Who Do You Trust?
July 8, 2010
My inspiration for today’s post comes from this recent article in the New York Times about debt relief firms, and a few questions I was asked by a prospective client.
As a former consumer debtor lawyer who represented many good families through bankruptcy proceedings in the 1980s and 1990s, I have an intense dislike for the predators preying on the most vulnerable members of our economy – those who have lost their jobs and their hope for the future, and who will try anything to avoid further soiling their already shattered self image. The article describes the feeding frenzy of entrepreneurs taking advantage of this class of consumers desperate for a solution out of their current travails. It brings to mind the late night television infomercials promising get rich quick schemes where the only ones getting rich are the ones selling the schemes.
What does all this have to do with estate planning?
A competent estate planner likes inquisitive clients, and especially likes clients who question credentials, experience, and pricing. It helps the lawyer “sharpen the saw,” identify what is important to the client, and to remain relevant in an ever changing world.
Your estate planner should have good answers to all your questions including how much will it cost, how long will it take, why he or she should hire you, and what the client should do if you are not around when they need you. If you are going to share personal and financial details with your lawyer you need to have confidence and trust in that person, and a good estate planner knows this.
A skeptical client should want to know about the lawyer sitting across the table from him or her before divulging personal information. In today’s electronic age, a prospective client can a have a wealth of information before the meeting even begins: the lawyer’s web site and other public information such as Martindale Hubbell listing and rating, State Bar information, reported cases, and other commercial listings. All of these let the prospective client garner a lot of information, but there is no substitute for asking questions and observing the lawyer’s verbal and non-verbal communication skills. You must like and trust the lawyer in whom you will repose trust – trust in the lawyer’s skill, knowledge, experience, talent, honesty, and demeanor. Hiring an estate planner is an important personal decision.
I recently had a conversation with a financial advisor. The purpose of the meeting in her words was for her to find out about my practice. Near the end of the conversation I asked her to tell me some of her most common frustrations with the lawyers she worked with and how I could improve on their performance if we were to work together. She was taken aback by my candor and thought talking about her relationships with other lawyers was improper, but I think bluntness is essential for good communication. Unless I found out why she was looking for more lawyers to work with, I might repeat the same mistakes. I ask all my clients who come to me with documents drawn by other local lawyers the same question – I want to find out up front if I can do better or if the best advice is to go back or keep looking.
A good estate plan is a living plan. It is not documents. A good estate plan is one that sparks a thoughtful discussion of ideas centered on the client’s values, assets, family, desires, and intentions. An estate plan is a priceless investment and you deserve an estate planner that has spent the time to understand the importance of that process and can communicate ideas that address your innermost concerns in a manner that comforts you.
What does all this have to do with the debt relief firms that cost a lot of money but end up leaving their customers worse off than before they started? Simply that it brought home to me that estate planners don’t have customers, they have clients, and an attorney-client relationship must be built on trust.
If you want an estate planner who welcomes your questions and takes into consideration your family and your values as well as your assets, call our firm. As an additional incentive—mention this post to Lisa, my experienced client coordinator, and I will waive the customary $500.00 initial meeting fee.
Does Your Arizona Estate Planner Know Your Concerns and Your Family?
May 6, 2010
Is your estate planner a trusted advisor or a guerilla problem solver? Does he see you as a person or merely a bank account?
All too often lawyers or others billing themselves as “estate planners” perceive that you want the lowest cost, lowest maintenance product available so you can feel comforted that you have an estate plan.
This attitude has developed over time because many people believe an estate plan is a simple document to prevent the government from taking money that rightfully belongs to their children, when actually—if done correctly—it can be a comprehensive tool for passing on values and leaving a legacy for future generations.
I believe this is what estate planning has always been, but recently the advent of word processing and the internet has made it too easy for non-lawyers to peddle slick material by the ream, instead of providing you with personal attention and actual content and value. The internet is great for disseminating information on a wide variety of topics, but it is also the domain of predators who will sell you a boiler plate documents without any input from you other than your names. These documents may not even adhere to Arizona laws, and they come with voluminous instructions on what to do to make your plan effective.
If you have specialized legal training that qualifies you to understand what you are buying, how to make it work, and how to fix it if it doesn’t work, then the “estate plan in a box” may be for you; but if you have worked a lifetime gaining knowledge and experience in a different chosen field then you can appreciate the importance of using professionals to help you through what could be, if not the most important, certainly the longest lasting decision you will ever make.
Thus my leading question: Does your estate planner really know you?
In my practice I begin with a list of 20 important concerns and ask you to prioritize them so that your estate plan reflects your personal intentions.
I continue with 18 specific questions about your family to help me become familiar with your unique situation.
And if the situation calls for it, I follow up with a detailed fact finder that allows you to describe your values and explain how you developed the attitudes and values you have and how to pass these along to your descendants.
I use the information I have gathered to weave a rich tapestry of an estate plan, with a trust that will be a tax efficient and purposeful. My staff will work with you to re-title assets and confirm that all your assets are integrated into your plan so that the administration of your estate proceeds in an orderly and compassionate fashion.
I have more than 30 years experience as a lawyer and am well versed on estate tax planning, treatment of IRAs and other qualified retirement plans, and I study emerging strategies that may or may not use life insurance depending on your needs. I can help sharpen your focus on how best to employ your resources to accomplish your hopes, dreams, and aspirations.
If you believe you are more than the money you have, we should meet.
Contact me today (or leave a comment with your e-mail address) and I will send you, without any further obligation, my list of 20 concerns, my 18 family questions, and my “You’re More Than Money” questionnaire.
It’s Going to Cost Me What?? (The Automobile Analogy to Updating Your Trust)
March 24, 2010
It happened again. After telling the audience at a recent seminar that trusts really are living documents that need to be updated periodically, I was approached by several attendees afterward asking if I really meant their trust needed to be updated. After all, they only want to make minor changes; they don’t need anything big; their trust was created by a very good attorney.
That’s when I told them that any trust needs to be reviewed regularly, no matter how good the attorney or the trust. People change, lives change, and laws change—and any of these changes could affect your trust. In fact, I recommend that my own clients review their trusts annually and update their trusts every 2 to 3 years, if for no other reason than because I am a better attorney today than I was yesterday and can do more to protect them and their families.
People are often surprised when I tell them that the cost of updating their trust can be as much as they paid for their entire trust several years ago. They don’t understand why an “update” is so involved and expensive. This reaction led me to an epiphany.
These folks understand “update” differently. When a client hears “update,” they think minor modifications: changes to the people named, the trustees, or distributions. These “modifications” are like getting the oil changed and the tires rotated on your car. They are items that need regular maintenance.
An “update”, however, is much more comprehensive; it includes changes that take into consideration:
- Tax law changes,
- State law and asset protection changes,
- Changes affecting how the trustees manage and distribute your money,
- Incorporation of new ideas,
- Plugging holes in old legal thinking that plagued older documents, and
- The most current thinking of over 1,000 lawyers
An “update” is trading in your worn out used car for a newer model that performs better. The standard provisions have been re-engineered to perform better. “Updating” your trust in my office means you are getting the best protection for your family, and your hopes, dreams, and aspirations.
As a trust based estate planner I aspire to show you the benefits of making modifications when necessary, and updating when the benefits of using modern language insure the result you desire and deserve.
If you are happy with your old car and just need an oil change or new tires, don’t buy a new car; but if a new car appeals to you, it will be a good value. Is the cost too much? Absolutely not, but sticker shock is a powerful emotion.
Can I “sell” a Chevrolet for the same price as a Cadillac? No, and I don’t want to; a Chevrolet might be right for your family and your budget – it will provide a reliable result if you have no special circumstances, hopes, or aspirations. However, I don’t often advocate in favor of a Chevrolet because experience teaches me that in an alarming number of cases the Chevy will fail when you need it most—after you die. No one wants an out of warranty repair bill.
My personal satisfaction and passion comes from making sure you understand the choice you are making. As long as you see both the Chevrolet and the Cadillac for what they are and choose the one that provides you the best value, we will both be happy.
In my next post I’ll give some concrete examples describing why my constantly improving Cadillac trust is a better value than your current vintage Chevrolet trust.
Online Accounts: Until Death Do Us Part
March 17, 2010
Does your estate plan include a digital Will?
Last night while I was having dinner with a friend who also works in the legal world, talk turned to the digital age, and one of our dinner partners remarked about how interesting it was that our friend had recently moved and had acquired modern technology like digital cable TV. The punch line was that when asked if he was online, he replied he had something better, a secretary who was online.
Not many people I meet in my practice have personal secretaries any more. Almost all of them are “online.” Whether you use the internet for email, online banking, bill paying, photo or data storage, medical information, or social networking, it is likely that you have a myriad of usernames and passwords that ought to be regularly changed.
What happens to those online accounts when you die?
Andrea Coombes recently wrote an interesting article Don’t Take Your Passwords to the Grave that describes some of the common risks associated with estate plans that do not adequately address internet accounts.
A somewhat more well known problem was documented in 2005 in A Corporal’s Death on Law.com which described the problems the parents of a deceased soldier had accessing their son’s email account to retrieve his son’s contacts and preserve a record of his correspondence.
To add to the mix, social networking sites such as Twitter, Facebook, MySpace, LinkedIn, etc, sometimes have their own policies regarding what happens to a user account when the owner passes away.
You can protect against the loss of the electronic paper trail as a result of your death by leaving behind a list of accounts, usernames and passwords. You can download my suggested form for this purpose at www.bregmanandburt.com. But because of the confusing privacy rules, this may not be enough. Your trust, Will, and powers of attorney should all include provisions addressing who owns or can access your online accounts after your death. You also have the option of creating an “online will” to deal with your online assets such as accounts and passwords.
If you use the internet and your estate plan does not contain these important provisions, seek the help of a competent estate planner who understands the digital world. I welcome your call to review your estate plan or discuss these issues with you.
Leaving A Legacy: Improving the World With Social Capital
March 10, 2010
Social capital is the money or time you contribute to worthy causes that improve society. A favorite saying around charitable causes is the phrase “give or get” which means members can either contribute an amount of money toward the goal or they can go out and raise that sum of money from people they know. The saying recognizes that the time expended raising money is often as important as contributing the money itself.
But the social capital I want to talk about in the context of estate planning emanates from my friend’s philosophy that “money is only a tool.”
Although it is often unexpected, when I initiate conversations with estate planning clients my goal is to begin each relationship by learning what each new client values.
Commonly, they are proud of the manner in which they have provided for their family and their intention to provide financial support after they die. However, they often worry that their descendants won’t use their inheritance wisely; and sometimes clients feel that their descendants don’t really need an inheritance anyway.
The concept of social capital solves many issues. It allows you to contribute money to causes you believe in and set up your descendants to be caretakers of the capital for the future. It benefits the descendant that doesn’t need your money by speaking from your heart to their own. It benefits the spendthrift by substituting personal responsibility for temptation.
There are 2 schools of thought about the use of social capital. Some clients are just not interested in the concept, believing they have supported their causes during their lifetime and it is their descendants’ turn to decide how to act. Others see the use of social capital as a key tool to building a legacy through strength of character. Depending on the client’s perspective there are different ways to use this tool.
One way is to purchase life insurance and name a favorite cause as the beneficiary. This allows small amounts of premium dollars to blossom into a large gift that can provide major support for a favorite cause. This works well in many situations, but it does not build responsibility in your descendants.
There are tax motivated strategies such as naming a charity as the beneficiary of a retirement account that has not yet been taxed. Leaving the descendants post-tax assets and gifting the as of yet untaxed retirement plan can yield a good income tax and estate tax result. Creating charitable remainder trusts as a technique to avoid capital gains on appreciated property is a good strategy when contemplating the sale of highly appreciated real estate or a business. These strategies share the defect of providing social capital, but not involving your descendants.
A good way to speak to your descendants is to set aside a portion of your wealth in a donor advised fund and name your descendants as the advisors to the fund. Your voice comes through because you leave your descendants the responsibility of making decisions about how, when, and to whom to give money. It encourages them to honor your legacy by becoming involved in the causes they support.
However you choose to create a philanthropic legacy, you will be speaking in a clear voice to your descendants about your values and making a difference the way you decide best suits your own perspective.
Leaving a Legacy: Your Own Voice in Your Estate Plan
March 4, 2010
(image courtesy of www.treasurechestproducts.com)
Back in December I blogged about estate planning not being about money and described the beginning of a journey to find the legacy you want to leave to your children, today I’m going to write about another part of that journey… finding your own voice.
Part of finding your legacy means looking for and putting your own voice into your documents. Recently I blogged about George Washington’s Will and the way he breathed life into his estate plan by describing the importance of his swords bequeathed to his nephews and the even more important freedoms for which they stood. Not all of us can be the father of our country, but all of us can bequeath the lessons of a lifetime and speak to our descendants through our estate plan.
Estate planning interviews that begin with how much money you have and to whom do you want to leave it are likely to end there as well. Interviews that beginning by listening to your own life’s story give you an opportunity to explore who you are, what you have done, and what is important to you.
When I was first starting out as an inexperienced estate planning attorney, I was often so in awe of my clients who were worth a lot of money that I couldn’t wait to try to impress them in return with the amount of knowledge I had and to use that knowledge to save them even more money. I was so awe struck, that I neglected to appreciate the value of who they were. If it was often a less than satisfying personal relationship for me, I slowly realized, it must have been mutually unsatisfactory for my clients as well.
I began to understand if I first learned who my clients were, I would soon appreciate what they valued, and it would become apparent how they had managed to accumulate the wealth and why they were now asking me to preserve it for their descendants.
Certainly passing along hard earned money is a priority for some clients, but poll after poll and personal experience say that what clients really want to deliver to the next generation is their own legacy. Passing on the money is easy; passing on your legacy is harder.
I have experimented with various tools for getting my clients in touch with their values for estate planning purposes. The best strategy is active listening. The hard part is that it is so easy, it doesn’t seem like I am working, I am learning. But as I learn from my clients, their voices ring in my head. As I draft their documents, who they are becomes embedded within the corners of the document creating a monument that will live at least as long as the money.
What do you value? Let me help you deliver those values to the next generation and maybe the generation after that.
What George Washington Taught Us About Estate Planning
February 17, 2010
President George Washington painted by G. Stuart, engraving by H.S. Sadd
At a recent symposium, the presenter described the almost magical way the father of our country turned his bequests of personal property into a legacy that lasted generations.
He described the portion of Washington’s Will that bequeathed his swords to his nephews. Instead of a simple listing of the items and the recipients, he wrote the following words:
“To each of my Nephews, William Augustine Washington, George Lewis, George Steptoe Washington, Bushrod Washington, & Samuel Washington, I give one of the Swords or Cutteaux of which I may die possessed; and they are to chuse in the order they are named. These swords are accompanied with an injunction not to unsheath them for the purpose of shedding blood, except it be for self defence, or in defence of their Country & its rights; and in the latter case, to keep them unsheathed, and prefer falling with them in their hands, to the relinquishment thereof.” [Emphasis Added]
With those simple words he created a lasting legacy far more important than the value of the property bequeathed. In a single sentence he defined his character and his hopes, dreams, and aspirations not only for his nephews, but for future generations yet unborn. Imagine the honored place those swords must have taken in the lives and homes of the recipients and the lessons of freedom taught future generations.
I recently sat with a long time client who was grieving over the loss of his friend of over 50 years as we discussed what to do with his friend’s personal property which consisted of a lifetime of collecting crystal and works of art. I explained his mundane choices as the executor of the estate of distributing the property to friends or relatives who treasured something from the decedent, keeping it for himself as a remembrance, or selling it. We began discussing the value and the potential liquidation value. Suddenly, the conversation turned very somber and my client slowly began telling me a story. “Mark,” he said quietly, “I don’t want any of that stuff, I have my own stuff.” He paused, lost in thought, and then continued. “He loved that stuff. I had no interest in it. But he studied the prices at retail stores and then shopped at second hand stores. He would find a piece he liked and he would carefully examine it.” My client slowly demonstrated a shopper holding up a piece with his hands and he slowly turned the imaginary piece over and around as he examined it. “He would often buy it for 20% of what it would have cost new.” Between the words and the hand gestures, by the time he finished telling the story and composed himself, I knew what he intended to do with the collection that only a few moments before he had described as “just stuff.”
Our lives make a difference. Many of us have an under developed appreciation for what we bring to the lives of those around us. Your Last Will and Testament can be written in your own voice so that the value of what you leave reflects the value of who you are. Contact me for more information about how to put your own voice into your estate plan and emulate George Washington in posterity.
The Perils of Probate, Part One
November 18, 2009
Probate litigation is a burgeoning and fertile practice area for lawyers. There are many reasons why probate cases spawn litigation, but most grow from inadequate or defective estate plans nurtured by emotional dissatisfaction or greed.
As an estate planner since 1979, I encourage my clients to create an estate plan that takes into consideration not only the nature and size of their estate, but the hopes, dreams, aspirations and the character of their heirs and others interested in their estate.
If all goes as intended, everyone is either satisfied or at least left without reasonable grounds to become embroiled in an expensive controversy. However, all too often, estate plans are not properly implemented–with costly and often destructive results.
Leo Tolstoy opens Anna Karenina (1961) with the now famous saying “All happy families are like one another, each unhappy family is unhappy in its own way.” That sums up probate and probate litigation. Well adjusted families come together after the death of a patriarch or a matriarch to console one another and then transition the wealth remaining after paying the bills in accordance with the decedent’s intentions expressed by a Last Will and Testament, a trust, or variety of other devices using beneficiary designations.
On the other hand, in contested probate matters, the litigants are often distantly related or not related and often don’t even know one another. They seldom share a functional emotional bond and they have no familial reason to reach a reasonable solution.
As a result, other feelings become paramount, usually greed, but sometimes hurt emotional feelings that remain unresolved interfere in rational thinking. The process frequently snowballs out of anxiety and lack of good information. Usually the emotions, greed or otherwise, escalate before the litigants seek legal counsel and the litigants become emotionally entrenched in their positions, however unreasonable. This phenomena was recently explored in an Augusta Chronicle article that described why a current estate plan was crucial to avoiding probate contests.
Lawyers are served up on the horns of a dilemma. Their new client is entitled to competent legal representation and such representation may cost more than the amount in controversy. Litigation is expensive with probate litigation fees for experienced counsel often between $300 and $400 an hour. Additional experts are usually required. If the competency of the decedent or the due execution of the Last Will and Testament is involved, there will be doctors and other experts involved, as well as fact witnesses to be deposed. Litigants need to be aware of the potential costs before proceeding; and rational solutions–however unfair–suggest themselves when a small amount of money or property is in question.
Mediation is often a good solution, and most efficient if conducted early in the litigation before legal fees and costs run amuck.
A litigant’s best friend is an experienced lawyer who understands the probate process and the probate law, who can reasonably forecast the likely results, and who works toward that result in as uncomplicated a manner as possible. In addition to the usual questions about how the lawyer charges, how long he has practiced law, and what qualifies him or her to represent you in this matter, good questions to ask before hiring a lawyer for a contested probate matter include:
- Describe your specific recent experience in probate matters.
- How much of your practice is devoted to probate litigation?
- What do you do the rest of the time?
- After hearing my side of the story, what else do you want to know before forming an opinion of likely outcomes?
- Based only on my story, what do you perceive to be the most likely outcome and what other outcomes are reasonably possible?
- What factors determine my total overall cost and what do you reasonably expect the cost to be if the case follows the path you anticipate?
- If more than 1 lawyer is to work on my case, how will those lawyers bill for their time?
- What additional facts would change your mind about the outcome or the cost?
- Do you carry malpractice insurance and if so in what limits?
- Have you ever been subject to professional discipline? And if so, explain.
In my next post, I will explain some of the common types of contested probate litigation and how to avoid them.
Who Doesn’t Need a Trust?
October 21, 2009
I am a trust based estate planning attorney. That means for a variety of reasons, I believe that most clients are best served if the centerpiece of their estate plan is a trust.
However, that said, a friend who recommends my services to his clients recently complained that after extolling the virtues of trusts and my services to his clients, he discovered that I had not recommended a trust based estate plan. He wondered aloud if I had wandered from the true path.
Because in 1995 Arizona was the first among, at last count, 12 states to create a beneficiary deed statute, you may pass your assets at your death without a Will or a Trust. Using a combination of a beneficiary deed for each parcel of real property, transfer or payable on death (TOD or POD) designations for investment or bank accounts, and naming competent adults in your beneficiary designations for retirement accounts, life insurance policies, and annuity contracts, you can avoid both probate and a trust administration. Using an affidavit for collection of personal property will allow motor vehicles to be transferred and other items such as jewelry and collectibles can be distributed among your heirs by agreement.
This plan can work well for you if the objects of your bounty are competent adults without spendthrift habits or creditor problems and, in the case of real estate transfers, if the several recipients will cooperate with each other. The problem is that in many families more structure is necessary to handle interfamily affairs and personalities and in some cases lifetime protective trusts will benefit your family more than the simplicity of the “no trust” or “no probate” plan described above.
The plan takes some prior thought and regular periodic review if you acquire new assets or the characteristics of your intended recipients change, but all other things being equal, these arrangements with adequate financial and health care powers of attorney may be all you need to have a viable estate plan. I encourage you to also have a Will that will be effective if necessary to address unforeseen circumstances or otherwise omitted assets, but in all likelihood, no probate proceeding will be required and the Will will not be used.
Of course if you don’t fit the typical profile or have additional concerns, then you will be better served by a good inter vivos trust as part of your plan and you’ll make my friend happy.