Category: Estate Planning

As a parent, the last thing I want if something happens to me is for my children to be put into a situation in which they feel scared, are surrounded by people they don’t know and don’t know just how much love I have for them. With these 3 Secrets you can guarantee your children will always have the security of knowing just how much you love them – even if you can’t tell them.

Secret #1: Put in Place a Clear Plan for the Protection of your Children — 74% of parents have not named guardians and of the 26% who have, most have made 1 of 6 common mistakes that leave their kids at risk. With a plan in place that names short- and long-term guardians for the care of your children and gives clear guidance to your caregiver and everyone you’ve named to care for your children, your children never have to be put in a situation in which they would be taken out of your home and into the hands of strangers if something happens to you.

Secret #2: Legally Document Your Decisions— Parents regularly tell me that they have discussed and agreed upon a guardian for their children and have even made their wishes known to their families; however, not documenting your decisions can result in your wishes not being followed when it is too late. If you don’t communicate your wishes in a legally binding document, you are placing your children in the middle of a situation in which every family member has equal priority of guardianship and the decision about the care of your children will be left in the hands of the court system and a Judge who doesn’t know you or your kids. Legal documentation is particularly important if you intend for a friend to care for your children as courts will almost always choose a family member over a friend.

Secret #3: Provide a Foundation for Your Children’s Financial Future— Whether it’s through life insurance, savings or some other means, providing sufficient financial resources for your children’s care is your responsibility. And, as a responsible parent, you must take steps to protect what your children will receive. To do so, establish a living trust to receive any life insurance benefits your children would receive so that they don’t get access to your assets at the age of 18 and make sure your living trust holds title to any assets that would go through probate in the event of your death. And, if your estate is large enough, you will want to plan to avoid estate taxes as well.

I encourage you to contact Paula, our Client Services Director, if you have not taken care of these three issues.  She will schedule you for a Family Wealth Planning Session with me, West Michigan’s ONLY Personal Family Lawyer™.  We will discuss what would happen now, what you would want to happen, how to fill any gaps between the two, and whether we are a good fit to work with each other.  I continue to appreciate the dedicated readers of my blog and want to support additional readership.  So, I will waive the typical fee for the Family Wealth Planning Session ($750 value) for three people who call to schedule a session and specifically reference this blog post.  My schedule continues to fill up quickly, so I must limit this to first come, first served.

According to this New York Times article (http://bit.ly/41y1kF), the children of Martin Luther King Jr. have settled their differences over his estate.  The lawsuit involved Bernice King and Martin Luther King III against Dexter King, president of King, Inc.  King, Inc. is the company that runs their father’s estate.  Bernice and Martin accused Dexter of not involving them in decisions about the corporation, withholding documents, and refusing to hold shareholder meetings since 2004.  It never ceases to amaze me how family harmony can break down after a patriarch or matriarch’s passing.  This is a lesson to us all to not only plan, but to plan for contingencies and specifically address points of possible contention.

Before hiring a wills & trusts lawyer to guide you, your family or your business, ask these questions to ensure that you don’t end up paying a whole lot of money for services that are not what you need, expect or want. Hiring an attorney does not have to be a fearful experience. Instead, it can be the most empowered decision you ever make for yourself.

1. What will happen during an initial meeting with your office and how much will it cost?

When you begin to consider getting your legal and financial affairs in order, the first thing to do is call the offices of lawyers who you will meet with to handle your planning.

This is a great opportunity for a first level screening to find the right lawyer for you, your family and your business. Pay attention to how the phones are answered by the office team. You want to find a lawyer who has a live person answering the phones who can answer quick questions for you when you are a client.

When you do talk with someone on the phone, be sure to ask what will happen at the initial meeting and whether there will be a charge for the meeting.

Look for an educational initial meeting. Ideally, the purpose of the first meeting with your lawyer is not just to get to know him or her, but to provide you with specific guidance and information that will benefit you, your family and your business.

You want to leave this meeting with a clear action plan for what your next steps are to ensure your financial and legal affairs and business are set up the best possible way for your family.

Now, it may be that you have to pay for this guidance so don’t be afraid to do that because it can be a hugely valuable education. The key is, you want to know what the cost is going to be upfront so there are no surprises.

Don’t expect to get valuable information that will help your family during a free initial consultation. When a lawyer routinely gives away their time for a free initial consultation it’s not to give you an education, it’s so you can meet the lawyer and decide whether you want to work with him or her. Don’t expect free legal guidance.

2. Are all of your fees flat fees? What is included in the flat fee? What is NOT included in the flat fee.

You want to be sure that you avoid a nasty surprise down the road. Some attorneys will indicate that they use flat fees, but then may tack on additional charges such a photocopying, telephone, courier, postage, recording fees and other expenses. While it may be reasonable in some instances to add on such fees, you want to make sure that you set the proper expectations up front so you don’t end up with a surprise bill in the mail.

3. Does my planning fee include a regular review of my legal documents? What if I want to make changes later? What about on-going work after completion of my initial plan?

Far too often today, families put in place legal documents and think “great, that’s done”, now I don’t have to think about that anymore. Then, the end of their life comes or a crisis pops up and their family finds out that the documents are out of date and the assets aren’t owned properly anyway. Then, the plan fails. Or, business owners set up an entity to shield their personal assets from their business, but then fail to operate the business properly and keep their entity in compliance. Then, the business plan fails.

I blame these failures on lawyers who don’t set the right expectations for their clients.

The truth of the matter is, with estate planning, you can’t set it and forget it. Your wills and trusts and your business documents are living documents that need to be reviewed and updated throughout your personal or business life. And you want to find a lawyer who will keep everything up to date for you, review your documents regularly, and offer a program to provide you with continuing guidance on an ongoing basis without hourly fees.

Look for a lawyer who has a membership program or ongoing service program so you can reach out to your lawyer on an ongoing basis for legal, financial and business consultation without worrying about being nickled and dimed. Oh, and be sure your lawyer isn’t going to charge you for photocopies and faxes!

4. Do you make sure my assets are titled in the right way and my business stays in compliance?

You can have the best business structure and the best legal plan set up for your family, but if your assets are not titled and structured properly and if your business does not stay in compliance, it’s all a false sense of security because when push comes to shove and a crisis happens, those legal documents won’t work.

Make absolutely sure that the lawyer you are working with is not only going to put legal documents in place for you, but is also going to finish the job by ensuring your assets are structured properly and your business stays in full compliance.

5. Can you help me make smart choices about things like buying insurance, saving for college, and retirement planning?

Your personal lawyer can and should help you make decisions not only about things like legal documents, but also about things like buying insurance, saving for college, planning for retirement and all the other challenging decisions that will come up along the way of your life and your business. Your business lawyer should be keeping you informed about things like hiring and firing, trademarking and copyrighting, and growing your business.

This doesn’t mean your lawyer needs to be licensed to sell insurance or financial products or practice employment law or intellectual property, just that they have a big enough breadth of experience and knowledge and access to the appropriate resources that they can be a trusted advisor to you on these issues helping you avoid expensive mistakes.

6. Do you have a process for helping me capture and pass on my intangible wealth, such as my intellectual, spiritual and human assets or who I am and what’s important to me or do you primarily focus on financial assets?

There’s a movement happening in the world in which we are finally beginning to realize that our wealth is far greater than the sum total of the dollars in our bank, brokerage and retirement accounts. In fact, many of us are becoming aware that our intangible assets are much more valuable.

When you are working with a personal lawyer, be sure to find a lawyer who will help you to capture, document and pass on not just your financial assets, but ALL of your assets, including the most often overlooked intangible assets, like who you are and what’s important to you.

Your lawyer should have in place an actual process so that when your planning is complete, you have created either written or recorded messages to your loved ones that pass on your values, stories, insights and experience.

7. How are you able to be responsive to my needs on an ongoing basis?

One of the biggest complaints people have about working with a lawyer is that lawyers are notorious for not being responsive. In fact, I’ve heard of situations in which clients have gone weeks without getting a call back from their lawyer.

This generally happens when a lawyer does not have enough administrative support in his or her office. Far too many lawyers believe they can take care of everything in and around their office themselves, from paperwork to client meetings to calendaring to returning phone calls to connecting with their clients other advisors, the list goes on and on. Truth is, a lawyer who is a true solo practitioner without administrative support or in a firm without adequate support will become overwhelmed and non-responsive to your needs.

You can and should ask your lawyer how he or she will respond to your ongoing needs, how quickly calls are returned in the office, if there is someone on hand to answer quick questions and if you should expect to get right through to your lawyer when you call the office.

A great way to test this is to call your prospective lawyer’s office and ask for him or her. If you get put right through or even worse sent to a voicemail, think twice about hiring this lawyer because it means they do not have effective systems in place for managing and responding to calls or answering your quick questions. Instead, what you want is for the person answering the phone or another team member to offer to help you and if he or she cannot then to schedule a call for you to talk with your lawyer at a future date and time when he or she will be ready to focus on your matter.

Your lawyer cannot be effective and efficient if he or she is taking every call that comes through to him or her – all calls should be pre-scheduled when you are both ready and your lawyer can focus on your specific needs.

8. How will you proactively communicate with me on an ongoing basis?

Unfortunately, most lawyers do a horrible job of proactively communicating with their clients on an ongoing basis. The general thinking in the legal industry is that legal work is transactional in nature and clients will call when something changes. But, this is faulty thinking and in my opinion just pure laziness on the part of lawyers.

You want to look for a lawyer who will proactively communicate with you at least quarterly by mail via an informative, easy to read newsletter and monthly by email. I prefer to hear from the professionals I work with monthly by mail and weekly by email, but progress can only happen so fast.

If you are considering hiring a lawyer who does not proactively communicate with his or her clients, think again. This lawyer might be stuck in an old, outdated mindset that won’t serve your needs in the best possible way.

Don’t be afraid to ask these questions for you hire a lawyer to work with your family on your personal and business legal planning. You need to be satisfied by the answers you receive to these questions, as they often sneak up on families after-the-fact, and can be a major drain on your family’s cashflow.

According to this Washington Post article, Sean Taylor, the late Washington Redskins safety, died without a will to give direction for the distribution of his nearly $6 million estate.  The bulk of the estate went to his daughter pursuant to Florida intestacy laws.  Now his mother is trying to lay claim to some of the estate.  Known for giving lavish gifts to various family members during his life, it seems rather significant that what little estate planning he did (joint account, life insurance beneficiary designation), did not include his mother.

Although Taylor’s estate was large, not having proper estate planning in place can cause these same problems for any other economic situation.  If you would like to keep this from happening to your family, please call our office at (616) 827-7596 to schedule a Family Wealth Planning Session.  To show my continued support for my loyal blog readers, I will waive the usual fee for this session for the first 5 families who call to schedule and specifically mention this blog post (a $500 value!).

If you live in the West Michigan area, ArtPrize (http://www.artprize.org/home) is all the rage.  It’s what people are talking about and I am personally looking forward to a walking tour tomorrow.

Seeing and hearing about all the various art pieces, from sculptures to paintings, got me thinking . . . many of these pieces are quite valuable – have the artists or owners properly planned for what would happen to the treasured pieces if they pass away?  That’s right, estate planning plays a key role in ensuring that your prized possessions – intellectual, spiritual, and human assets – are dealt with according to YOUR wishes, not those of the state or courts.  Estate planning is not just about passing on your money.

If you want the peace of mind of knowing that your WHOLE wealth is properly planned, contact me for a Wealth Planning Session.  The first 5 people who do so and specifically mention this blog post will receive the Wealth Planning Session at no cost as my gift to my blog readers (a $500 value).

According to the Wall Street Journal Online (http://online.wsj.com/article/SB10001424052970203863204574346930384296134.html), the U.S. House of Representatives is likely to block the repeal of the estate tax that is set to take effect January 1, 2010.  The debate continues on what will be done to provide a more permanent solution and additional certainty to estate planning practitioners.  Current thought is that Congress will, at a minimum, hold the Federal estate tax exemption amount at $3.5 million for individuals, rather than let the estate tax lapse in 2010.

Let’s hope they give this some more serious thought, and soon, as virtually everything is taking a back seat to the current health care debate.  If they do not take action, the estate tax will be repealed in 2010 (with changes in basis treatment) and the exemption amount will return to $1 million in 2011.

Here is a little bit of Friday humor for everyone.  According to this article on Money Central, these are (in their opinion) the 10 strangest will bequests on record:

10. To boldly go..

Gene Roddenberry, creator of the Star Trek television series (motto: To boldly go where no man has gone before), appropriately had his ashes blasted into space on a satellite and distributed as it orbited the earth.

The memorial spaceflight, in 1997, quickly set a trend – especially among fellow Trekkies. James Doohan, who played chief engineer Scottie on the Starship Enterprise was also projected into orbit as did astronaut Gordon Cooper. Bit tough on the families if they want to leave flowers.

9.  Doggone

German Countess Carlotta Liebenstein left a staggering fortune of 139 million German marks (about £43 million) to her beloved pet dog Gunther III when she died in 1991. The hound and his offspring – imaginatively named Gunther IV – were able to live in the lap of luxury in a mansion with a personal maid, chauffeur and customised pool.

This isn’t the only pampered pooch to have benefited from a bequest. New York hotel magnate Leona Helmsley, dubbed the “Queen of Mean” during a 1989 trial for tax evasion, left $12 million (£6 million) of her estimated $8 billion estate for the upkeep of her Maltese terrier Trouble. Two of her four grandchildren meanwhile got nothing.

Unsurprisingly, the request by Helmsley, famous for her quip that “only the little people pay taxes,” sparked nothing but trouble. After the will was contested, the pooch was stripped of $10 million by a Manhattan judge leaving the poor thing with a paltry $2 million. It’s a dog’s life.

8. The Great Stork Derby

Eccentric lawyer Charles Vance Millar was well known in Toronto, Canada, for his love of practical jokes and he saved the best until last.

He bequeathed a large sum from his significant estate to the woman in Toronto who could produce the most children in the ten year period after his death. The resulting contest, after his death in 1926, became known as the Great Stork Derby. The four winning mothers, Annie Katherine Smith, Kathleen Ellen Nagle, Lucy Alice Timleck and Isabel Mary Maclean, each received C$125,000 for their nine children.

The pranks didn’t end there. Millar’s will also left shares in racetracks and breweries to anti-gambling and temperance supporters. Three men who were known to despise each other were granted joint lifetime tenancy in Millar’s Jamaican holiday home.

7. Death wish

Revenge is sweet – even from beyond the grave. American housewife Mary Kuhery is reported to have left her husband $2 as long as he promised to spend at least half of it on a rope with which to hang himself.

In 1960 Samuel Bratt was slightly less vengeful. However, he still grasped the opportunity to get even with his wife who had never allowed him to smoke. He left her £330,000, a huge sum back then, provided that she smoke five cigars a day.

6. No women allowed

When misogynist American lawyer T.M. Zink died in 1930 he left $50,000 in trust for 75 years by which time he hoped that it would have grown to $3 million. He decreed that the fund should then be used to found the Zink Womanless Library. The words “No women admitted” were to mark each entrance and no books, works of art, or decorations by women were to be permitted. His family challenged the will and won.

5. Alas poor Yorick

Juan Potoachi gave 200,000 pesos to the Teatro Dramatico in Buenos Aires in 1955, on condition that his skull be preserved and used as Yorick in Hamlet. William Shakespeare himself was less generous. The bard left most of his estate to his elder daughter Susannah Hall while his wife only received his “second best bed”.

4. Fangs very much

Harold West was so worried that he would become a vampire after his death, in 1972, that he left strict instructions that his doctor “drive a steel stake through my heart to make sure that I am properly dead”. That should do it

3. Live forever

Predeceased by his wife and two daughters, John Bowman, from Vermont, America, was convinced that after his death, in 1891, the family would be reincarnated. In anticipation, he left a trust fund for the maintenance of his 21-room mansion, including a demand that servants prepare dinner nightly in case the Bowmans were hungry when they returned. The money ran out in 1950.

2. Monkey business

An 83- year-old Danish widow left the equivalent of half a million Danish crowns (about £40,000) to six chimpanzees – Jimmy, Trunte, Fifi, Trine, Grinni and Gigi – who lived at the Copenhagen Zoo. Senior Deputy Judge Christian Notlevsen, who read out the testament in front of their cage, said the heirs had behaved better than many people he had seen in court during readings of wills.

1. Poetic licence

The last wish of Donal Russell, from Springfield in the US state of Oregon, was to have his body skinned, his hide tanned like leather and then used to bind books of self-penned poetry. The 62-year old wordsmith stated that his body “be skinned from the head down and tanned for the purpose of face binding volumes of my verse.”

The squeamish funeral directors refused, so his widow asked the courts to help her honour his wishes. The request was turned down because it violated laws about what could be done to human remains. How prosaic.

The Wall Street Journal online had a great article here about providing a means of passing your electronic assets through your estate plan.  This consideration is becoming more important as our information is increasingly stored online or in other digital formats.  The article provides some great food for thought and I, for one, am continually looking for new ways to help my clients address the concerns the article raises – something my background in Information Technology makes me uniquely suited to do.

It appears from this ESPN online article that Steve McNair had no will and likely had done no estate planning.  Rather than go in-depth to explain the potential disastrous implications, I will direct you to this post by David Shulman, a Florida estate planning attorney.  Mr. Shulman provides an excellent analysis of the situation.  I encourage you to share your thoughts, comments, and suggestions on the situation and Mr. Shulman’s analysis.

I had a recent visit that reminded me of the uncertainty surrounding family behavior and the effect it can have on a person’s estate.  This gentleman’s father passed away a year ago.  He knew that his father had a will (he and his mother saw it), had a general idea of what it said, and also knew that his father had several bank accounts and some life insurance.  The stickler is that he cannot provide any supporting documentation (bank statements, life insurance policies, the will, etc.), which makes it very difficult to make an assessment of any potential claims he may have against his father’s estate.

Then the family “fun” started.  Allegedly, his brother “lost” the will and this gentleman does not know who the attorney is who drafted the will.  Although that can put a wrench in the process, there are lost will procedures that can be followed to effectively probate the lost will.  The “fun” continues.  Allegedly, the brother also has been cashing checks made out to the father and recently has been carrying a lot of cash – arguably from his father’s accounts.  I have my doubts about the veracity of some of those statements as I know bank procedures and am fairly certain those transactions could not have occured without some level of authorizing document.

Still, do you think the father had any idea something like this could happen after his passing?  Arguably, there was a will, and that was good planning by the father.  As shown by this example, however, there are still contingencies that can occur that will keep your wishes from being carried out according to your plan.  I encourage anyone doing estate planning to make sure they seek out an attorney who will help you address these contingencies by providing practical advice for protecting your estate planning documents and making sure they are followed after your passing.