Category: Estate Planning

Truly Creating a Legacy – Story Based Planning

August 18, 2010 / Michael

In this final installment on story based planning, my colleague and mentor – Scott Farnsworth – delves into the reasoning behind why story leading questions are powerful . . . and the key to a story and values based plan. To me, these are the plans that truly create a legacy rather than just a set of documents. To have the proper context you will want to read the previous 4 posts here: 1, 2, 3, 4. I believe everyone needs this type of plan. If you find yourself longing for a legacy rather than a set of documents, give us a call to schedule your Peace of Mind Planning Session.

Nancy Kline, the author of Time to Think and More Time to Think, has taught me a number of significant truths. One is that “the human mind thinks best in the presence of a question.”

As I turned that idea over in my brain a hundred million times, I began to see that questions matter, and they matter deeply in every field of human thinking. The nature and quality of the questions we ask determine the nature and quality of the thinking we spark and of the answers we receive.

I learned in law school that certain types of questions lead to particular kinds of answers. For example, “open-ended questions” elicit a different kind of answers than “yes/no questions,” and these are different from “leading questions,” which guide a witness to testify a certain way. The type of questions we ask or the way we phrase or frame our questions influences the answers we receive.

This principle is readily seen in the field of education. As a Portuguese instructor, a college professor of business law, and now as a facilitator of professional training, I have observed that students receive, process, store, retrieve, and apply information differently according to the types of questions they are asked and, indeed, by the types of questions they anticipate they will be asked. The learning processes and the thinking processes for one type of question are different from the learning processes and the thinking processes for all other kinds of questions.

For example, a course in which students believe they will be graded with a true-false, multiple choice, matching, or short-answer exam will produce a different kind of thinking and learning than a course in which the anticipated exam is essay, open-ended, problem-solving, or issue-spotting. Similarly, an oral exam results in a very different educational experience than a written one.

The type and style of questions also determines the nature, quality, and quantity of information available to the teacher to assess the students’ comprehension of the subject matter and their ability to apply the material elsewhere. Some kinds of questions deliver rich and abundant information about the student and the learning process, while others yield scant and sketchy insights. If teachers want to understand how well their students are thinking and what they are learning, they should pay careful attention to the nature of the questions they ask.

“Successful” students — i.e. those who score well on exams — learn how to anticipate the nature of the questions they will be asked and apply the learning and testing strategies that work best for those kinds of questions. On the other hand, “successful” students — i.e., those who learn to think clearly about the material and then put it to use in the “real world” — think beyond exam questions and anticipate the issues the “real world” will present them.

What’s true in the field of education is also true in our work with clients: the type and style of questions we use matters deeply. Our questions determine which issues our clients think about, and then drive the way they think about, those issues.

If our questions are analytical and numbers-oriented, our clients will think analytically and will focus on the numbers. And if our questions are more intuitive and visionary, our clients will be more reflective and more thoughtful about the future they are creating for themselves and those affected by their planning.

The best planners are comfortable working in both sides of the brain, and are skilful in getting their clients to do the same.

In her magnificent book, I Will Not Die an Unlived Life,” Dawna Markova writes:

The brain has both analytic and intuitive ways of processing information. They are meant to work hand in hand, but usually end up in an arm wrestle. If we analyze only as we have been taught to do in most schools, snapping at the first answer that comes along, then judging it good or bad, right or wrong, the shy intuitive mind, not unlike a prairie dog, runs for cover. Analysis, when improperly done, causes paralysis. It creates a world “out there,” of which we are only spectators and in which we do not live. It is commonly called objectivity.

If, on the other hand, the analytic mind asks open questions of discernment — “I wonder how this would work. . . . What would it look like if this were really possible? . . .” the intuitive mind begins to explore many possibilities, weaving its way through the trees until it has a sense of the whole forest and its meaning in nature’s scheme of things. Pop!

This wandering and wondering are not useful when one is dealing with issues such as the computation of income taxes. But the exploration of purpose and passion requires us to uncover patterns and understand the relatedness between things, and then synthesize them into a new whole. This is the terrain of intuitive processing. Personal truth can not be found in either analytic thinking or intuitive thinking alone. It can only be uncovered in an open inquiry between them.

Because most of us work in a presumptively analytical world, it is not always easy to inspire ourselves or our clients to operate concurrently in the intuitive world. It sometimes feels awkward or invasive. And yet, if we fail to go there, we are stuck in the shallow waters of “the computation of income taxes” and similar tasks, ending often in “analysis paralysis.”

So what is the secret to moving comfortably and confidently into the deep waters of real thinking about the issues that should underpin and overlay great planning? From my three decades in the planning professions, my answer is to ask what I call “story-leading questions.”

Stories are our native language, and everyone, including our most analytical clients, has a story to tell. Stories are a right-brain, intuitive activity that naturally invites the “wandering and wondering” and the “exploration of purpose and passion” Markova writes about. In the hands of an artful advisor, story-leading questions and the stories they spark beckon clients (and also advisors) to “uncover patterns and understand the relatedness between things, and then synthesize them into a new whole.”

The result is a masterful, thoughtful blend of solid numbers and bottom-line analysis, together with deep, rich, and meaningful insight into the client’s purposes and passions. The hard realities of the tax code and the stock market are woven seamlessly with the heart and soul and vision of the human beings for whom we are planning. Literally, a new world, the future world our clients are seeking, is created.

The key to this beautiful and powerful approach to planning is the art of the story-leading question. It unlocks the door to what I believe is the best possible planning on the planet: story-based planning.

Scott Farnsworth, J.D., CFP is an attorney and Certified Planner with more than 30 year in the estate, business, and financial planning fields. He is the CEO of SunBridge, Inc. and the founder of the SunBridge Legacy Network. He is a nationally recognized author and expert on practical, holistic, family-friendly planning. Scott was recently named one of Financial Advisor Magazine’s ‘Innovators of the Year.

Michael Lichterman is an attorney specializing in estate planning and helping families and business owners create a lasting legacy by planning for their Whole Family Wealth™. He focuses on planning for doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned business succession, and the “sandwich generation” (caring for parents and children) – and does so from a Christian perspective. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

The “Story Leading Question” and True Values Planning

August 15, 2010 / Michael

If you haven’t had the opportunity to read the earlier posts in the series on story based planning written by my colleague and mentor, Scott Farnsworth, you can do so here, here and here (sounds funny to have all those here’s!). They give an important backdrop to this post on “story-leading questions.” I have found story leading questions to be one of the most transformative processes I’ve implemented when working with clients. It “opens a door,” as Scott says, to really learning more about who each client is and what’s important to them – true Whole Family Wealth™ Planning.

In “The Power of Story-based Planning, Part 3” I wrote that “the best way to genuinely understand our clients and their values is to ask them thoughtful and insightful story-leading questions in an appropriate setting and then settle back and listen to their answers with all the love and attention and encouragement we can muster. I have learned that who they are and what they deeply value are woven into the stories they tell and can be discovered by a caring advisor.”

So what are story-leading questions? Simply put, they are questions that invite the other person to answer with a narrative. They open the door to a story.

I have found that good story-leading questions exhibit a warm and welcoming interest in the life of another. Good story-leading questions are appropriate to the level of trust and intimacy between those conversing. They don’t put the other person on the spot, nor feel judgmental.

Good story-leading questions also allow the person answering a number of ways to answer the question, rather than leaving them only one possible option.

Story-leading questions are like wizard’s matches: they ignite a warm, crackling exchange of life-experiences and life-lessons. Sometimes, they even kindle bonfires of story sharing. A good story-leading question naturally and comfortably invites the other person to recall and share a little bit of their life with the person posing the question.

Most of us already have a wide array of story-leading questions that we use but most of us are not mindful of them or how powerful they can be, especially when we remember to ask them “in an appropriate setting and then settle back and listen to the answers with all the love and attention and encouragement we can muster,” to quote myself.

Here’s an experiment you can try. When you go home this evening and when the time is right, try out this simple story-leading question with someone you love: “So what was interesting or unusual about your day today?”

Or ask a young parent: “What has your child learned to do lately?”

Or ask a child: “What’s something you’ve discovered lately that makes you happy?”

Or ask an older person: “What’s happening with your grandchildren?”

Or ask a friend: “What’ve you been up to since the last time we talked?”

Then listen, really listen. Show with your countenance and your body language that you deeply want to hear the answer. Don’t rush, don’t compete, don’t minimize or infantilize in any way what they say. Just listen.

I promise if you do, you will discover — or rediscover — magic.

This same approach works in our professional lives. Story-leading questions and attentive, caring listening can transform the planning process.

Our clients safeguard a treasure trove of information about themselves, their lives, their loved ones, and their visions for the future behind a heavy locked door. Opening the door requires two sets of keys. One set is the questions and the other is the listening. Accessing this valuable cache of information can lead to the creation of elegant and appropriate planning for these clients.

Great story-leading questions and attentive, respectful listening are the keys.

Are You Getting REAL Values-Based Planning or an Impostor?

August 11, 2010 / Michael

This is the third in a series of posts on Story Based Planning written by my colleague and mentor, Scott Farnsworth. In this post Scott tackles TRUE values-based planning and what has become a substitute that “poses” as values-based planning . . . questionnaire based planning. Here is what Scott has to say:

In an earlier post I wrote that “values-based planning” is founded on the notion that each client has a personal set of values that should be ascertained early in the planning process and then used to fashion a financial plan or estate plan unique to that client. Most enlightened planners today would concur that financial and estate plans based on client values are far superior to the “one-size-fits-all” cookie-cutter plans that many of us grew up doing.

The question with regard to values-based planning is not whether we should create plans based on client values. The answer to that one is duh-obvious: Yes. The issue is not WHETHER we should do values-based planning, but rather HOW to do it so that it actually works.

In other words, how do we respectfully and accurately ascertain each client’s unique and deeply-held values upon which their planning will be based? What methodology will allow us – and our clients – to look into their hearts, to see there what truly matters, and to then discern how to create a plan with them based on what we have discovered?

Unfortunately, the widely-heralded “values-based planning revolution” has been in my view a case of one step forward, two steps back. This is largely because in nearly every instance what started out to be “values-based planning” quickly morphed into what I call “questionnaire-based planning.” Indeed, with a few notable exceptions, virtually every so-called “values-based” approach is designed to be implemented by means of a cleverly designed, carefully worded questionnaire.

I think that is a tragic turn of events, and here’s why:

A. Questionnaires are blunt instruments that deliver cut-and-dried, categorical answers. As a result, they seduce planners into seeing clients as cut and dried and categorical. But that’s not the way we humans are, especially when we drill down to a values level. We are not pegs to be pushed into differently shaped holes, or colored bobbles to be sorted into different boxes. We are each unique. We are full of nuances, contradictions, uncertainties, and places where the lines are blurred. We don’t fit into four or five neat categories, as most questionnaires require.

Some would argue that being able to offer clients a plan based on which one of several categories they fall into, as determined by their questionnaire responses, is substantially better than the old “one-size-fits-all” method of planning. While it may be an improvement, it is not true values-based planning. Offering clients a choice of cookie cutters is still cookie-cutter planning.

B. Questionnaires have built-in biases, which are based on the assumptions and prejudices of their creators. Regardless of whether these biases are accidental or intentional, a biased questionnaire skews the results away from the client’s true values. When you start with untrue assumptions, you always end up with incorrect conclusions.

I have seen long, beautiful, and well-worded questionnaires that were supposed to assess a client’s values and direct the planner to the type of plan the client needed. Oddly, it seemed that nearly everyone using that questionnaire was steered toward essentially the same plan, one that favored the aims and products promoted by the questionnaire designer. It seems to me that when everyone gets the same answer, maybe the questionnaire is asking the wrong questions.

C. Questionnaires can be “gamed” by clever clients. The process of answering questions in a questionnaire invites clients to consider not just their answers, but the impact of their answers on the planner and the planning process. “Will this answer raise or lower the fee?” “Will this answer make me seem more wealthy or less wealthy?” “Will this answer cast me in a negative light?” “Will I appear miserly, judgmental, prejudiced, immature, or short-sighted if I answer that way?” “Will I be exposing my weaknesses, and will that allow her to take advantage of me in some way?”

Human nature being what it is, the odds are high that clients’ responses will be less than candid and unguarded. Consequently, there is a high probability that questionnaire answers will be scrubbed, distorted, shaded, or flat-out wrong. This makes the results of a questionnaire unreliable as a basis for serious values-based planning.

D. Questionnaires lead to dull, inattentive planners. Questionnaire-based planning doesn’t require planners to listen deeply and attentively to clients, to ask insightful questions, or to employ judgment and wisdom to discern how to weave the client’s life-lessons into the plan. The “correct answers” or the client’s “categories” just “magically” pop out from the responses. Yeah, right.

True values discovery requires careful and attentive listening. Each client and the stories they tell are alive with insight and meaning. They are full of clues and pieces of answers. Real people living real lives are like that. The right answers don’t just pop out; they have to be teased out and then pieced together like a jigsaw puzzle. But when you make a commitment to discover for yourself – and for the client – a clear and complete understanding of what’s really in their heart, their deepest purposes for planning, you discover that the results are unquestionably worth the effort.

E. Questionnaires don’t lead to values-based planning. Questionnaire-based planning is neat, clean, analytical, and easy, but it is incapable of drilling all the way down to the values-bearing strata deep inside the client. No matter how cleverly worded, a questionnaire can never respectfully and accurately ascertain each client’s uniquely personal values. The results are too shallow and mechanical. The intention may be right but the methodology is wrong. Thus, whenever planning becomes questionnaire-based, it ceases to be truly values-based. I call it “faux values-based planning.”

Please understand that I believe there is an appropriate role for questionnaires in the financial planning and estate planning process, which is to help gather data. I have no problem using questionnaires as fact finders. They just don’t work to discover and discern significant client values.

So What?

“So what’s the harm,” you may ask, “in doing questionnaire-based planning? It’s definitely a lot better than the old way we used to do it.”

The most significant harm is that when financial planners and estate planners – even smart, sincere, and well-intentioned planners – think they are doing values-based planning but are only doing faux values-based planning, they stop seeking the real thing. They become enamored with zirconium and fail to find the acres of diamonds just over the next hill. They take the shortcut and never realize they just missed the best part of the journey. As a result, they rob themselves and their clients of the magnificent experience of true values-based planning.

Good is the enemy of great.

The moment earnest planners apply the label “values-based planning” to something that is not and once they start to believe they are doing “values-based planning,” even though it is really only the “faux” variety, they lose the sense of urgency to discover the real thing and are unable to see the need to do more. Once they get locked in, it is nearly impossible to unlock them. As a wise person once said in another context, “the problem is not what they don’t know. It’s what they do know that just ain’t so.”

Values on the cheap vs. paying the price

While questionnaire-based planning may appear neat, clean, analytical, and easy, it is really only values-based planning on the cheap. The real process of values discovery – like virtually every other authentically meaningful human endeavor such as nurturing a fulfilling marriage, raising independent children, growing a beautiful garden, or building a success business – can be disorderly, messy, intuitive, and sometimes challenging. It requires real work. It requires that we pay the price to come to know, really know, our clients. It cannot be achieved with clever techniques.

The Solution

To move into the beautiful new world of true values-based planning, the solution is not to try to come up with a more artful questionnaire. The solution is to recognize that their stories — the oldest and most natural form of human communication – are rich and ripe with the unvarnished truth about our clients’ values. We just need to ask the right questions and then listen, really listen.

I have found that the best way to genuinely understand our clients and their values is to ask them thoughtful and insightful story-leading questions in an appropriate setting and then settle back and listen to their answers with all the love and attention and encouragement we can muster. I have learned that who they are and what they deeply value are woven into the stories they tell and can be discovered by a caring advisor. That is the essence of what I call “Story-based Planning in a Thinking Environment.”

I’m happy to say that I use a questionnaire mostly for fact finding, not for developing a values-based plan. I make it a point in every Peace of Mind Planning Session or Whole Family Wealth™ Planning Session to purposely set the questionnaire aside and spend a significant amount of time listen to my clients’ stories.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan. He specializes in Whole Family Wealth™ planning for professionals with minor children, doctors/physicians, nurses, lawyers, and the “sandwich generation” (caring for parents and children) – and does so from a Christian perspective. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

Planning For Your Values – Story-Based Planning (Part 2)

August 8, 2010 / Michael

Your values are important to you, otherwise you wouldn’t hold them as values. So why don’t we plan to pass on our values as much as we plan to pass on our retirement account, our cars and other assets we have? It’s a great question and one that is tackled by my colleague and mentor Scott Farnsworth in the second in a series on Story-Based Planning. You can read the first post here. Here is what Scott has to say:

For at least the last decade, the hottest buzzword in the planning professions has been “values-based.” You couldn’t turn around without running into “values-based” selling, financial planning, estate planning, you name it. But what in the world is “values-based planning” anyway?

Looking under the label and behind the question is helpful, I believe. In truth, all planning is based on someone’s values, so the question behind the question is whose values? To acknowledge our professions’ dirty little secret, the truth of the matter is that in the “pre-values-based planning era” nearly all planning was based on the professional’s values or, at best, on the values we assumed the clients held.

If the professional was selling life insurance, lo and behold, one of the key values was “tax-free liquidity at death.” If the professional was selling living trusts, it was generally assumed the clients valued “avoiding probate,” “reducing estate taxes,” and “distributing the assets” in some orderly fashion, usually in a way consistent with the drafter’s trust templates. If the professional was selling investments, every financial plan was based on the premise that the client wanted to pay for his kids’ college and then retire comfortably a few years before he turned 65.

Not surprisingly, every plan a planner created looked strikingly similar to every other plan he created: they were all based on the planner’s values and assumptions, not the client’s.

What the term “values-based planning” was trying to communicate was the notion that each client has a personal set of values that ought to be ascertained early on in the planning process and then used to fashion a financial plan or estate plan that was unique – truly unique – to that client. The real question then became, for those planners actually trying to create plans based on client values, “how do you ascertain the client’s values?” At least now the issue was correctly framed.

This breakthrough led to the advent of what I call “questionnaire-based planning.” Client values, the planning professions assume, can be ascertained through a cleverly designed multi-page questionnaire. But while “questionnaire-based planning” is far better than its predecessors, it still fails in its primary objective: to develop for the planner and the client a clear understanding of what’s in the client’s heart – the client’s deepest purposes for planning. For that you need story-based planning.

In the next installment I’ll outline why “questionnaire-based planning” is merely masquerading as genuine values-based planning. It looks good on the outside, but inside it has no real power to get to the heart of the matter.

To be continued.

The Power of Story Based Planning – Introduction

August 4, 2010 / Michael

If you read my post here about Whole Family Wealth Planning™, you know how important it is to share your values, insights, stories and experiences. It got me thinking that I should share a series of posts written by my colleague and mentor, Scott Farnsworth. As we walk through this area via Scott’s thoughts, please share your thoughts as well via comment below or contacting us.

Virtually all my “official” training as an estate planning attorney and a Certified Financial Planner has been about numbers. Tax rates, code sections, rates of return on investments, asset allocation models-the unwavering focus has been on something quantifiable. The underlying message always came through loud and clear: unless something can be tallied on a ledger sheet, it isn’t worthy of our professional attention and probably isn’t all that important. Only “numbers-based planning” is real planning.

But my gut-and my real-life experience-told me something different. They told me that when numbers-based planning collided with human beings, i.e., our clients and their children and grandchildren, either the planning was never actually implemented by the clients, or the wheels came off when the planning landed with a thud on the succeeding generations. They told me that the most clever and tightly-wound estate or financial plans could and would be unraveled by the people they were designed to “help” or “protect.” They told that we planners ignore the human issues at our peril, and at the peril of the beautiful numbers-based plans we crank out.

My sense was often that with numbers-based planning, the tax tail was wagging the dog-driving the planning instead of riding in the back seat along with all the other significant but not critical factors. One significant study found that the likelihood of a family-based business surviving into the second generation was inversely correlated to the amount of tax planning the first generation had done. (Correlates of Success in Family Business Transitions, Morris, Williams, Allen, and Avila, Journal of Business Venturing 12, 365-401, 1997). In other words, the tax doctors were actually killing the patients they were hired to “save.”

Numbers-based planning might work if we were planning for robots, but we’re not. We’re planning for real flesh-and-blood people. I recall a series of conversations with a couple from New York City who had spent tens of thousands of dollars for one of the premier law firms in the country to draft a plan to care for their estate and their two teenage children. The plan touched all the legal and tax-planning bases, but in the words of the wife it was “cold and impersonal, not what I want to leave for my children.” The expensive, well-drafted plan was never executed but remained nothing more than a pile of paper, glistening with lawyerly brilliance on the surface but empty and meaningless underneath.

Unfortunately, that couple’s experience is repeated all too often. In my view, such outcomes will not change until we take a fundamentally different approach to this whole business of estate and financial planning. They will not change until we spend more time listening to client stories than tallying up their balance sheets; until we tailor their plans to the human hopes, dreams, and fears imbedded in their stories; and until the plans we create help them tell the story of their legacy-of who they really are and what impact they have had and hope to have on the people and causes they love. I call this approach story-based planning.

Michigan Special Needs Children – Caring Through Planning

August 1, 2010 / Michael

This post is an excerpt from a recent issue of my weekly e-newsletter. I received such a positive response that I thought I would share it with my blog readers as well. If you would like to receive these fun, informative and helpful weekly e-newsletter, click here and put in your information.

Today I want to talk about special children.

Every child is special, in their own unique way. That said, certain children are even more precious–and their needs are great. I’m referring to what many call “special needs children” (though, it’s perhaps better to call them children with special needs–after all, they really are “children” FIRST, and not to be defined first by their “needs”!).

Because this is something which adds certain complications to any family, I thought I’d take a moment this week to address 3 key wealth strategies for families with these beautiful, special children.

Feel free to forward this along to families who come to mind, and let them know that we will certainly assist them with their unique situation.

Let me know what you think!

Here is the standard thinking, in regards to setting up your affairs with children who have special needs:

Families realize that they have to support these children for the rest of their lives. So, they typically write wills and take out significant term life insurance policies. They are careful to name a trust as the beneficiary, because if their child has more than a minimal amount of assets upon reaching age 18, he/she will no longer be eligible for some government benefits.

However, while these families are indeed on the right track, parents with special needs children also should:

1. Set up a second trust. I am a strong supporter of stand-alone special needs trusts. The purpose of this additional trust would be to make sure that the provisions in the parents’ trust don’t disqualify the child from receiving any government benefits that would otherwise be available for his/her care. It’s better to “wall off” what the child receives. The separate trust is also there so that friends and family members can contribute to the child’s care while the family is still alive–without causing the child to lose eligibility for any government benefit programs.

2. Increase savings. These families need a much larger emergency fund than most, and they also need to create a “reserve fund”. They should concentrate on savings–rather than paying off debt–especially if interest rates on loans are low.

3. Plan for three retirements. These families not only have to plan for their retirements, but also for their child’s long-term care. They should maximize their savings and take an aggressive approach with their portfolio to maximize returns over the long run.

While I’m not a financial planner, I thought that these tips were so important that if you find yourself in this situation, you should raise them with your professional adviser.

Warmly (and until next week!),
Mike

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan. He specializes in Whole Family Wealth™ planning for professionals with minor children, doctors/physicians, nurses, lawyers, and the “sandwich generation” (caring for parents and children). He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

“Oh, We Didn’t Use an Attorney…We Bought It Online”

July 28, 2010 / Michael

Because I regular comment about the risks and dangers of online estate planning documents, I’ll keep this post short. The words above were heard by a banker friend of mine. The context of the statement is just to good to not write a post about it.

The customers have a very elderly aunt (in her 90s) for whom they have power of attorney. They brought the document into the bank because aunt needed to them to get into her safe deposit box. So the banker sends the power of attorney to the bank’s legal department. The answer back – “no.” Why? Because the power of attorney made a very general statement about financial powers and did not include the ability to access a safe deposit box. The banker’s suggestion to them was to go back to the attorney who drafted it and have it changed. They’re response was, “oh, we didn’t use an attorney . . . we bought it online.” So, they had to go get elderly aunt who lives almost an hour away, bring her into the bank on a different day, and have her authorize drilling the safe deposit box (she had lost the keys). Were they upset? You bet they were! But it was of their own doing.

And they were lucky! How? Because if aunt hadn’t been competent, they would have had to go to court to get the authorization.

Almost every attorney I know who specializes in estate planning includes a provision in the power of attorney to cover the above example. Why? Because it’s what we do. We deal with it on a daily basis. Although not having the one provision is not the point, we know that more and more financial institutions are requiring specific authority for different transactions such as accessing a safe deposit box.

Do you have a similar story? Email me or share it in the comments below. I always enjoy hearing from my blog readers.

Motley Fool Tries to Explain a Trust

July 25, 2010 / Michael

You know me. I’m not a fan of folks giving advice in an area about which they’re not qualified. And as long as people would take it for what it’s worth and seek out the advice of professionals in the area, I’m ok with it. But many do not. Many folks hear or read advice from a big name (e.g., Dave Ramsey) and take it as the best advice to follow, rather than just the opinion of someone who is not a professional in the area.

So, what does that have to do with the Motley Fool? It is exactly what they did in their “Ask the Fool” section in the Sunday, July 25, 2010 business section of the Grand Rapids Press. First, I want to say that I’m a big fan of the Motley Fool for financial advice. Much like I’m a fan of Dave Ramsey’s advice for getting out of debt. However, when they decide to go “off the farm” and delve into an area that is not their expertise, my enthusiasm for their advice quickly wanes.

The question asked in the “Ask the Fool” section was: What’s a trust? Brevity of the response aside, it mis-stated part of the concept and gave some advice that is far short of ideal. They stated that a trust is a legal tool whereby someone gives control of property to a person or an institution. Ok, close enough in my book. I would say it is a contract/agreement between the creator of the trust and the trustee agreeing that the trustee will hold title/ownership of the assets for the benefit of the beneficiary(ies). Then they go on to say that the beneficiary owns the property but the trustee controls it. I beg to differ. Who the “owner” is depends on the terms of the trust. Maybe the beneficiaries are the owner, maybe not. Yet they just make the blanket statement and leave it at that.

Some will say, “Mike, you’re really splitting hairs here.” Maybe I am, maybe I’m not. So surely they must have advised the person asking the question to talk to an estate planning attorney, right? Nope! Their response was to “learn more from a financial adviser!” Yep, that’s right. A financial adviser. I guess that shouldn’t be a surprise since Motley Fool is known for giving sound financial advice. Yet here they are (incorrectly) answering a question about a “legal tool” (their words) and then directing folks to a financial adviser rather than an estate planning attorney. Would they suggest a reader talk to an estate planning attorney about the best long-term investment to get the reader to retirement? Of course not!

So there you have it. Again, a well respected person/group highly qualified in one area can’t help but give advice on a topic about which they are not professionals. And then they direct readers to someone who, although qualified in the financial arena, is also not qualified to give proper advice.

What do you think? Am I blowing these issues out of proportion? Should these individuals and institutions be held accountable for the “off the farm” advice they give and the way it could harm the legacy of families? I would love to hear your thoughts . . . even if it is to tell me I’m “off the farm.”

Legacy Planning for Your Whole Family Wealth™

July 22, 2010 / Michael

When meeting people for the first time, I’m regularly asked “what do you do?” I help families create a lasting legacy through Whole Family Wealth™ Planning. Of course that prompts the question, “what is Whole Family Wealth™?” I thought I would share the answer here so everyone can benefit.

Whole Family Wealth™ is about planning to pass on more than just what you have – it’s about who you are and what is important to you. Your values, insights, stories and experiences. Because it is those values, insights, stories and experiences that are going to matter most to your children/grandchildren when you are no longer around.

For instance, the Allianz American Legacies Study found that non-financial items that parents leave behind, like ethics, morals, faith and religion, are ten times more important to people than the financial aspects of inheritance. And that makes sense. If you think about it, by having your values, insights, stories and experiences shared with them, your family will be able to build their own financial wealth. Sadly, it doesn’t work in reverse. Once you are gone, so are any values, insights, stories and experiences you haven’t passed on. Experience has shown me that even though we think we do a great job of sharing those “intangible assets,” in fact we have so much more that we could have shared that would have added a lot to the Whole Family Wealth™ of our loved ones.

So, how do we plan for your Whole Family Wealth™? We do several things:

First, we take a significant amount of time to really learn about who you are as a person – your goals, wishes, hopes, and dreams for yourself and for your loved ones. We want to know who you are as a person and what is important to you. One of our clients commented that “Mike was very easy to talk to and I was able to convey my thoughts and feeling about my plan. He listened to me very patiently and gave me his full attention.”

Second, we work with you to determine how we can use planning as a way to pass on these goals, wishes, hopes and dreams. The idea being that your plan is uniquely representative of who you are and what is important to you.

Third, we include ongoing reviews of your planning at least every 3 years in all of our planning levels to make sure your plan is still in line with your legacy goals.

Fourth, we include a Priceless Conversation in all our planning levels. This is a conversation we have with you on various subjects that enables you to share your legacy from your heart, not your head. We record the conversation to a CD which is then placed in a presentation box with a summary of the conversation and the questions – this becomes the first part of your “legacy library.” There are numerous topics about which we can have a Priceless Conversation.

Finally, we are constantly seeking out new ways to help you convey more of your Whole Family Wealth™ based on our own efforts and your feedback

Have questions? Curious to know more? Wonder how your specific family situation can benefit from Whole Family Wealth™ Planning? Give us a call or send us an email. And if you reference this blog post your Peace of Mind Planning Session will be FREE ($750 value).

Asset Protection Planning for Physicians

July 18, 2010 / Michael

Growing up with a mom who has worked in the medical field for over 35 years, I know of the sacrifice and struggle that Michigan physicians face on a constant basis. They are constantly targets of malpractice lawsuits as well as other legal actions such as employee lawsuits for sexual harassment, unfair termination and discrimination; and business and practice-related litigation. And it seems that Physicians are targeted for every ill-conceived investment idea. Yet they sacrifice their time and expertise to help care for others. It is truly a noble profession.

Do they deserve to be in these cross hairs? I sure don’t think so. That’s why I’ve been working on better serving physicians and their families. Contrary to what many believe, asset protection planning is not all about offshore trusts and Swiss bank accounts. It is about adopting advanced planning strategies that legally place assets beyond the reach of creditors, discouraging lawsuits by lowering a physician’s financial profile so that they become a far less attractive target, and enhancing leverage in negotiations if a lawsuit is filed.

Know that although asset protection planning is confidential, it is NOT based on secrecy or fraudulent transfers, does NOT involved hiding assets and is NOT a tax dodge. Professional and personal convictions don’t allow such unethical (and potentially illegal) methods.

It is important for Michigan physicians to work with an estate planning attorney who is both well versed in these advanced planning strategies AND can understand the threats Michigan Physicians face and the constantly changing environment in which they work. Are you a Phyisican or do you know a Physician? Please share your thoughts.

Michigan Pet Trusts

July 14, 2010 / Michael

For many of us our pets are truly members of our family. Whether a “traditional” pet like a dog, a cat or a horse, or a “nontraditional” pet like a snake, duck or llama, we care for them much like we do our human family. And many of us are concerned what would happen to our pets if something happened to us (death or incapacity). Would someone care for them or would they end up in a shelter? Who would care for them? How would they care for them? And would they treat them the same way we did?

Well, guess what? You CAN plan for your pet’s care if something happens to you and the way to do it is through your estate plan. Michigan is one of the growing number of states that recognizes the care we have for our pets and provides a way for you to plan for their care if you aren’t able to care for them yourself due to incapacity or death.

You can plan for your pet’s care by setting up a Pet Trust with Lichterman Law. Although unique to each family and pet, there are a few general requirements for Pet Trusts:

It must be for a domestic or pet animal
A Pet Trust terminates when no living animal is covered by the Pet Trust
None of the Pet Trust’s principal and income can be used for anything other than for the benefit of the covered animal(s), unless otherwise stated in the Pet Trust

We can create a plan that ensures your pet is cared for how you want and by who you want. Why wouldn’t you set up a Pet Trust so all your family members are cared for?

Contact us if your pet is a member of your family and you want to make sure they are cared for properly if something happens to you.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan. He specializes in “whole family wealth” planning for professionals with minor children, doctors, nurses, lawyers, and the “sandwich generation” (caring for parents and children) – and does so from a Christian perspective. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

Why Estate Planning Is Especially Important for Women

July 11, 2010 / Michael

I love perfect timing! I read through a recent blog post by Danielle G. Van Ess, a colleague of mine and fellow Wealth Counsel member, that fit right in with my ongoing blog series introducing estate planning. I started the series by looking at how critically important estate planning is for various family types and situations such as parents with minor children and professionals.

Well, Ms. Van Ess recently wrote a blog post on how vital estate planning is for women (read it here) based on a Forbes.com article. I strongly encourage you to read her post and the Forbes article – the information is too vital to pass up. Although Massachusetts and Michigan laws may differ, many of the concepts mentioned in the articles are the same.

I won’t rehash the post or article here, however I do have a couple of thoughts to share:

The importance of adequate life insurance on BOTH parents cannot be overstated. The vast majority of families I meet with are under insured by any measure. And I typically find that mom is more likely than dad to be under insured. Ms. Van Ess points out the importance of life insurance for stay at home moms. Just think dad – if something happens to mom, you are doing to have to stay home with the kids, hire in-home help or pay for daycare. How would that financial change affect YOUR family? Talk to your life insurance agent or financial adviser to make sure you are adequately insured. If you would like suggestions on who to contact, just let me know.
Don’t underestimate your importance in putting a plan in place for your family. I can count on one hand the number of times we’re contacted about estate planning by dad. It is almost always mom. You play a vital role as the key decision maker for planning. Make sure the decision of how you plan and who you work with is the best for your family.

Do you have stories to share about the importance of the estate planning for you and your family? For your mom, sister, aunt or friend? Please share. I always enjoy hearing about others’ experiences.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan. He specializes in “whole family wealth” planning for professionals with minor children, doctors, nurses, lawyers, and the “sandwich generation” (caring for parents and children) – and does so from a Christian perspective. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

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