February 19th is the day we celebrate several US presidents who made noteworthy contributions to our country. As with any discussion that involves politics, a discussion about US presidents risks generating a variety of opinions about which reasonable minds can disagree. However, politics is not the focus of this blog post. Instead, we aim to examine a few of the critical lessons we can learn from the estate planning of some of our country’s most famous Presidents.
Washington was arguably the most universally beloved and revered US president. Volumes have been written about this man and what he accomplished during his life. One significant achievement that few people know about is the care Washington took to ensure that his final affairs were in order and that those who relied on him were cared for to the best of his ability. Washington’s last will and testament, widely available online in its entirety, shows that he thought carefully about his final affairs and those who depended upon him; he also remembered many individuals by making very thoughtful decisions and gifts of items of personal property or specific bequests.[1]
It is worth mentioning that Washington had a somewhat nontraditional family situation and had to carefully consider how his estate should be distributed among his loved ones. At age twenty-six, Washington married a widow, Martha Custis, who had two children from her previous marriage, whom they raised together. After his stepson, John Custis, died during the war from an infection, Martha and George Washington raised John’s two youngest children as their own.[2] As a result of his blended family, Washington carefully crafted the language of his will to provide very specific bequests to each of his surviving family members to ensure that they were well cared for long after he was gone.
Washington provides an excellent example of the level of thought and care with which he crafted his estate - a presidential estate planning lesson for us all to follow. Even if we do not have the wealth that Washington died with, we can still be deliberate and thoughtful regarding how much and to whom we leave our wealth and meaningful items of personal property. By spending sufficient time and effort to think about and memorialize how we want to leave our possessions to our loved ones, we can leave a real legacy that has the potential to benefit generations.
While equally as famous as George Washington, Thomas Jefferson’s financial situation was far less favorable than Washington’s upon his death. Despite being a brilliant intellectual and the principal author of the Declaration of Independence, Jefferson struggled to manage his financial affairs. In addition, he was saddled with both debts inherited from his family and that he had assumed by cosigning on a loan for a friend who died prematurely. When Jefferson passed away, he still had significant debts that his family had to repay. Because Jefferson had valuable real property but very little liquid cash to pay his debts, his executor ultimately had to sell the family land at depressed market prices to raise enough cash to pay his debts.[3] The unfortunate result of these circumstances was that very little of Jefferson’s property could be passed down within the family.
Many families today face similar problems with illiquid or insolvent estates. This issue often arises when a business or farm owner has significant wealth tied up in their business or land but little cash in reserve to settle debts or pay transfer taxes at death. This can cause the families left behind to feel intense pressure to sell the business or the land at significantly less than they might otherwise be able to sell it for under better conditions to raise the cash necessary to pay the debts or taxes that will shortly come due.
Life insurance is an important presidential estate planning lesson; a tool often used to provide sufficient cash to pay a deceased individual’s debts or transfer taxes. With the proper type and amount of life insurance and using specific estate planning tools such as irrevocable life insurance trusts, an individual can prevent a “land rich, cash poor” situation like that experienced by Thomas Jefferson’s family.
Another well-known and beloved US president—a lawyer, no less—very surprisingly died without a will or any other type of estate planning in place. Like so many of us, Lincoln possibly believed that he had many more years to address this critical task. His tragic murder at the hands of a political malcontent plunged Lincoln’s family into a confusing and utterly unfamiliar situation as they attempted to settle his affairs with no knowledge of where to begin. His oldest son, Robert, contacted US Supreme Court Justice David Davis to take charge of Lincoln’s affairs.[4] Justice Davis generously stepped away from his duties on the court to assist the Lincoln family with the local court process for settling Lincoln’s estate. His estate was divided between his wife and his living sons, most likely according to the default laws of the jurisdiction. However, it remains unclear whether this is how Lincoln would have wanted to see his property divided.
A key presidential estate planning lesson is that no one knows when they will pass away. Even someone as wise and well-versed in the law as Abraham Lincoln was caught unprepared for his untimely demise, sadly leaving others to guess his wishes concerning his property. The family undoubtedly experienced significant distress and frustration due to not having a clear understanding or plan for handling Lincoln’s final affairs. Had Lincoln put some essential planning, such as a will or a trust, in place before his death, perhaps he could have helped ease his family through a very challenging time when he was no longer available.
Much more could be discussed and learned from the experiences of these and other US presidents as it relates to estate planning. We hope these lessons will help you think about your estate planning and what you want to do differently. Book a call if this post has prompted you to consider any changes you need to make in your planning. We would be more than happy to visit with you and discuss your thoughts. Until then, Happy President’s Day!
[1] George Washington’s Last Will and Testament, July 9, 1799, George Washington’s Mount Vernon, https://www.mountvernon.org/education/primary-sources-2/article/george-washingtons-last-will-and-testament-july-9-1799/ (last visited January 24, 2022).
[2] George Washington, Wikipedia, https://en.wikipedia.org/wiki/George_Washington#Marriage,_civilian,_and_political_life_(1755%E2%80%931775) (last visited February 19, 2024).
[3] Katie Ross, Presidential Debt: Which President Racked Up $100,000 in Debt? (August 24, 2021), American Consumer Credit Counseling, Inc., https://www.consumercredit.com/blog/presidential-debt-thomas-jefferson/.
[4] Danielle and Andy Mayoras, Are You Better Prepared Than Lincoln Was? (December 4, 2012), Forbes, https://www.forbes.com/sites/trialandheirs/2012/12/04/are-you-better-prepared-than-abraham-lincoln-was/?sh=44bb9da21cca.
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