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.

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 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.

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.

(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.

I know this title seems strange.

Almost everyone thinks they need an estate plan to insure the comfortable transition of their money.  With few exceptions, I feel that my clients are burdened with the prospect of making decisions about how to pass along their accumulated wealth.  It drives home the point of why the fear based selling I studiously avoid is so compelling.

You’ve worked a lifetime building up not only a fortress of wealth, but also building a legacy of values.  If you believe in the adage “give a man a fish you feed him for 1 day, but teach a man to fish and you’ve fed him for a lifetime,” I have an idea for you.

I read an article not too long ago about family harmony which also described the challenges of leaving a family business when only some of the beneficiaries are interested in the business and the others are not.  The need for life insurance to be sure that the child who runs the business can keep the business was one of the lessons of the article, but there are others.

The key is not to consider the amount of your accumulated wealth in terms of dollars, but in terms of value and legacy.  It won’t be much of a legacy if 10 years after your death, the children are still fighting over how to divide your most prized asset when the real fight might be about who loved whom more.

Once the discussion turns to your values and legacy, it is easier to understand the true importance of estate planning.

One of my favorite clients repeatedly drives home the point that he is not interested in controlling the lives of his family from the grave.  While he is completely at peace with his decisions, I struggle with the concept of letting grandchildren control their substantial inheritances at age 18.

Because he started with nothing and became a true giant, first in his industry and then in philanthropy, he believes everyone can.  Actually, I shouldn’t say he started with nothing.  I should say he started with no money.  He obviously had an abundance of something that drove him to success.  He built an industry leading company, he married a woman to whom he was mutually devoted for many years and had 3 children, each of whom he is proud of in their own unique way.  He pursued his passions at what for me was a dizzying pace and he is conflicted that more attention is given to the money he contributes than the non-monetary contributions to the fields of those he chooses to honor.

He doesn’t understand why I don’t share his abiding confidence in his grandchildren and he dismisses my dire predictions that most wealth is dissipated in less than 3 generations.  Then I realized that I’m the one who doesn’t understand.

You see, my prescription for the malady of inherited wealth being wasted is to lock it up in trust and dribble it out over the generations.  His plan is to be a venture capitalist – give the money to his descendants and let them learn how to use it.  Do good or dissipate it – either way, he believes the value of the lesson is more valuable than the security the money can provide and for him, estate planning really isn’t about the money.

We philosophically wrestle with the ease with which he is willing to let his children and grandchildren make their own mistakes.  With a Zen-like countenance, he repeats his mantra that “money is only a tool.”

I’m still learning, but I think he means that the lessons learned from making mistakes are more valuable than the money itself.  Judging from the mistakes he has shared with me, intellectually I know he is right; although deep in my legally trained gut it is still difficult to accept.

For my client and friend, estate planning is not about money.  He is blessed with an uncommon grasp of the meaning of a life well spent.  I hope I can help all my clients pass on their own unique ideas and values to their loved ones along with any financial inheritance.  But even more, I hope I can hold onto this valuable lesson. Because the truth is, I learn more from some of my clients than they learn from me.

The Will is invalid because the testator was incompetent. Competency is a complicated issue.  My friend Jay Polk has written a treatise that is more than 100 pages long describing the different tests for competency in different probate settings.  For a will to be valid, the maker of the Will called the “testator” must meet 3 tests:

1. The ability to know the nature and extent of his property;
2. The ability to know his relation to the persons who are the natural objects of his bounty and whose interests are affected by the terms of the instrument; and
3. The ability to understand the nature of the testamentary act.

This is fertile ground for disputes and must be determined on a case by case basis which is what makes such contests expensive.  Often a forensic geriatric psychologist testifies after reviewing the medical records, and treating physicians may be called to testify with varying degrees of success depending on the nature of their specialty and the degree of contact.  Lay witnesses and the nature of the Will itself may be important elements of proving a testator’s competence.  In the end it is a facts-and-circumstances decision for which very little assurance can be given at the beginning of the case; even in some of the more outrageous cases.

Undue influence was exerted on the testator. The second most popular reason for litigation is an allegation that someone exerted undue influence on the testator so that the Will does not represent the testator’s true intentions.  Any time property is not left strictly to bloodline descendants in equal shares, this issue may arise.  Expensive battles ensue over whom Mom loved best or who took care of Mom.  Just about any fact pattern can support a good faith belief of undue influence, but changes to an estate plan on a death bed or after entry into a care facility are particularly fertile fields for such claims.

The original Will cannot be found. This is not often asserted in Arizona because a copy of the Will can be admitted to probate if certain conditions proving its authenticity exist.  But it can lead to a full contested matter as to whether those conditions exist.

The Personal Representative is not fairly liquidating or distributing the assets of the testator. An increasingly common concern is that the person selected to administer and distribute the estate does not do so either in a timely or equitable manner.  Unlike the issues described above, this is an issue that arises only after the probate has been opened and the administration has not proceeded the way a distributee expected or desired.  Although efforts to remove the Personal Representative are common, those actions seldom end well for anybody and it is more common to get a court order compelling the Personal Representative to complete the work.

All of these issues could be avoided or minimized if the testator began early enough to make and update a plan, and kept all the distributees informed along the way.  Because disaffected relations are so common, the best prevention is to have a clear Will or trust that leaves little room for dispute, and name a Personal Representative whose loyalty and understanding of the complex family relationships is unquestioned.

Even in the best of circumstances, probate contests are inevitable and the best results are often obtained when the parties are reasonable, think about the result before engaging, and pursue a course that is likely in the end to be the most palatable to all litigants.  Otherwise, a full blown Will contest will be expensive and protracted.

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.