Utilizing Positive Psychology in Your Estate Plan

by ACTEC Fellows Raymond C. Odom and Stacy E. Singer

ACTEC Fellows  Raymond C. Odom and Stacy E. Singer discuss the role of positive psychology in estate planning. Learn about the importance of effective estate planning communication with family and beneficiaries and how to measure happiness and success.

transcript

Hi. I am Stacy Singer, an ACTEC Fellow from Chicago, Illinois.                                                                           

Hi. I’m Ray Odom, also an ACTEC Fellow from Chicago, Illinois.

And we are here to talk about estate planning and positive psychology. So Ray, let us start with the basics. What role can positive psychology play in estate planning?

Well Stacey, when we talk about positive psychology, we’re not just talking about having a positive mental attitude. I mean, the idea is we want to give each individual person a goal. A goal that is related to estate planning that will make them not look at this as something to avoid – a catastrophe related to death disability or even high taxes. So, the idea of positive psychology is to help estate planning do what psychology had to do. Psychology used to only relate to disease and to mental illness, and as a result of that there were only a very few people who are actually benefiting from the advice that psychologists gave. Well, in like manner, some folks will believe that estate planning is just for people who are thinking about disability or death. And we want to have it be a process that everyone can see as having some positive opportunity and benefit to themselves.

So, are you saying that you think positive psychology makes it more likely that people will complete their estate plans – will move forward with it?

You know, that’s a good way to put it Stacy. Will it make them do a will or a trust? Well, it will but kind of in a secondary sort of way. I think that when you have a framework for estate planning that really gets to what people want the most – and what I understand that to be is happiness – what people will say when you ask them is: I want this transfer of money or wealth to make my spouse, to make my children, to make my friends happy. And, that should be our goal. The question is, how do you talk about happiness when you’re talking about the transfer of wealth? And I think the way to talk about it is all captured by the word beneficiary. The word beneficiary does not have anything to do with death, disability, disease or disaster. It simply means that there is a benefit that someone is receiving from someone else. And I think when we use that word benefit as a proxy for happiness, it allows us to have a process that will encourage people to try and do estate planning.  

So, do you think that parents or grandparents or even donors can use this idea of happiness to be more successful at their estate planning?

Yeah. You know, you’re right that – how do you measure success in estate planning? I mean, you know, you say to someone, “Well, you know, I got a great estate plan.” Well, how do you know? Technically, you would only know if you were dead and that can’t be the goal. And so, the reality is by having happiness be the goal, now we have something that people can really kind of rally around. The problem is, how do you measure happiness? And the good news is, is Martin Seligman and the people who have worked with positive psychology came up with an acronym – P-E-R-M-A – PERMA. And that acronym allows us to really talk about what happiness is to most people. P, positive mental attitude. It’s kind of genetic but it’s smiling; it’s being engaged. And E is engaged. That means being in the flow, doing something that feels so you, so much a part of what you’re doing that you lose track of time. R stands for relationships. It’s important to realize that relationships are important in a wealth transfer. If the wealth transfer is hurting relationships, that’s not going to make people happy. M stands for meaning. People need to be in touch with what’s bigger than themselves, transcendent meaning, and that you need that to be happy. And then A, of course, is the one that most all of us are familiar with, achievement. And we all know that achievement makes us happy, and accomplishment. So those five factors together, Stacy, are the way we can talk about and measure happiness.

Right. I think that’s such an interesting way to think about estate planning and how all of us can really think through that. So, thank you so much.