Avoidable Estate Planning Mistakes

Call me biased, but I think every functioning adult should have an estate plan. However, just throwing together an estate plan without thinking it through can result in more problems than solutions. Below is a blog I wrote about some of the most common estate planning mistakes that far too many people make (and can be avoided):

Big Estate Planning Mistakes Many People Make (But Can Easily Be Avoided)

The moral of the story? Take the time to sit down with an estate planning attorney to properly draft your estate plan.

Gen X Needs to Step Up When It Comes to Financial Planning

A recent study by the Insured Reitrement Institute found that over 75 percent of individuals categorized as “Generation X” (i.e. people with birth dates from the early 1960s to the early 1980s) do not consult with a financial advisor to help plan for retirement. Furthermore, 65 percent of people in Generation X who make $75,000 or more in income, do not have a financial advisor.

These are disturbing numbers, especially since we have data indicating the benefits of working with a financial advisor. The study found that, for Gen Xers working with a financial advisor, 23% had $200,000 or more saved for retirement, compared with 12% among those not working with a financial advisor.

To learn more, check out my full article on this issue here:
http://insightlaw.net/bobbys-blog/generation-x-missing-the-financial-boat-by-not-working-with-an-advisor

Mythbuster - You Still Own the Assets in a Revocable Trust

Some people have the mistaken belief that if they set up a revocable trust and place assets in that trust, you can't touch those assets going forward. This is simply not true. One of the biggest benefits of a revocable trust is that you have just as much control – if not more – when you create a revocable trust and transfer assets to the trust.

To learn more, check out my full-length article on this topic:

Bobby’s Estate Planning Mythbuster: Access to Assets Held in a Revocable Trust

Estate Planning Disasters of the Rich and Famous

Many people think that if someone has a bunch of money or is famous, they have all of their financial affairs in order. They have an organized, well-structured estate plan and their loved ones will certainly be taken care of. Unfortunately, this is a complete misconception. The sad fact is that many wealthy individuals and movie stars fail to take the time to meet with an estate planning attorney to establish an organized, detailed estate plan. The result is an estate planning fiasco that costs the estate millions of dollars or winds up in court. I recently wrote a blog highlighting just a few estate planning nightmares. Check it out here:

Title: Famous People and Estate Planning Disasters
http://insightlaw.net/bobbys-blog/famous-people-and-estate-planning-disasters

Community Bankers

From a business owner's perspective, I am becoming more and more fond of community banks.  I actually had dinner with my bank's president last night and I felt like I was talking to one of my friends.  For so long, I was using bigger regional or national banks and I really don't know why. They always made me fell like I a number.  I would cringe anytime I needed some banking information or god forbid a loan.  Every time I called PNC, I would be directed into a 10 minute minimum phone directory chain with endless pin numbers and passwords.  All this time spent just to hear the computer generated voice say I need to jump through another hoop. I want a banker who knows me and a place where a human being picks up the phone when I call. I am selfish in that I hope my community bank stays a secret so that I can keep getting this great service and more importantly great relationship. Unfortunately for me, I don't think it will stay a secret long because word will get around that the team at Main Street bank is committed to being responsive to their clients. If my business is ever in a bind or if I need clarification on a banking policy I know I have someone who I can call who at least knows who I am and will give me a straight answer.  I believe I have spent far too much time with the wrong banks.


I recently heard the following statement, "if you are going into business, you need to align yourself with a good accountant, lawyer and banker."  I think most business people overlook the importance of a trusted banker.  I identified with the statement because I sometimes feel the same way when explaining why it is makes all the sense in the world to do your estate plan with an attorney you like and who wants to create an ongoing relationship with you.  If you don't get along with the attorney, how do you expect your family to get along with him/her? The family and the attorney are ultimately going to have to work with one another at some point (unless you plan on living forever in that case it does not apply to you).  For those who want to risk all their wealth and love for their family on a downloadable form, good luck. You get what you pay for as I see instances everyday of poorly thought out plans with little to no follow-through by either side.  When I heard the statement quoted above from the CEO of my community bank, it occurred to me how many business people miss the simple point that a relationship with the right banker is just as important to your business as working with the right accountant or attorney.  I missed the point for many years so it should not be a surprise if it doesn't automatically click for others.

As a business owner, the lesson I learned is that I should not expect everyone to automatically get my business' mission of  'creating plans that work'.  Sometimes I would wonder what I was saying wrong because I felt that people did not perceive the value we are providing. How we are so different from most of the competition because we simply have a maintenance plan with our clients to keep their plan updated with changes in the law and family.  As the CEO of my company, I just need  keep our message clear and our team focused on our clients.  Eventually it will click for other people just like it clicked for me.  At least that is what i am hoping. . .

This blog is not intended to be used as legal, tax or financial advice.   

Why I love being an estate planner

Driving into work today I was thinking about the rest of my November leading into Thanksgiving and I had to smile.  Work doesn't feel like work anymore.  First, I was thinking about ways I could boost my team's morale and their bottom line by tying customer retention with a law firm retirement plan.  I believe my law firm's future (InSight Law) depends on treating our existing clients like one of my own family.  I want my team to understand that their future is tied to our clients' ongoing satisfaction. 

Second, I thought about the future of InSight Law.  I feel lucky enough to have the type of relationship with my clients that they can tell me anything.  We set the expectation early that we are in this together and I believe this mutual respect makes the difference.  My value to the client is that the more information I know about the family and specific situation, the more legal options I will be able to identify for the family.  Why I love being an estate planner is that I get to work with people in a setting where I can be creative in my art while also applying sound legal techniques.

For example, one of my client's is trying to decide whether he should pursue 2012 end of year estate tax planning given that the laws are potentially scheduled to change for the worse (i.e. higher taxes on the horizon).    He also has the fundamental concern for his family's future after he is gone.  He told me that he tried to dedicate at least some portion of his day just trying to improve his family's future. Whether it is simply making a phone call to a relative, or putting together a family photo album, planning for retirement, or working on his estate plan.  To me it clear, that this man loves his family dearly and has made it a priority in his life.  I knew I had to capture this love and non-material wealth as well or I would really be doing the family a disservice. So I interviewed him on camera and asked him about his family and his life.  I asked him about the good times, the bad times and what life lessons he would like to share, etc.  He opened himself up to who he was so that his family had a lasting memory of who he was and what his life was about.  He told me that the video meant more to him than his whole financial estate.  After he said that to me, I got that feeling of clear direction in my practice.  We connected who he was to his financial wealth through a video that showed his love for family.  Simple and elegant while taking full advantage of the laws of Virginia as well as federal laws.  We built a solid bridge for generations of his family to come and build on.

It is human nature that we need to grow and evolve (technology, medicine, law, etc.).  Unfortunately, in my profession it is the norm where the death of a family member causes a negative impact on the family's future.  Of course the death of a family member will cause grieving and there will be a time of mourning.  I believe it is my job to help the family through this transition by guiding them through the legal issues while letting them know your hopes for them.  It truly is the ultimate gift when done right.

I want to do this type of planning for all of my clients.  Unfortunately, only a minority of my clients elect to do the Legacy Interview(TM).  At least once a year, I give my clients the opportunity to sign up for an interview, however, it has not been well received to this point.  As a business owner, it is frustrating to see my clients not taking advantage of a service that I believe would make a big difference to their plan in the form of a positive impact on their family's future well being.  However, this is also why I love being an estate planner.  It is facing these types of challenges that makes my life rewarding.  Hopefully in a few years, it will be the norm where my clients all of have a Legacy Video interview in their file along with their legal documents.


Client statement references above were made with full permission of the Client.  This blog is not intended to serve as legal, financial or tax advice.  Seek your own qualified professional for specific questions. 

A System That Produces Positive Results

For the past 10 years, I have gone to Lake Placid, New York to play in a Lacrosse tournament.  The first 6 years I went to the tournament I would play on random local teams and our teams would never go very far in the tournament.  I always has a good time but there was always something missing (besides the fact that we never won the tournament). 

 However, the past 4 years my college teammates decided to put together a team ( I went to Syracuse University).  The alumni from Cornell had been doing this for years and they consistently won the tournament.  The first 2 years we played together we lost in the championship game to the Cornell Alumni (known as the "Rusty Red"). However, the last 2 years we have won the tournament (our team name is the "Burnt Orange").

I want to share some of my personal reflections about the tournament since I have made this change of playing with my former teammates.  Since I am now an estate planning attorney, I believe I can draw some connections between what I have experienced at the peaks of Lake Placid and my estate planning practice.

First and foremost, I think the culture and tradition of playing at Syracuse University adds immediate value to the quality of the team and the quality of the experience at Lake Placid.  Since we are familiar with the Syracuse system as well as each other's playing styles we have a much stronger team than most and the positive results are evident in the final scores of the games.

I believe a similar connection can be drawn to estate plans that are prepared for my clients. We use a consistent process and system to develop our clients' estate plans. Everyone essentially goes through the same steps (although there are many different variations depending on a client's personal situation, the process each client goes through is the same).  Since the clients' are familiar with the process they feel comfortable that they actually understand their plan.  Just like playing under the same system giving our team an edge on the playing field, our lawfirm's consistent system gives our clients' confidence in creating a strong plan for their family.  I think a lot of the negative experience with estate planning comes from the clients' lack of understanding of how their plan works.

The second important connection is that having a relationship with my teammates gives me an edge on the playing field since I know what to do and where my teammates are supposed to be at different stages of the game.  Similarly, I believe having a relationship with my clients will give our firm (and our clients) an edge in creating a successful plans with our clients.  I believe that the members of my law firm and my clients are teammates together with one common goal - creating a plan that works for our clients and their families.  Since the success of my clients' plan will occur at some date in the future then I think it is essential that we maintain a good relationship with our clients. That is why we communicate with our clients at least annually to make sure we are up to date with any changes in the family.  In turn, we provide our clients with updates in the law. If we maintain a good relationship with our clients over a number of years, then I believe the chances of a successful plan goes up dramatically.

I believe that the biggest difference in the way InSight Law works with their clients compared to the traditional estate planning process is that we commit to a formal maintenance and education program for our clients at the start of the planning process. Our clients all know to expect that the most important step in our process is the ongoing relationship that our law firm team has with your family.

These are my reflections about this years' Lake Placid lacrosse tournament. Go Cuse!

Social Security Survivor Benefits in a Divorce Situation

In a divorce situation where one spouse dies, there could potentially be 2 survivor benefits paid. It is important to designate who you want to manage the money for your minor children if you do not want your ex-spouse to be that person.

Where there are  children under the age of 16, the surviving spouse AND the kids would be entitled to separate benefits. If the spouse is under age 60 then he/she would be entitled to 75% and the kids would be entitled to 75%. A “Representative Payee” could be appointed for the kids that  could be a different person than the surviving spouse.  The Representative Payee can receive and manage the funds being paid to kids. The potential Representative Payee would have to apply to social security to become appointed as the official representative payee and they would also have to go to a face to face meeting at the local social security office to become approved. The surviving spouse could also apply. The ultimate decision rests with the social security office. Therefore, I would want a clear provision stating my client’s intent if this situation were to occur somewhere in his will or trust

Inherited IRA Required Minimum Distribution Rules

Given that most people these days own an IRA, I often receive questions about these IRAs work after the death of the IRA owner. Here are some basic rules:


1)  If you inherit an IRA from your spouse then you have a lot more options then if you didn't. In most instances (under current tax laws) if you inherit an IRA from your spouse, you will probably roll your spouse's IRA into your IRA (however this may not always be the best route, it just depends on your cirumstances).

2)  If you inherit an IRA from anyone other than your spouse then you normally need to start taking money out of that IRA by December 31 of the year after the person died. Think about it. IRAs grow tax deferred while you are alive and taxes aren't paid until you take the money out. If someone dies with money in their IRA the IRS stands to lose all the taxes they could have collected if the participant took the money out before they died.  The term "Required Minimum Distributions" ("RMD") is the IRS's way of telling you that they want to tax you annually on at least a minimum amount of the IRA you have inherited (i.e. by December 31 of the year after death).

 How much you need to take out depends on different factors (was the beneficiary designation form correctly filled out at the financial company? even if they didn't fill it out properly you still have options after the death of the participant to try to fix it. If the forms were correctly completed then you probably can take distributions based on your life expectancy which is usually the best option. The worst case scenario is that you have to take it all out in 5 years which could cause a serious tax hit).

3)  Whose tax rate do you use? Whoever receives the distribution puts it on their tax returns therefore you use their rate.

4)  If you have inherited multiple IRAs from the same decedent, you may choose to combine life-expectancy distributions for those inherited IRAs and withdraw the total from one inherited IRA.However, you may not combine your RMD's from your own traditional IRA with your inherited IRA. Basically, if you have 3 traditional IRAs where you are the owner and 3 IRAs that you inherited you can take all of your own IRA required minimum distributions from 1 of your own IRA accounts (if you so choose) and all of your Inherited IRA distributions from 1 of the IRA inherited accounts (again if you so choose). You can't take your distributions from just 1 of the 6 accounts. Clear as mud? Don't you love the IRS?

All of the above is not intended to be used as tax advice or constitute legal advice. The above are a description of general issues I see in my practice and is for informational purposes only. Consult your lawyer or CPA if you want specific advice regarding your situation.

Another day another chance to get it right.

I am writing this blog at 8:18 am in the morning and already today was a good day. Like most other days, driving into work I thought about how this day would look like. Unlike most days, I received a jolt of energy in my heart and no. . .it wasn't from my morning coffee. It came about when I started thinking about the interview I was going to have with one of my clients and how much that interview means to me. I am doing a video legacy project for one of my clients. The purpose of the interview is to record his views on topics ranging from where his grandparents grew up to his favorite movie. I want to ask him what he admires most about his kids and major turning points in his life. I am not sure if my client knows it or not but this interview today is why I started my practice. You see, I never had the opportunity to interview my dad about these topics and there are no audio or video recordings that focused on his reflections about his life. My dad was a humble man but humility has nothing to do with it. I wish someone would have taken the time to interview my dad so I could understand his views now that I am a 40 year old man. I want to give this opportunity to as many people as I can because this gift is priceless. It is why I do what I do. Yes, today is a good day…

Why Does the Name of a Trust Matter?

As an estate planning attorney, a large percentage of my practice is devoted to creating trusts for my clients.  Normally, the name of the trust would be the name of the client along with the date of the trust.  For example, my trust reads the "Robert A. Feisee Living  Trust dated January 1, 2002".  I think that we are missing an opportunity in passing on more than just a sterile legal document when we pick the name of our trust.

A colleague of mine, John Warnick, Esq., is a visionary in this field who has really made me rethink the way I work with my clients. I went to a conference a few months ago where he explained that naming your trust is a great way to pass on your legacy and values to your beneficiaries.  It makes perfect sense and I am hoping to implement this technique with my clients this year and hopefully long into the future.

Here is my first draft of my new trust name:

"The Feisee Possibility Trust -   This name has been chosen to reflect our family’s heritage and belief that anything is possible if you put your mind to it and you believe in yourself.  My mother and father escaped from Iran and came to this country not knowing the language and less than a $100 to their name. They built successful medical practices through hard work and a belief in themselves.  I was a young boy who had a dream to play in the lacrosse national championship game and I did it.  I had a clear vision of my dream, I practiced every day and I believed in myself. Now I own my own law practice using the same tools that were taught to me by my parents.  Don’t ever lose your faith in yourself or your family.  You can do whatever you put your mind to. The possibilities are endless. . ."

 I think the new name of my trust has a better ring to it than my previous name. I am going to go with that one for now until I think of something better.  How about your trust? Do you like the name?  Do you think you can put more of YOU into that name?

Capturing and Transferring What Matters Most?

A few days ago was the 1 year anniversary of my father's death.  He battled alzehimer's for over 10 years.  This weekend I reflected on some of my most favorite memories of my father and I realized all those memories are in my head.  They are not written down or recorded anywhere.  My father had a great smile that could light up a room and he told great stories about how he struggled growing up.  How I wish I could hear his voice just one more time.  The problem is, no ever thought about recording his stories. There was always an excuse (we'll do it later, we don't have a recorder, i'm busy).  Those excuses pale in comparison to the powerful impact those stories would have had on me a few days ago.

By chance, I had a conversation with my mother a few months ago where she revealed another of my dad's stories that he never told me. He was a young doctor working in a small "village" hospital.  He was in charge of one of the sick wards and he was tired of the lack of funding for the patients' care.  The rooms were unsanitary and there was an inadequate inventory of medicine. He became very frustrated with the Hospital Administration's rejection of his repeated requests for better conditions for his patients.

My mom then looked at me in the eye, and with a smile she said. . . "Do you know what your father did for his patients? He went on a Hunger Strike! That's right, he refused to eat until his patients were given adequate care.  He almost lost his job, his medical license, basically his whole career over this incident. He was willing to sacrifice it all for what he believed in.  Well, it caused such a commotion at the hospital that the higher ups looked at the situation more closely and they upgraded the beds as well as the medicine."

Then my mom looked at me again. . . ."Bobby, what are you willing to do for your clients? Will you be as dedicated as your father?"

I had tears in my eyes when my mom told me that story. It gave me more strength and energy than any amount of money or material assets could give me. This lesson is priceless and it is what matters most about my dad...his integrity.

The scary thing is that I may have never heard that story unless my mom and I happen to stumble on that conversation.  These stories are priceless on the one hand, but on the other hand, they are fragile and fleeting if not preserved.  One of my missions for the people I work with is to capture, preserve and protect their stories as a guardian.  These stories are what life is about. They are real and it is what brings families together during difficult times.

Don't wait until it is too late. Capture your stories now while you can remember and enjoy them!

Estate Planning for Your Children

Often times, a young couple will call my office when they have had their first child. They tell me "We have a baby now, we need to get our Wills done." When I meet with the parents, I find myself routinely answering the same questions and I see that they have relatively no idea on the issues they should be addressing. When they ask for a simple will, I ask the couple if it is their intention that the COURTS supervise how their child is raised. In some instances, this might be a good thing for the family. In my experience, any time the government is involved with my personal affairs, I find that it increases the expense and time in whatever I do. For example, if the parents have life insurance (which they almost always do), I ask them who they have designated as the contingent beneficiary of the life insurance. Usually the primary beneficiary of a life insurance policy is the other spouse. However, what if something happens to both spouses? Isn't that really why this couple decided to call me. To address the legal issues if something were to happen to both of them. Who would get the insurance money if both spouses were to pass away? Sopme couples say they didn't think about that. Others say they have listed their minor child. Either way, that life insurance money is going to be paid into Court and the Court will decide how the money should be used. I don't like that result. That is why I counsel my clients to look at their options. One option would be to keep the Courts out of this situation and pay the money to a trust where YOU as the parents can decide how the money should be used NOT the Court. Why do you want the money that is supposed to be used for your children to be used instead for court filings, attorneys fees, etc.?   

Once we remove the Courts from the equation, the next issue we need to address is how you would like the money to be spent on your child. Issues like education (private school, public, college, advanced degrees, etc), clothing, extra curricular activities. What if the child gets in with the wrong crowd and is now doing drugs. How should this be handled? (tough love, counseling, rehab?).

These issues any others need to be addressed if you want to do the planning right. In my experience, a simple Will does not address any of these issues.

Creditors Might Have Access to Inheritors’ IRA

           A Florida appeals court recently ruled that creditors had access to inherited IRAs previously thought to protected.  The court held that when the owner of an IRA dies, the instrument that passes to the beneficiaries is converted into a completely separate account which is then subject to applicable taxes. The law varies by state, and even the Florida ruling could be subject to further action by the state legislature. Given the uncertainty, the most prudent approach is to get proper counseling when designating your IRA beneficiaries and exploring all your options such as designating a trust as the beneficiary of an IRA.

            The appellant in Robertson v. Deeb contested an order denying his claim of exemption from an inherited IRA. Upon his father’s death, Robertson could choose to convert the inherited IRA into one of two accounts. Since a single owner did not continually maintain the account, the Florida court ruled that statutory protections that ordinarily protect IRAs from creditors did not apply.

            Creditor and tax exemptions for inherited IRAs are still unsettled issues in law. Although the Florida court’s rationale has been adopted by other states (Minnesota, Texas), the court’s ruling has generated controversy that may result in further legislative action in Florida and beyond. At the moment there are over $4 trillion dollars held in IRAs, so related asset protection issues are certain to be common in the near future. 

           
          One potential planning option worth exploring is to designate a trust as the beneficiary of the IRA. Although the IRA still converts to a new account type, the creditor protection intrinsic to the trust extends to the inherited IRA. The trust can then be structured so that a named individual has access to the trust without the risk of creditor exposure.

Its Never Too Late for A Priceless Conversation

My Aunt Pari has been diagnosed with Stage 4 lung cancer and I have been agonizing over how I can help her. Pari was the person who always took care of me as a child. She was basically my nanny.  When I was sick she was there to comfort me and give me soup.  When I couldn't sleep she would tell me stories about my father and how he worked so hard for us.  Pari does not have much in the way of material wealth, however, she has a treasure chest of stories about how my father and mother met and how they overcame great odds to create a true love story.

As an estate planning attorney, I felt like I was not taking care of my family properly. My dad passed away earlier this year after a 10 year battle with Alzheimer's.  My dad had a lot of great stories of his own about how he grew up in  a small 3rd world village and the challenging situations he often found himself in. I regret that I was never able to record any of his stories before he got sick or how his infectious laugh could light up a room. Once again, I see myself faced with losing an opportunity to capture our family's powerful story from those who built it from the ground up during the 1950's-1970's.

My aunt has been so sick that I felt it was very difficult for me to try and interview her now about our family history and I did not want to further burden her.  There was a limiting assumption in my mind that said "its too late to burden your aunt with telling the family stories."  I just learned that this assumption was absolutely WRONG.

On the advice of my colleagues from the National Network of Estate Planning Attorneys and the Sunbridge Legacy Network, I decided to push through my fears and I visited my Aunt yesterday. I have been visiting her a lot as of late, but I would just come to her home as a comfort to her. This time I decided to ask her some questions.  As she laid on her bed, I laid down next to her with a recorder and asked her to tell me the story again how she would go to the train station to pick up my mom back in the 1960s. My mom would come and visit my dad who lived near the Caspian Sea and it was a big event when she would come to visit. My aunt's eyes lit up and she began describing the train station in great detail and how dedicated my mom was to travel such a long way to see my father. She also told me how the house was so full of life when my older sister was born. She described how my mom had to work almost immediately after my sister was born so they could make ends meet.  She said those were difficult times but those were also the best of times. My aunt smiled when she described how everyone would make a fuss over my sister. She then described how life was like when my older brother was born and the trouble he would get himself into (she laughed). Then she talked about me and how happy my parents were when I was born. She gave me insights that gave me tingles that I will treasure forever.

This recording is a Priceless Conversation that no inheritance can match. I hope to have many more and I hope my aunt has the strength to tell them. I wish I had not waited so long to ask her about these stories.

LESSON:  I believe most of my clients believe they can "put these conversations off til later" but they are wrong. The best time to have these conversations is NOW. Talk about these memories while they are still clear in your mind so you can enjoy reflecting on them. It doesn't matter if you are 30 years old or 80 years old. These stories are fragile if not properly cared for and are likely to be lost forever. At least I have one story I will share with my kids that they will hear directly from the source. I can't put a dollar figure on this memory and it is a gift from my aunt that I will never forget. 

Wealth Reception

How long does the average recepient of an inheritance wait before they buy a new car?  Just 19 days.
This fact provided by the New Car Dealer Association provides great insight into how parents leave their wealth to their kids.  I read a book by called the Midas Touch this weekend and I was moved by this statement:

"Character is not improved by the sudden receipt of money. It is revealed by it. Just 19 days before they buy a new car. Do you think thats what parents want their kids to spend their hard earned wealth on? How long does it take for the average inheritance to be spent? About 18 months.


Why do you think this is the case? Probably because the kids are not prepared to deal with the inheritance and the estate planner and financial advisors have not bothered to focus on this idea of wealth reception. We are all so focused on the taxes and transferring the assets from point A to B (which is important and should be part of any good estate plan), but we normally ignore the children and the kids relationships between each other and with money.

Can You Spare a Few Moments of Your Time?

I ran into a sad scenario recently. A gentleman had a heart attack and had no estate planning documents. His family has to hire an attorney to prove to the government that they can take care of their father and to receive money he is entitled to for his care. While they are waiting for this court order they have to pay another attorney to act as their father's attorney. They also get to pay for the doctor who must submit his evidence to the court. Is this the type of mess you want your family dealing with during this troubling time? An ounce of prevention can go a long way in this situation. I see so many families going to great measures to take care of their families (going to the right schools, buying the latest gadgets, meeting the right friends, finding the right babysitter, etc) but they can't take a few hours to make life easier for their loved ones if something major happens. Wonder why?

One Question Can Make All The Difference. . .(Continued)

If you recall from my last post, we were right at the point of determining whether Bill Sample's estate plan worked. Bill, a father of 2 with lovely wife Mary, suffered a heart attack at the ripe old age of 45. How well did his estate plan work?
After 2 weeks in the hospital, Bill returns home to his family. However, he is coming home in a wheel chair and cannot feed, bathe or clothe himself. The family's income has now been cut in half with increased expenses.  Mary can't afford the mortgage and puts the house on the market at a low price since she can't wait out the bad market. Mary gets behind on the bills, is facing bankruptcy, and the kids are going through an emotional roller coaster. How well did Bill's plan work? Did the documents address or explore any of these issues?

Let's take it one step further and say that Bill died. He has an insurance policy worth $1million that gets paid directly to his wife. A year later the wife is driving down a local highway, distracted by the kids, and kills someone in a car accident. All the insurance proceeds are subject to her creditors and they are indeed taken. Could Bill have structured his plan so that the death benefits would have been protected from Mary's creditors? Yes. What if she were to get remarried. Could Bill's kids get disinherited unintentionally? Yes.

Moral of the Story:
I think it is a critical point to understand WHEN you know whether an estate plan works. Normally, you hire an attorney in Year 1 and receive some documents that you don't understand and have no way of knowing that they will work. You get very little counseling. You then hide the documents somewhere like it is some mystery to be solved sometime in the future by your family in Year 10, 20, etc. Then, you go on with your life thinking you have done the right thing for your family. The problem is that those documents aren't put into action immediately and there are no instant results for you to judge the value of what you paid for.


Be careful about the questions you ask when shopping for an estate planning attorney. Are you shopping for the lowest price documents or sound advice that will save your family from a lot of heart ache? Your call.

One Question Can Make All The Difference. . .

As an estate planning attorney, I find it odd that I rarely get the following question from the general public: "what are my estate planning options?" You would think that would be a basic question from people who are in the market for estate planning services. That just is not the case. However, I do get a lot of people asking me the following question: "how much do you charge for a will or trust?"

There is a quote I have heard that goes, "the power is in the question." I really believe this quote can be valuable when you are doing your due diligence in hiring an estate planning attorney. The latter question, "how much do you charge for a will or trust?" has the potential to steer your planning to disaster. While the former question, "what are my planning options?" has the potential to steer your planning towards securing your family's future and protecting your loved ones.

Why the dramatic difference in just one simple question? I will use a real life example to illustrate what I mean.

Bill Sample (i am protecting the names of the innocent), decides it is time to go shopping for a will because his college roommate died of a heart attack at age 45. He thinks to himself, if it could happen to Rob, it can happen to me and I better get the right documents in place. He does some basic research over the internet and sees that he can download a will off the internet for $79. He thinks about and decides to call an attorney instead as there may be some stuff that I may miss. He calls a local attorney and says: "My wife and I are interested in doing our wills, how much do you charge for each will?"
Attorney: I charge $250 for each simple will and an extra $150 for a power of attorney and medical directive form, when would you like to come in?
They schedule an appointment for next week, the couple comes in, the attorney obtains their basic information in an hour (name, address, kids names, approximate size of estate, executor's name) and collects the money for the documents. A few weeks later, Bill and Mary Sample pick up the Wills, put them in their safe deposit box, and now Bill feels much better that he has done his "estate planning." He feels has done the right thing for his family and now they can move on with their lives.

10 years later, Bill unexpectedly suffers a stroke. It is a terrible event that shocks the whole family. Even though this is a tragic event, at least Bill had the foresight to do estate planning for himself and his family. At least they have all the legal and financial issues covered, right?

I will continue with this story in my next post. . .

Syracuse Lacrosse. . . A System That Works

A few weeks ago, I went to my college lacrosse team 20 year reunion of our 1990 national championship team. I played for syracuse university lacrosse and it had been about 10 years since I visited the university. What I found interesting is that the lacrosse program is as successful now as it was when I attended the university. Since I left syracuse, they have won 7 more national titles. How did this program become so successful? What are they doing well that other programs should learn from? I think you can learn a lot from successful organizations, especially about the types of habits they develop.

My return flight from syracuse was delayed and I decided to attend a lacrosse practice to see how the practices have changed since I attended over 20 years ago. What surprised me is that the core or base practice drills the team was running were essentially the same drills I had been taught 20 years ago. We had a specific system and routine that we followed every day and I saw the kids doing the same thing that we used to do. The system produced the consistent results and it was the focus on the system and the mastery of the system that produced these positive and different results. I guess the old adage "if it ain't broke don't fix it" really is true.

I thought about my law practice and about how are firm has developed since we started focusing on our process and our system. Traditionally, law firms do not really have an estate planning process or an identifiable system. Most attorneys are focused on producing documents and their system is basically their computer. When we changed our focus on producing a plan that works for the client WHEN they actually need it to work (disability/death) it is supposed to work, then our system changed. We needed to develop a process to title assets properly, commuicate updates to the clients on a routine basis, educating the family, etc. When we were able to clearly see our goal in this manner, our system started to take form and our team (the law firm) starting focusing on fine tuning our process so that we were producing tremendous results for our clients.
For example, every year we hold a "What to Do" workshop for our clients and their families. What to do when a loved one becomes disabled and What to do when a loved one passes away. We have found that clients and their families don't know the first two things to do when a significant event like disability or death occurs. We initially designed this workshop to address these issues. However, through the years clients have given us consistent feedback that it would be good to have a "Helper's Handbook" that the clients and family members could have in their possession and reference when needed. So our law firm team developed this "Helper's Handbook" and continued to refine it to meet our clients' expectations. So every year, our team practices and focuses on making our " What to Do" programs better and how we can make our handbook better. Focusing our efforts on making the clients life easier helps clarify the law firm goals and brings the team together to create successful plans.

My point is that I belive estate planning is a process and is not just a transaction or document. Some attorneys are more "word processing" oriented and our focused on the documents as the end result, while other attorneys are focused on counselling and the actual plan results (did the plan work smoothly or was it painful, long, expensive process?). We find that we get consistent positive results when we focus our systems on counselling the family. The way we "practice" and refine our system is by constantly looking at our process and asking the following questions:
1) What are we doing well in our planning process?
2) What do we need to improve on or what aren't we doing so well?
3) What aren't we doing that we should be doing?

By objectively looking at our practice and mastering our systems (just like the lacrosse team working on the same drills every day until they master them) we provide consistent results for the clients. Maybe this is a simple point, however, I find that this point is often overlooked.

This blog is not intended to provide tax, legal, financial advice. It is simply a forum to express my opinions of issues that I see on a daily basis.