Tag: grand rapids wills

A Family Mission Statement Can Help Any Family

June 30, 2010 /

This is a guest post from Ron VanSurksum, CFP originally posted on his blog here and reproduced here with his express permission.

A Family Mission Statement Can Help Any Family Manage Assets, Philanthropy and Direction

A family doesn’t need a surname like Vanderbilt to benefit from a family mission statement.  A mission statement is a collaborative document created by one or more generations of family so standards and goals can be set for the handling of all family assets, including businesses and philanthropy in particular.

While mission statements aren’t legal documents – in fact, many are done both in written form and on videotape as a companion to legal wills and directives –  their purpose is to make a record of the family’s values, goals and aspirations and how those sentiments should drive future decisions about family wealth management, business succession plans and charitable pursuits.  Multi-national companies have mission statements. Non-profit corporations have mission statements.  A mission statement for your family, helps identify and clarify specific values and goals, facilitates group decisions, instills confidence and encourages unity.

It should also identify family leadership who will work with other relatives in implementing those goals.

While the end product should produce a document built from discussion, argument and consensus, it’s not so much about the piece of paper as the process. Many families start the process as a way to build consensus about long-term financial, business, estate and philanthropic goals, but the conversation can take twists and turns that don’t directly involve the family money. In this process, a family can identify the strengths, weaknesses and unearthed priorities of all family members and might reveal leadership few had expected.

Trained financial advisors including financial planners, tax experts and estate attorneys, can help explain the process and set an agenda for families to follow in creating the mission statement. While some extended families may elect to bring in a facilitator to guide their process, there are generally four components to a family mission statement – estate issues, philanthropy, business planning and family dynamics in general.

It also helps to start with some questions that can guide the discussion.  Many experts start with questions that first get family members talking about their relationships and how their dynamics work, and then move into business and money matters.

  • What’s most important about our family?
  • What do you think our goals should be?
  • When do you feel most connected to the rest of us?
  • How should we relate to one another?
  • What are our strengths as a family?
  • Where do you think we’ll be as individuals in 5, 10 and 15 years?
  • In order, what are the five things you value most in life?
  • How should we behave toward each other?
  • How should we take care of relatives who are or become sick or disabled?
  • How should we resolve our disputes?
  • How important is the family business to you?
  • What should we be doing differently with our family money as well as our assets inside the business?
  • What professionals or structures should we bring in to help us manage our wealth?
  • What’s the best way for us to be building our wealth?
  • What do you think the role of our family should be in helping the community?
  • What should we be doing individually and as a family with regard to philanthropy?

Structurally, the written mission statement can be whatever you agree it should be – most experts say it should be no more than a paragraph long, but that’s a guideline, not a rule. It is also very important to focus on the positive, meaning what you want to accomplish and achieve as a family, as opposed to want you want to avoid. And it needn’t be set in stone – a family should have a meeting every year or two to revise or approve its mission.  The family mission statement helps a family establish its identity and the variety of voices within, and those voices may be subject to change over time. The family mission statement is a living, breathing document that can evolve over time. In today’s fast paced world, it is easy to get caught up in the here and now, a family mission statement can help you stay true to your family’s values. As a result, families may not feel the pressure to keep up with the Joneses because their mission  statement helps achieve balance. It is also very important to focus on the positive, meaning what we want to accomplish and achieve as a family, as opposed to want we want to avoid.

The right mission statement can help reset goals and diffuse tensions later. It can also be used to moderate discussions that inevitably happen after major changes within the family – death, divorce or happily, an increase in the number of heirs and participants.

As for the age of the participants, it can start in very basic form with younger children and the process can mature as they age. It’s actually a good idea to bring young members into a customized version of the process for youngsters so they can comfortably adjust to working as adults with the older members of the family.

For additional resources on how to create a family mission statement, please consider utilizing any of these websites

http://www.nightingale.com/mission_select.aspx?from=homepage&element=missiontitle

http://www.ehow.com/how_2043790_write-family-mission-statement.html

http://www.franklincovey.com/msb/

June 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Ronald J. VanSurksum, a local member of FPA.

Online Wills and Trusts Company Gets Slapped With Class Action Lawsuit

June 7, 2010 /

Pardon the interruption of our regularly scheduled “introduction to estate planning” programming for this breaking news.  I figured it was bound to happen sooner or later and now we know . . . sooner.  According to this article, Legal Zoom recently became the subject of a class action lawsuit.  The suit accuses Legal Zoom of “unfair and deceptive” business practices.  The suit alleges the deception is in Legal Zoom’s claim that “‘. . . virtually anyone'” can create a valid legal document through the site and that the ‘customized’ documents made by nonlawyers would be reviewed for ‘accuracy and reliability,’ [giving] customers a false sense of security.”  What happened in the specific situation that brought about the lawsuit?  They bought a revocable living trust, a will and a durable power of attorney that later had to be fixed by an attorney.  My colleague Candice Aiston wrote about it here.  And to be fair, you can read Legal Zoom’s response to Candice’s post here.  It’s always best to hear both sides of the story so you can form your own opinion.

I’m not making any comment about the validity of the lawsuit, or lack thereof.  However, if you’ve been reading my posts for any period of time you know that I believe online- and software-based will-making software leaves many people with a false sense of security.  The sad part is that most people don’t find out that the security is false until they die, and then it is too late! Their family is left cleaning up the mess.  Think about a child’s toy.  They come with specific pieces that are designed to fit together a certain way and their are directions telling you how to construct it.  Yet somehow, I still find a way to put it together wrong (causing untold frustration) or never getting it put together at all!  What about you?  Think about how unique each individual is . . . and each family.

An estate plan is not a cookie cutter situation and you should run (not walk) away from anyone (lawyers included) who tell you it is.  Each person, each family, is like a snowflake – unique in who they are and in the legacy they want to create and pass along to their family after they’re gone.  And that is just one of the reasons working with an attorney who specializes in estate planning is key to making sure you pass along your “whole family wealth,” and not just a set of documents that distributes your “stuff.”  Call me if you’re interested in learning more about sharing who you are and what’s important to you – making sure your values, insights, stories and experiences will benefit your family for generations to come.  It’s about far more than money.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  He specializes in the needs of professionals with minor children, doctors, lawyers,  CPAs, and those in 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 Should I Care About Estate Planning?

June 3, 2010 /

Having figured out what estate planning “is” in my previous post, let’s move on to why estate planning is important.  Because the topic is so broad, I’m going to break it down and address it based on common life stages.  If you are curious how it applies to YOU, contact me and let’s talk about it.

Let’s start by looking at how critically important estate planning is for parents with kids under 18 years old.  It really doesn’t matter if all or some of your children are under 18.  These important issues apply if any of them is under 18:

  • Establish guardianship for your children under 18 – not doing so will leave their care up to a court to decide.  Someone who doesn’t know you and what’s important to you, your family dynamics, and your desires for your children’s future, will be the one making the decision who will raise them.
  • Establish temporary guardianship for your children – not doing so could leave them in the hands of child protective services or temporary/permanent foster care.
  • Make sure you have a comprehensive protection plan for your children so your babysitter, family, friends and guardians/temporary guardians know what to do if something happens to you and have the legal documentation to prove it.  We include instructions for these important people and even include a family emergency ID card for your wallet/purse.
  • Have your estate structured so your kids don’t succumb to “lottery winner syndrome” when they receive all of their inheritance outright at 18 years old.  Think about that for a second.  Let’s take an example: 2 children and an estate valued at $500,000 (and remember life insurance is included in the amount they receive).   Each child will receive whatever amount of their $250,000 share is not used up by the time they are 18.  Can you imagine?  Let’s say that ends up being $100,000.  How would you have handled $100,000 when you were 18?  I know how I would have handled it and it’s not pretty.  I read one study that said over half of outright inheritances are spent within 3 years of receiving them – no matter how much was received.
  • If you are a professional and subject to potential liability, make sure you structure your plan in a way that ensures your assets are there to benefit your kids and not lost to lawsuits, creditors and other liabilities.
  • Make sure you pass on your “whole family wealth,” not just your money.  This includes your values, insights, stories and experiences – who you are and what is important to you.  In my experience this is THE most overlooked part of estate planning.  It happens to be one of the most fulfilling privileges I have when working with families.
  • Have a health care directive (patient advocate designation) in place for yourself and your children to minimize conflict about your medical care.

These are just a few of the reasons families with kids under 18 need an estate plan.  Can you think of more?  Please share your thoughts and experiences.

With my next post in the series, I will look at why planning is vital for “professionals” – and you may be surprised how many families are in that group.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  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.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  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.

What Is Estate Planning?

May 31, 2010 /

Based on some recent conversations, it has become clear to me that there is much confusion about estate planning.  What is it?  What does it mean?  Why do it?  How to do it?  Why work with an attorney?  And many more questions I hear on a regular basis.  So, I’ll be doing a series of blog posts introducing estate planning and its various components.  I don’t know how many posts it will be.   I’m pulling many of the topics from my day-to-day conversations, so I’ll keep the series going as long as there are questions.  If you have questions, please ask! I’ll make sure to work your questions into this series.

So, the first question – what is estate planning?  Wikipedia defines estate planning as “the process of anticipating and arranging for the disposal of an estate.”  I believe a much better definition is one I heard from a colleague of mine from Wealth Counsel:

“I want to control my property while I’m alive, take care of me and my loved ones if I become disabled, and give what I have, to whom I want, the way I want, and when I want.  Furthermore, if I can, I want to save every last tax dollar, professional fee, and court cost legally possible.”

The one item I always add to that definition is: “to make sure that my children are cared for by who I want, in the way I want.”  Of course, this applies only to parents who have minor and/or disabled children.

So here we have the definition, the starting point.  Within the definition are many more considerations.  To accomplish these goals of estate planning, the following documents are commonly used: wills, trusts, general durable power of attorney, and health care powers of attorney/patient advocate designation.  And if you work with a comprehensive Grand Rapids estate planning attorney, there are additional considerations and documents meant to help you pass on your “whole family wealth” – not just what you own, but who you are and what’s important to you!  Because if you think about it, the money and the “stuff” will still be around when you pass away, but it is who you are as a person that will be lost – your values, insights, stories and experiences.  Check back for the next installment in this series to discover some additional considerations that are vital to having a great estate plan for your family.

Michael Lichterman is a dedicated estate planning attorney helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  He specializes in the needs of professionals with minor children, doctors, nurses, and those in 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 Cheap, Online Will – A Real Life Example

May 11, 2010 /

Ok, you just have to read this post from Gregory Luce.  He is in the process of evaluating the differences between an online will and one drafted by an estate planning attorney.  He gives a very fair, well-reasoned analysis of the document and “extras” along with it – the positives and the negatives.  As can be expected, there are flaws in the document.  I encourage you to read the comments at the bottom of the post as they point out many areas of concern.  Some of the items could cause the “effect” of the will to be drastically different than what Mr. Luce intended.

Of course I made sure to add my $.02, which centered on the wholly inadequate guardianship provisions.  I regularly refer to 6 common mistakes that parents make when naming guardians for their children and most, if not all, of them show up in this situation.

Read the post, read the comments, and then let me know what you think.  Sure, it may be less in the short run to do the cheap online will and have the misplaced peace of mind it provides.  But at what cost?  Disinheriting a child?  Having someone challenge it and win?  Having someone taking care of your children who you would never choose . . . or not in the order you would choose?  I look forward to your comments!

Make Your Heirs Rich, Not Your Lawyer

May 7, 2010 /

Say what?  Yes, you read that right.  It is the title of an article I read at the Motley Fool (read it by clicking here).  The main focus of the article is how you want to be remembered after you are gone and how your estate planning (0r lack thereof) can greatly influence your legacy.  They put quite an emphasis on wills, which is interesting because many of the more complex situations the article talks about are far better handled through a trust.  And in some of the examples, a will is almost completely inadequate.  I would also suggest that you review your plan every 3 years, at a minimum, rather than the 5 suggested by the article.  Think back three years and ask yourself how much the law, your life, and what you own has changed.  Those items change on a regular basis – so should your plan.

I’m happy to see them mention estate planning in the context of disability planning.  This is often overlooked . . . sadly, even by some lawyers.  Estate planning is not just “death planning.”   It is more than that . . . it is ensuring that the right decisions are made on your behalf if you are unable to make them yourself due to incapacity or disability.

What do you think about the article and the issues raised by it?  Please feel free to share – I enjoy reading and responding to the comments and emails.

What’s So Bad About Probate?

April 25, 2010 /

The short answer – maybe nothing, maybe something. Whether probate is “bad” is a case-by-case scenario specifically based on what is most important to the individual or family who has no estate plan or who has a will-based estate plan.(or worse, a trust-based plan that was never “funded!”).  But Mike, I thought a will bypassed probate.  That is a common misconception.  A will does not bypass probate . . . a will guarantees a probate.  The will must be probated for it to have any effect.

Ok, that was an aside – back to the topic at hand: probate.  Like I was “saying,” your most important goals and objectives will determine whether or not probate is a “bad” thing for your situation.  Here are the most common complaints I hear and which I am routinely asked to help avoid:

Time consuming: probate can be a very lengthy process.  In my experience, the average probate in Michigan lasts a minimum of 6-9 months (except for very small estates).  I rarely, if ever, see the process take less time than that.  I do routinely see it take longer than that.  And the number one thing I’ve seen cause it to drag on longer (sometimes years!) is conflict.  Conflict among any one of several people, whether it be a case of multiple personal representatives (e.g., executors), between a personal representative and a beneficiary or beneficiaries, or someone who “didn’t get what they thought they had coming,” and they want to challenge it.

Costly: probate can be costly.  In my experience, the average cost is somewhere around 3-5% of the probate estate.  That estimate includes everything that could be a cost associated with the probate: probate fee, attorney fees, appraisal costs, bond premiums, CPA fees, filing fees, etc.  For example, let’s say you have a probate estate of $500,000 (not hard to get to if you include real estate, retirement, and other assets).  5% of $500,000 is $25,000.  That’s a decent “chunk of change,” that many people would rather have going to their family.

Public: probate is public.  I’ve had several people request that I “look into” an estate for whatever reason.  Simple enough.  I go to the county courthouse, go to the probate clerk, give them the name of the person who passed away, and they provide me the file (if a probate has been started).  I can look through everything: who the personal representative is, an inventory of the assets, the will (if there is one), what the final distribution (e.g., accounting) was, and more.  Anyone can look at the file.  So, imagine that you have a young child.  You (mom and dad) both pass away and your estate goes through probate.  The estate is put into a conservatorship estate for the benefit of your child and it will be paid outright to your child when he/she turns 18.  The entire thing is public record.  Not only is your child getting the entire amount left of the estate, but there could be less-than-trustworthy people who also know what amount he/she is getting because they’ve been monitoring the probate file.  Whose to say they won’t take advantage of that opportunity.

The good news is that you can plan around all of this by meeting with an attorney who focuses on estate planning – specifically one who does so on a relationship model, not a transactional one.  Someone who will really learn about who you are, not just what you have, so they can work with you to determine what YOUR most important goals and objectives are and create a plan that meets them.

A BIG Oops! How Do-It-Yourself Estate Planning Can Disinherit Your Children

April 18, 2010 /

Wondering how that could be possible?  Rania Combs, a Texas Wills and Trusts lawyer, has a great blog post entitled “Do-It-Yourself Estate Planning Mistake Disinherits Child.”  Take the time to read the article – it is a quick read and very well done.  The article is especially poignant, as I have had more cases recently involving children from previous marriages.  Rania’s post is just one of several ways that Do-It-Yourself planning can harm a family and just one of several ways that no planning (or inadequate planning) can hurt a mixed family.

There are only two things I will add to Rania’s excellent post:

  1. Not only does Jack’s new wife have complete control of Jack’s assets and no obligation to use them for Rose’s benefit, but what if the new wife gets remarried?  If she remarries and doesn’t do any planning herself (or does typical planning), there is a very real likelihood that Rose won’t get anything.  I’m not just conjecturing . . . that is based on circumstances I’ve seen.
  2. Not only could Jack have set aside all or a portion of his estate in trust for Rose’s benefit, he could have set the trust up to protect those assets from Rose’s creditors, judgments, estate taxes in her estate, and even her own divorce.

Have you had this happen to you or know someone who has?  I am interested in the story, if so.  Please share via comment on this post or emailing me via our Contact Us page.

And They Say Stuff Like This Never Happens! Why You Should Include Asset Protection in Your Planning

April 11, 2010 /

A recent conversation with a banker friend of mine confirmed the value of advanced estate planning techniques and how they apply in a practical, “real life” sense.

Her story was all to familiar – I hear about these situations on a regular basis.  During life, Husband and Wife had an estate plan drawn up.  At least one part of it was a joint trust with no asset protection  components.  They trusted each other, so they were not worried about the surviving spouse doing anything with the trust assets other than what they initially agreed between them.  When the first of them passes away, the surviving spouse will continue to have the power to revoke or amend the trust in any way.  Fast forward many years – wife has passed away and Husband has a new wife.  That’s where the bankers story gets interesting.  Husband revokes the trust, comes into the bank with new wife, and proceeds to put all the bank assets from the trust into a joint account with his new wife.

Now, do you think that is what his first wife would have wanted?  If they had a typical distribution plan, it would have been set up to continue for the surviving spouse (which it did) and then had it split equally among their children.  Well guess what?  It’s quite possible that the children will get nothing.  What is Husband passes away before his new wife?  His trust is revoked and the bank assets (which are substantial) are in joint accounts with his new wife.  If he dies first without anything changing, his new wife stands to get the vast majority of his assets.  Who knows what else he changed to benefit her . . . beneficiary on life insurance, retirement accounts, annuities, etc.

What could Husband and Wife had done to protect against this?  They could have set their estate plan up in a way that guaranteed that not only a large portion of the assets would have gone to their children (no matter what!), but those assets could have been protected from Husband’s creditors, lawsuits against him, and yes, from a future spouse and even divorce.

Don’t misunderstand me, I am a HUGE proponent of marriage and think Husband and Wife should have trusted each other like they did.  I don’t see this advanced planning as saying you don’t trust your spouse, I see it as making sure that you protect as much as possible of what Husband and Wife worked so hard to create together and ensuring that it continues to benefit their family and not the government or creditors.  And this protection becomes even more important the higher your exposure to creditors is . . . for example, high-risk businesses, doctors, lawyers, and other professionals.

This is something I cover with ALL of my clients.  And no matter who you work with, make sure they understand how this protection can be beneficial and – more importantly – how to do it right!

What do you think?  Please share your thoughts.  I always enjoy comments from my blog readers.