa took to prepare for unexpected tragedy. In the 1994 film starring Tim Allen, Santa’s sleigh landed on the roof of Scott Calvin’s house. Scott’s son, Charlie, heard the commotion and woke his father, who ran outside to see what was the matter. Scott startled Santa, who fell from the roof and apparently died.

In the pocket of Santa’s suit, Scott discovered a card that read, “If something should happen to me, put on my suit; the reindeer will know what to do.” When Scott complied with the instruction on the card, he was magically transported around town to finish Santa’s deliveries.  When the night’s work was finished, the sleigh returned to the North Pole—with Scott and Charlie in tow. Scott was met by the head elf, who pointed out the fine print (legally speaking, the Santa clause) which required Scott to permanently take over as Santa since he had put on the suit.

You might have assumed that the seemingly-immortal Santa, endowed with magical powers, would not have needed to plan for the potential of an untimely demise. Clearly that’s not the way he thought about things, and it’s a good thing, too. If Santa needed a plan, how much truer is that of you and me? We all face three probable events for which we must have a plan.

The first contingency for which you must have a plan is the possibility that you won’t always be able to manage your own business the way you used to. Sometimes it’s just age that catches up with you gradually. Sometimes it’s a more sudden injury or illness. But no matter the cause, if you need help managing financial or healthcare matters, you must have financial and healthcare powers of attorney. The alternative is guardianship court, where the judge makes a determination of incapacity. Nobody wants to go to court if they don’t have to, and nobody wants to face a legal determination of incapacity. Good power of attorney documents can usually circumvent all of that.

The second contingency for which you must plan is the possibility that you may need long-term care as you get older. Statistics tell us that nearly three-quarters of those who reach the age of 65 need some form of long-term care during their lifetimes. Whether that involves nursing home care, assisted living, or caregivers coming into the home, facing that scenario without a plan can be financially devastating.

Your family’s financial security hinges on your facing this contingency armed with the right knowledge and information, not rumors and half-truths. Do your homework in advance or, if the need is already here, don’t try to face it alone. At The Elrod Firm, we have helped many families plan in advance for the future need for long-term care—but keep in mind, you can’t wait until the need arrives if advance planning is your goal. But in the past ten years, we’ve also helped over 2,000 families make the transition to long-term care even when there wasn’t time to plan in advance. Never assume it’s too late to do something to improve what could otherwise be a very difficult situation.

The third contingency for which you must plan is not just a possibility; it’s a certainty. You must, from a legal and financial perspective, plan for your death. Santa’s plan—instructing your survivors to put on your suit and, according to the fine print, take over your life—isn’t going to cut it in your case. Without proper planning, probate court will be in your future.

Probate is very expensive, frustratingly time consuming, and uncomfortably public. The steps needed to avoid probate court don’t have to be complicated, but you must do something. Sometimes the best steps simply involve the wise use of death beneficiary designations. Sometimes the proper path involves adjustment to real estate deeds. But in many instances, we can use a trust (simply a will replacement) to avoid probate court while also protecting future generations from their own financial mismanagement, or from outside attacks on their inheritance.

Santa didn’t just hope that, when the time came, he’d have an opportunity to make a dramatic death bed request that someone take over his job. He put detailed plans in place long before they were needed. You should do the same.