Tag: protection your family

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).

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.

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.

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.

Why Should I Care About Estate Planning?

June 3, 2010 / Michael

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.

Traveling Without an Estate Plan – Why Leaving the Stove On Is the Least of Your Worries

May 25, 2010 / Michael

Yep, it’s that time of year again . . . traveling season. Memorial Day weekend is coming up, the kids will soon be out of school, and the summer travel season will be in full force. No matter how well we plan, we always seem to forget something before leaving on vacation – or at least think we forgot something. What about you? Have you every worried that you left the stove on, forgot to put the garage door down (I always forget that one!), or didn’t lock the door to the house? I’m sure you have. Those are some of the common worries. So let me ask, have you ever worried about what would happen to your children if something happened to you?

Most parents haven’t thought about this, or at least never did anything to take care of it. Did you know that only about 1/3 of parents have named guardians for their children . . . ONLY 1/3?! And yet we consider them to be the most precious gift and most important part of our lives (and they are!). I encourage you to take it upon yourself to put an estate plan in place to make sure your kids are cared for by who YOU want in the way YOU want . . . BEFORE you go on vacation.

I frequently get calls to the office from parents who realize at the last minute that they need a plan in place – sometimes literally a day or two before leaving! Sadly, it’s often too late to put something in place that is even somewhat thought-out before they leave. It may go without saying – procrastination is the number one reason I see for families not having the needed legal documentation in place. I can’t count how many times I’ve counseled caring parents through making these important decisions, and hear “yeah, we’ve been thinking about it for years, but have always put off the step of doing something about it.”

Here are three critically important items to have in place before vacation:

Name guardians for your children and make sure it is legally documented – don’t let the court system decide who will care for your children. Make sure you plan for the long-term AND the short-term.
Have a power of attorney for health care and patient advocate designation in place so your family isn’t caught in a bitter conflict over your medical care
Have your finances in order so they aren’t lost to taxes or a lengthy court process

Make sure to take these important steps before YOU go on vacation. And make sure to work with an attorney that specializes/focuses on estate planning for families. If you have questions – ask! Give me a call, email me, or comment on this post so you can have your questions answered and have some added peace of mind before your next trip.

The Cheap, Online Will – A Real Life Example

May 11, 2010 / Michael

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 / Michael

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.

Be Careful Who You Pick As A Trustee

May 4, 2010 / Michael

Although statistics show that the number of people who have an estate plan is not increasing, I do see a larger portion of individuals and couples making the decision to have a trust-based estate plan. That is, an estate plan where a trust is the main document that controls how things are distributed when they pass away. One of, if not the, most important decisions you make with a trust-based plan is who will be the trustee and who will be the backup (“successor”) trustees. The trustee is the person/people/entity that makes sure the terms of the trust are followed. Depending on the trust’s design, the trustee may have a large amount of discretion on who receives money/property from the trust, how they receive it, and when they receive it. Yet, in many cases, the decision on who will be the trustees/successor trusties is made hastily, without much thought.

This can be a big mistake! If you have done your planning correctly and fully “funded” your trust (e.g., transferred assets to it), your trust will have most (if not all) of your assets. Considering that the trustee will make certain decisions relating to the trust, the choice should not be taken lightly. The trustee should be someone you trust (no pun intended . . . ok, yes, the pun was intended). However, don’t stop the inquiry there. It should also be someone who has sufficient financial management and administrative ability (or is wise enough to hire professionals to handle those tasks for them). And consider the option of splitting the trustee role among one or more people/entities. For example, you could have a “distribution trustee” who determines when to make distributions, and an “administrative trustee” who keeps track of all the accounting, tax, and other detailed financial matters.

I recently had a conversation with a great client. She shared with me that her father had a trust set up and properly “funded” (I say bravo to him, because not “funding” the trust is the single biggest mistake I see when reviewing estate plans). He named a local bank as the trustee for distribution and administrative purposes. He set out several scenarios in his trust about how he wanted to provide for his children (education, businesses, homes, etc.). One of the main assets in the trust was stock in a certain company. Long story short, the stock dropped significantly in value and the trustee (the bank) would not sell it. It believed the stock would come back and that to sell it at the depressed price would violate the bank’s duty as trustee. This all happened about the time this client was supposed to be getting a distribution to help with education. She never did get the distribution for education (or much else for that matter). The good part is that she did a great job on her own and is quite successful today.

I’m not saying you shouldn’t consider a bank or trust company as a trustee, I give the example to show how important it is to fully consider the various options for who the trustee is. Each situation is different. That is why you need to make sure your estate planning attorney takes a client-centered relationship approach to your planning . . . not a transactional approach.

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

April 18, 2010 / Michael

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:

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.
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 / Michael

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.

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