Go to Walmart for Bananas, Not Estate Planning

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Estate Planning, 91024Did you know that the best-selling item at Walmart is bananas? It’s true, and has been for several years. So the next time you need a great price on your favorite yellow fruit, go ahead and make a trip to Walmart.

But steer clear of the world’s largest retailer when you need a will or other estate planning documents.

While not available in the U.S. (yet), Walmart just started selling wills for $99 in several Canadian locations. You can also get powers of attorney at the boutique law shop called Axess Law, set up in Walmart. And in my opinion, that’s not just bananas, it’s nuts too.

Creating an estate plan is something you do to leave a legacy of care and love for the people who matter to you the most. Working with an attorney who understands your goals and wishes for your family, and can articulate those in a well-crafted estate plan, is a much better alternative than relying on a one-stop shopping experience, be it at Walmart or through online legal websites with standard forms that can’t begin to know what you truly want and deserve for your loved ones.

Having the caring guidance of a personal family attorney will ensure your estate plan takes advantage of the ever-changing state and federal laws as well as reduces the potential for family feuds.

If you’re the parent of minor children, your attorney should help you create a comprehensive Kids Protection Plan® that ensures the well-being and care of your children; without one, a judge will make guardianship and other critical decision for you (and your kids could even be taken from your home temporarily).

Even if you don’t have minor or dependent children, you have stuff that will have to be handled after you are gone and a $99 will is likely only going to make matters worse for the people left to clean up the mess.

Laws vary by state, which is another good reason to have a personal relationship with a lawyer you trust. The probate process can be lengthy and arduous; your attorney can guide you around it and help your family stay out of Court, saving time, money and stress.

Finally, many life circumstances – remarriage, divorce, new children – impact your estate plan, so be sure you review it annually and keep it updated when things change. Having trusted lawyer who knows you and your family makes it much easier to keep your plan on track, so it will always be just what your family needs, when they need it.

If you would like more information about creating or updating your estate plan, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

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7 Steps to Creating an Estate Plan That Keeps Your Family Out of Court

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Estate Planning 91024Many people fail to create an estate plan because they don’t truly understand what their family will go through without a plan in place. Creating an estate plan during your lifetime is far less complicated than what your family will deal with after you are gone, if you don’t.

1. Create a Trust. When most people think of preparing for the end of life, they think of writing a Will, but having a Will without a Trust is fast track to put your family in Probate Court after you are gone. Instead, to keep your family out of the Courthouse, you’ll want to set up a Trust and title all of your assets to be owned by that Trust. While it might feel like a lot of effort, it will save your family a LOT of trouble after you are gone.

2. Designate beneficiaries. Designating beneficiaries for your retirement accounts and insurance policies is critical because these assets do not pass through your Will or Trust. Filling out beneficiary designation forms for each of your accounts will ensure these assets pass to the people you want without Court involvement. Be sure to review your beneficiary designations periodically to ensure they align with your current circumstances. Hot tip: never name minor children as beneficiaries of your retirement account or life insurance policies AND if you have more than $150,000 in a retirement account, consider a special trust called a Retirement Trust to ensure the most beneficial tax treatment for your loved ones.

3. Avoid estate taxes. Most of us will not have to worry about estate taxes since the federal estate and gift tax exemption is $5.34 million ($10.68 million for married couples) in 2014 and indexed every year for inflation. However, if you are married and wish to take advantage of portability – where spouses are entitled to each other’s unused exemption – the surviving spouse must file the required paperwork to claim the exemption.

4. Leave a letter of instruction. Not everything you may wish to pass on to your heirs – like instructions for your funeral – should be put in your will or Trust. Leaving a letter of instruction with your family or attorney can ensure your final wishes are respected. And take it one step further with a Family Legacy CD or DVD in which you record your values, insights, stories and experiences for your loved ones to refer back to for generations to come. We provide this service at no additional charge for our clients because we know this is one of the things families value the most and is least often handled.

5. Sign a durable power of attorney. Estate planning is not just about death, but also ensuring your family can handle things in the event you become incapacitated. Signing a durable power of attorney that designates someone to handle your financial affairs will save time, money and Court hassles for your family. In fact, not having this one simple document in place could end up costing your family tens of thousands of dollars.

6. Create an Advance Healthcare Directive. This document designates a decision maker of your choosing to make sure your wishes are followed when it comes to the medical care you want – or do not want – to receive when you are incapacitated or near death. You will also need to sign a HIPAA release form so your medical records can be released to your health care agent enabling your doctors to discuss your medical care with that person.

7. Organize your paperwork and digital files. Since many of us live our lives online these days, make sure your executor has access to all your digital information, including website addresses and the log-in information for those sites. Put all your important paperwork – deeds, insurance policies, bank and brokerage statements, etc. – in one file and let your executor know where it is.

Bonus tip: If you have minor children at home (or adult children with special needs), don’t rely on naming guardians in your Will alone. Create a comprehensive Kids Protection Plan to ensure your children’s care is covered not just for the long-term, but for the short term as well and no one you don’t want raising your kids ever has a chance to take control.

Contact us about scheduling a Family Estate Planning Session so we can sit down and talk about designing a plan that fits the needs of you and your family.

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The Wealth Creation Trust: A Gift That Keeps On Giving

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Asset Protection 91024The perfect gift for your child or grandchild on the occasion of their birth, Bar or Bat Mitzvah, Sweet 16 or Quinceañera cannot be found in any store. Instead, the hopes and wishes you have for your child’s (or grandchild’s) future can best be expressed with a gift of security, resources and a foundation of love – the establishment of a wealth creation trust.

When a new child is welcomed into the family or a child turns 13 , 16, graduates from college or has another milestone event, it is not uncommon for grandparents or other family members to want to give that child a monetary gift.

In most cases, a check written to the parents, or perhaps to the child, and put into a custodial account at the bank. The problems with this type of gifting are several:

1. Often, the parents cash the check, commingle the funds into the family accounts, and even though intentions are good, the child never gets to see the benefit (you’d be surprised how often this happens);

2. The money is put into a custodial account, the child accesses the account at 18 (or perhaps 21) and uses it to buy a car, fund a backpacking trip, or even buy a house; but the decision about how to utilize the money is made without thought or foresight for the future and oftentimes the money is squandered;

3. The money is used to pay for college, counting against the child for purposes of financial aid, effectively squandering the money;

4. The money is used by the child after he or she is married, commingled with the assets of a spouse and lost in a divorce, squandered.

But, there is a far better way, which is good for your family members who want to make gifts, good for you as the parents of your child, good for your child, and great for the world.

Establish a Wealth Creation Trust for your child (or grandchild) as a birthday (or birth) gift and let everyone in your family know that all gifts for the child should be made out to the Trustee of the [Name of Child} Wealth Creation Trust.

Then, when your child gets to be an age specified in the Trust, he or she can step into the role of Co-Trustee, learning how to operate the Trust and best utilize the funds in the Trust. He or she will be trained on the best types of investments for the Trust (my recommendation is first and foremost self-care, well-being programs and entrepreneurial training for the child, and then one or more entrepreneurial ventures the child is involved in) which have the possibility of doing a lot of good in the world and earning a healthy return on investment in the form of appreciation and purposeful, aligned work by the child.

Your child will learn the purpose of the Trust (to encourage the creation of wealth from one generation to the next, rather than the squandering or wasting of assets); how to protect it (keep the investments in the name of the Trust, regardless of how funds are used, so always title investments properly and sign on behalf of the Trust); and how to create more wealth in the future using the Trust assets.

Now, the gift you created when your child was just born, or achieved a specific life milestone becomes not just a vehicle of financial security, but education and impact for a lifetime and beyond.

Gifts up to $14,000 per year (in 2014) per person can be made into such a Trust for your child without the need to file a gift tax return.

If you would like to learn more about how to establish a wealth creation trust to secure the financial future of your children, grandchildren and beyond while encouraging and educating them to create more wealth in the world (rather than squandering what you’ve worked so hard to create), contact my office for a Family Wealth Planning Session.

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Vacations Are the Perfect Time for Families to Talk About Estate Planning

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Estate Planning 91024If you are like most Americans, you will probably be spending at least some of your vacation time this summer with older family members. While there are few perfect times to talk with parents about their estate plan, the relaxed times you spend together on vacation can be one of them.

Here are some tips on how to conduct this critical conversation:

Find a good place to start. One of the best ways to ease your parents into this type of discussion is to bring up your own planning. Tell your parents you were looking into estate planning and wondered if they had already executed a plan of their own. Sometimes you can use current events to good effect – there are lots of recent stories about celebrities or others who neglected to plan and whose families suffered the dire consequences. See my recent blog posts about Jerry Orbach, Philip Seymour Hoffman, and Paul Walker for examples.

Take it easy. If you feel your parents may need some help with organizing their financial lives, be reassuring rather than applying pressure. Let them know your goal is to make sure their financial independence is kept intact for as long as possible. Take things one step at a time, such as extending an offer to help them use online bill pay or assist them with organizing their information at tax time.

Respect boundaries. Many parents feel uncomfortable discussing their finances with their children. If you face this obstacle, let your parents know that you at least need to know where to find their important documents when it becomes necessary, but that you aren’t attempting to control them in anyway. You simply want to help and make things as easy as possible for you and your siblings when something does happen.

Sometimes initiating a conversation with parents about estate planning can be easier with the help of a trusted professional. During a Family Estate Planning Session we can guide the conversation and help you and your family take control of their affairs. Call our office today at to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family.

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Why DIY Estate Planning is a Bad Idea For the People You Love

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family estate plan 91024America is a nation of do-it-yourselfers, but building a deck and creating a legally valid estate plan are two entirely different things – and a less-than-perfect deck won’t devastate your family’s financial future or the relationships among the people you care about most.

The prevalence of online legal services has led many people to believe they can create legal documents cheaply and that those documents will be just as effective as if they had visited an estate planning attorney. Here is why that is wrong:

No legal advice – these sites are little more than document mills churning out the same generic forms over and over. They are not attorneys and cannot advise or help you avoid mistakes. Plus, who will be there for your family when something happens to you if you’ve used an online document drafting service?

Think your family doesn’t need an advisor to support them when you are gone? Think again.

Consider this: Erica’s father was killed in a motorcycle accident. Dad didn’t leave much behind, but he did leave an estate plan prepared by a trusted family attorney. Had the family attorney not been there for Erica and her brother, they would have taken what dad did leave and drowned their sorrows in a European backpacking trip. Thanks to this family attorney, though, Erica and her brother now have a healthy trust fund set up for them for life with the proceeds of a successful wrongful death case.

Leaving it to the people you love to make solid, strategic decisions after you’re gone is a big mistake.

One size doesn’t fit all – your family is different from everyone else’s family. Just like every state has different inheritance laws, every family has different situations. An online form will not help you protect a special needs beneficiary, or protect a child’s inheritance from creditors or a future nasty divorce. An online form cannot tell you how to protect assets from taxes or help you achieve your goals.

And, an online form cannot keep your family out of conflict during a time of grief. Even if you don’t have a lot of assets to leave behind, whatever you do have will be subject to distribution among the people you care most about. Some of the biggest disagreements we’ve seen after death aren’t about the money, but about the little things – and those little things aren’t going to be dealt with well in form documents.

Save now, pay later – you may think you are saving money by using an online service to create your will or trust, but it is impossible to make a fair comparison since the services provided are entirely different.

An estate planning attorney creates a comprehensive plan tailored to your individual needs in a legal document that will stand up in court, and advises you on ways to cut taxes and save for retirement and long-term care. No online service does that.

In addition, your trusted advisor is going to be there for your family when you cannot be. The people you love will need someone to turn to after you are gone. Do you want them to be stuck figuring out who that should be during their time of grief? Or do you want to leave behind the gift of having taken care of things well during your lifetime, and a trusted advisor to hold their hand when you no longer can?

Furthermore, your loved ones may have to pay a much steeper price to clean up the mess caused by a “cheap” plan (in money, time, and emotional energy). You can spare them all that by making sure your plan is done right.

We invite you to take advantage of our specialized legal services for families with a Family Estate Planning Session. Call our office today to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family.

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Law and Disorder: The Jerry Orbach Estate Battle

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Wills and Trusts 91024Jerry Orbach, who starred as Detective Lennie Briscoe in the popular “Law and Order” television series, died a decade ago, but a battle is brewing over his Chase bank account, according to a recent story in the New York Post.

The Chase bank account in dispute belongs to Orbach’s Mingoya Productions company, and is currently under the control of the actor’s former accountant, Patricia M. Black. Orbach added Black as a signatory to the company’s account a year before he died in 2004.

Black also served as executor of the estate of Orbach’s wife Elaine, who inherited his entire estate and who died in 2009. After Elaine died, her sister, Rita Hubbard, replaced Black as executor. Hubbard contacted Chase to inform them of the change in executor and request that Black be cut off from access to the account.

Chase says that Black has not responded to its many phone calls and letters, and is unwilling to turn the account over to Hubbard because it is unsure who the rightful owner of the account is since it has no proof that Elaine was ever a co-owner of Mingoya Productions.

Hubbard’s attorney says that Elaine’s estate is the sole owner of Mingoya Productions, and is therefore the rightful owner of the account.

A lawsuit has been filed in Manhattan to resolve the dispute.

This is the unfortunate effect of not having your estate planning set up properly. Many, many years after your death, your loved ones could still be dealing with the fall out.

Unlike many lawyers, we have specific procedures for ensuring your family doesn’t get stuck dealing with the Court when something happens to you.

If you would like more information about getting your affairs in order and handled well, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

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Give While You Live to Avoid a Family Feud

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Legacy Planning 91024A recent article in the New York Post about brothers battling over a painting from their uncle’s estate serves as a reminder of the importance of designating a specific beneficiary for your personal property, either through a will or by gifting while you are still alive.

The brotherly brawl came about after noted Manhattan interior designer David Barrett died and left his two nephews – Richard and Alan Barrett — “equal shares” in his $5.6 million estate. The estate included a $45,000 piece of art that the brothers flipped a coin over to determine who would get the painting.

Richard lost the coin flip – and then flipped out, filing a lawsuit to gain ownership of the painting, which held up payment to the two estate executors and his brother.

The lesson here is obvious: simply splitting an estate without detailed bequests can, and often does, lead to litigation.

The simple solution: take a complete inventory of your personal property, and then designate a recipient for each asset.

Make these designations via your will, or better yet, give them away while you are still living so there is no question as to who you intend to inherit your prized possessions.

Alternatively, consider taking pictures of each item of personal property and writing the name of designees to receive each item on the back of the image. Reference the images in your will.

And if you are a parent, your children are probably what you value most. You can protect them by putting in place a comprehensive Kids Protection Plan® to provide for their long-term as well as short-term care, and by establishing a trust to fund their care if you are no longer available to provide for them. While you don’t “own” your children, of course, you do owe them the duty of ensuring they are protected and provided for if anything happens to you.

If you would like more information about establishing a Kids Protection Plan, providing for your prized personal possessions, or creating or updating an estate plan, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Estate Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 626.355.4000 today and mention this article.

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What’s Changed In Your Life?

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Estate Planning 91024Estate planning is not a “set it and forget it” kind of thing. Your family dynamics change, your assets change, the laws change — and if your plan doesn’t change, too, your family gets caught holding the bag. The people you love most end up bearing the brunt of your failure to act.

Conducting a proper review of your estate plan will help identify the potential need to update your plan because of:

Life transitions: Have any babies been born, loved ones died, beneficiaries gotten married or divorced? If so, you must revisit your plan.

Changes in the law: Changes in federal and state tax laws may require updates to your healthcare and financial powers of attorney. State regulations can also be revised to open up new wealth planning strategies that should be a part of your estate plan.

Changes in assets: Has your net worth gone up or down? Have you invested in any new assets such as a businesses or real estate? Have you opened new bank accounts, retirement accounts, insurance policies, or anything similar? If so, your plan needs to be revisited. And the spreadsheet of assets you have for your family (you DO have one, right?) needs updating.

Funding of assets and beneficiary designations: One of the most common mistakes people make is not properly completing the transfer of assets into a trust within their estate plan. Another common error is having beneficiary designations that are inconsistent with the distribution language in the estate plan. We recommend a review of those matters at annually.

Remember, if you do not review your plan and update it regularly, it’s your family who will have to deal with the consequences.

If you have not had your estate plan reviewed within the last three years (or if you have not created a plan at all) we really should talk. Call my office today. We normally charge $950 for an Estate Plan Checkup but if you are one of the first two callers to mention this article, we’ll waive that fee. Call 626.355.4000 today and mention this article.

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Another Actor’s Estate Plan Screwed Up By His Lawyer

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Estate Planning, 91024If you read my blog post last month, titled 5 Fast & Furious Estate Planning Lessons from Paul Walker’s Estate you know I don’t like it when estate planning attorneys fail to take care of their clients. Now, Oscar-winning actor Philip Seymour Hoffman’s recently filed will provides another cautionary tale for all of us when it comes to estate planning mistakes.

Here are four things Hoffman’s lawyer could have – and should have – done differently:

Create a Revocable Living Trust. Hoffman was a public figure who valued his privacy. Yet by creating a will instead of a revocable living trust, he let the world in on his private life. We now all know that his son will inherit everything at age 30 and we’ll also know the total size of his estate when it’s inventoried and filed with the Court, as it must be. A will is public record, so every detail is available to anyone interested enough to look it up. A revocable living trust would have allowed him to keep his private wishes private and his son’s inheritance his son’s business, instead of everybody else’s.

Update your plan. Hoffman created his will in 2004 but never updated it, so his two youngest daughters are not mentioned or provided for in the will. His estate has been valued at $35 million, and his executor is his long-time companion who is also the mother of their three children. After born children are provided for by law, but Hoffman lost out on the opportunity to specifically direct their interests.

Cover your assets. While Hoffman did create a trust for his son Cooper, naming Cooper’s mother as sole trustee, that trust will dissolve once Cooper turns 30. And all assets distribute to Cooper outright at that time. Instead, Hoffman could have created a Lifetime Asset Protection Trust that would have kept Cooper’s inheritance safe from divorce, creditors, lawsuits and bankruptcy forever PLUS provided incentives to Cooper to grow the assets of the trust rather than squander them.

Use tax-saving strategies in your estate plan. Since Hoffman was not married to his long-time companion, there will be a monster sized estate tax bill to pay, both state and federal. The use of other tax-advantaged estate planning strategies like an Irrevocable Life Insurance Trust (ILIT) would have preserved assets and resulted in much more money going to Hoffman’s family and much less to the US Government.

To put the proper protections in place for your family, contact our office to schedule a time for us to sit down and talk. We normally charge $750 for a Family Estate Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 626.355.4000 today and mention this article.

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How Living Wills Became a Way of Life in One American Town

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End of life Decisions 91024With just over 50,000 residents, La Crosse, WI is similar to most other small towns in America – but one thing makes La Crosse stand out: 96% of La Crosse residents who have died had a living will (called an advance health care directive in California) in place. Nationally, the percentage of American adults with some form of advance medical directive, or living will, is only about 30%.

Actually, there are two things that make La Crosse stand out: the town also has lower healthcare costs than any other place in the U.S. And these two things – a high percentage of residents with advance directives and lower healthcare costs — are inextricably linked.

According to a recent NPR story, all this came about because of one man: Dr. Bud Hammes, Medical Humanities Director at Gundersen Hospital in La Crosse. Dr.Hammes often found himself sitting with families of terminally ill patients, trying to figure out what to do next. He said the conversations were excruciating: “Did mom ever say anything to you?” “Do you know what dad wants?” He said that the moral distress of the families was palpable.

Dr. Hammes knew these scenarios could all easily be avoided, since most patients were usually sick for years. So he started training nurses to ask patients early on, if they wanted to sign an advance directive, and over the years planning for death has become a way of life in La Crosse.

And the lower healthcare costs? Dr. Hammes said the reduction in spending was a complete accident; simply a byproduct of letting people make their own choices. He said that when you let patients choose and direct their own care, they often make a much less expensive choice.

You can listen to the entire NPR story here:

NPR: Living Wills are the Talk of The Town in La Crosse, Wis.

Making end of life plans is one of the simplest and most comforting things you can do for your family. To make things as easy as possible for your loved ones, contact our office to schedule a time for us to sit down and talk. We normally charge $750 for a Family Estate Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 626.355.4000 today and mention this article.

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