Friday, April 30, 2010

Take your's Good For You

Americans just do not like to discuss estate planning. Supposedly 7 out of 10 of us have no plan. Of the 3 who do, what are the chances that the plan is up to date? 

A friend of mine, Michael Stuart, just sent me this article in the NY Times, Estate Planning as Family Conversation, talking about talking. I wanted to share it with you as it paints the picture of what happens with no plan, and even how to open a conversation about one. 

When I think about the plans that I have helped clients create, many stories come to mind. One recurring theme is a senior couple who own some investments and real property, with one of their adult children serving full-time as a caretaker. Other kids are not too involved in things… and the caretaker daughter pretty much has her hands full with children of her own and helping out the folks. In this situation, the adult daughter has a full time job or two already… and no outside means of support. 

Many parents want to treat children "equally." But what do you do when there is only so much to go around, and the cost to one kid (the helper) is simply going to be too high for that to even remotely be fair? Parents must first plan for their care, then consider being "fair" rather than "equal" to those who follow. 

It's often the right thing to do… but without some conversation, and openness, it will likely have a huge cost in terms of relationships down the line. And ignoring this dynamic is unlikely to provide a better result. So start talking, it is a big first step to helping you with your estate planning today and well into the future.


Tuesday, April 13, 2010

Why is better than an attorney

A legal colleague of mine, Dennis Brislawn, wrote an interesting blog post about the use of compared with the services of an attorney, and I thought you might find his perspective interesting.
I recently had an opportunity to check out some LegalZoom documents.  One of my friends used the LegalZoom service to prepare some Wills for his kids.  They were simple trust planning documents.  Each spouse left the estate to the other, but if both were deceased, they had a Common Trust for all kids until they turned 21, then money would split into shares that each child would receive in equal installments at ages 24, 27, and 30.  These LegalZoom documents even had powers of attorney and all the trimmings.
The documents looked pretty "legal.”  My friend did the plan himself, in an hour or two on the weekend, and only spent a few hundred dollars.  He did this lieu of going to an attorney for budget reasons and scheduling difficulty with his activities.  At least he did something, which is far better than not covering this important issue – so kudos to my friend.
When he sought my opinion, my comments were that I thought the documents were good from a simplistic technical perspective.  I actually kind of liked them as they were well-written and clean.  How did that work compare to what I or one of my estate planning attorney colleagues would do?  They were simple, not elegant.  But the most important missing component is they did not demonstrate insight, personalization, or the awareness of core values important to my friends.  The document was clear for the kids after age 21, but there was no meaningful guidance into how a trust would be used by the guardians of children to raise them until age 21.  Guidelines create the comfort that their kids will become the adults their parents would be proud of.  What about asset protection for adult children to protect their inheritance against divorce or bankruptcy?  I think you get my point.
Result?  I was retained to do a comprehensive plan to address all the things that were not part of the simple LegalZoom plan. We also looked over their investments, retirement planning, insurance coverage, and the separate inheritances each was to get from their own grandparents and parents.  I reached out to my friend's advisers and got their help in relooking at all these things to make sure that they were properly handled too.
LegalZoom provides documents.  But I’m reminded by this experience that law is far more than the preparation of documents.  It is about listening, discerning, and identifying core values.  It is about understanding what can keep your clients awake at night.  It is about pulling together resources to resolve those concerns and to put a plan in place.  But, even more important, it is about working to keep that plan tuned up so that as things change, it changes.  Documents are simple.  Wisdom is harder to come by.
My experience is similar to this post by Dennis.  I help people with information that will lead to good decisions and workable plans.  The forms that I use are secondary part of my service. LegalZoom is better than doing nothing, and an attorney providing good advice offers more than just a set of forms. If you agree – or disagree – I’d welcome your comments. 

Friday, April 2, 2010

The Children get Stuck with the work

I wanted to share a story with you that a good friend of mine and associate recently shared with me about one of his clients. It was very applicable to what I see all the time.

"I had the incredible opportunity to attend my aunt’s birthday party and take this photo. It was indeed a happy occasion for all – especially when she invited everyone back for her 100th birthday party in 2011.

While enjoying the celebration and festivities, I was reminded of the sobering thought of all the financial and legal plans that her only daughter has been saddled with as her mother aged. As the children of aging parents, we never know if we will be buying a celebration balloon like this for their 99th birthday – and it is usually the least of our challenges as the years creep forward for a centenarian parent.

While attending her birthday party, my mind drifted to the many issues her only child has had to deal with for nearly 25 years. Getting to this 99th birthday has been a lot more work and worry for the daughter than for the birthday mother. The daughter has had to manage finances, coordinate moves, work with doctors, screen assisted living homes, and of course, work with the attorneys.

I was personally relieved, knowing I could attend the celebration, wish my aunt a “Happy Birthday”, and return home. My cousin, on the other hand, would be at the party to the very end. She would be cleaning up the leftover cake, policing the party room at the assisted living facility, etc. And she still has to deal with all the fiduciary responsibilities that continue long after the party has ended."

People deal with these types of real issues every day – most of which are neither easy nor pleasant. Working with attorneys and other professionals should be the least of their worries. After all, they have to start planning for the next big birthday party for their mom!