Heading to the Mall for a Gift and a … Will
An interesting concept that has already been established abroad is the ability to purchase testamentary documents at malls. Capitalizing on the concept and holiday traffic, during this past festive season, a couple of attorneys in Florida set up a legal services kiosk offering various legal services including \”basic estate planning.\” This set up involves dynamics that are both troubling and admirable. Estate planning is a complex practice, especially if you\’re approaching it from the perspective where your main focus is individuals with relatively large estates who want to protect their families but also seek to minimize taxes. Plus, considering the newer comprehensive approach, which incorporates using other financial professionals, estate planning is a relatively complex practice. This approach requires a more than basic familiarity with a number of disciplines because this approach uses a \”team\” of advisors, with the attorney at the top of a pyramid, with a financial planner and an independent CPA at the base. Finally, needless to say but I\’ll say it anyway – the tax laws are always changing. Still, it\’s doubtful that individuals with large estates who are mindful about the fees they pay will consider a kiosk; that\’s just not how they do business. On the other hand, a demographic does exist that needs testamentary documents to just protect family members in the event of a death or incapacity. The \”basic\” will and power of attorney would likely be applicable in this situation. Yet, I am troubled by lawyers who don\’t use these documents regularly and understand how they intersect with other law and regulations, especially powers of attorney and health care directives but offer them with a little counseling as a holiday special. If a gay or cohabiting couple approach these attorneys for wills or estate planning, there\’s no 15 minute answer. Finally, the middle class is struggling as it is; it cannot afford planning mistakes with the small amount of resources it has managed to maintain during the financial crisis. I absolutely agree that trying to help the middle class is admirable, but this setup may cause more harm than good. If the motive is helping the middle class, they could offer documents and a free review without the 15-minute time constraint? But the question then becomes do the attorneys have the requisite experience to know what to look for during the review.
Christmas in August & Legacy Planning for Families
My mom is one of the amazing sort who finishes holiday shopping in August. It always fascinated me, so of course I tried emulating her. The closest I got was finishing in October. So what does this have to do with wills, trusts, and estate planning? Well, 2 parallels exist between holiday shopping in August and legacy planning. The first is obvious – planning ahead for yourself and your family is fiscally prudent. The second parallel is a little less obvious because it’s less about shopping and more about August, the summer vacation season, and family harmony in particular. Many families go on holiday in the summer and while doing so often select a favorite family get-away spot. This spot ultimately becomes either a retirement or vacation property loved by all. As such, parents decide to keep the cherished corner of the universe in the family for the benefit of future generations. Typically, if there is more than one child, parents will leave the property to siblings to “share and share alike.” But what if the siblings can’t share alike? What if they are geographically spread out over the 4 corners and the property is closer to one than the others? What if they don’t want to share and share alike, i.e., they don’t want to perform the same responsibilities, such as property maintenance and financial maintenance? One answer would be to place the property in trust and draft terms delegating certain duties to the respective siblings. However, times change and people change, so what we might think our sons and daughters are good at today may not be what they become expert in tomorrow. Consequently, it might be more harmonious and advantageous if parents let their children decide how to manage the property and place the property in an entity with a structured agreement that supplements the trust. Instead of supplementing a trust, parents may also create a trust that owns such an entity, such as a Limited Liability Company (LLC), which in turn would own the property. As their lives and circumstances dictate, various family members could hold and move into member positions of the LLC, performing the duties directed by the LLC’s operating agreement, which is similar to a corporation’s by-laws. Forming an LLC and placing it inside of a trust requires legal assistance. Additionally, estate and income tax considerations should be addressed. However, by placing the property in an entity similar to an LLC, generations can continue to enjoy the favorite family getaway without the fear of an ensuing feud. Well…there may be a feud brewing, but at least it won\’t be about the one family member who always has to clean the pool, shovel the snow, or rake the leaves. Plan ahead and consider the abilities and desires unique to each kid – it\’s a great way to shop and a great way to create a legacy. *Author’s note: Yes, I know “plan ahead” is redundant, but it just sounds so darn good!
2 Lessons for Families on a Tight Budget
The Great Recession was enough to make most people try to pinch pennies where they can. However, the fact is that planning for the protection of your family costs money; it may not cost tens of thousands of dollars, but it still costs. Basic instruments that help protect the family are generally available for little or no charge at the courthouse – or on most state governments\’ websites. Still, to ensure that your instruments are correct, which means your family is appropriately protected, a legal consultation, even if brief, may be worth it. And for goodness sake don\’t try to prepare the instruments yourself. Document preparation services and low-cost collectives are in what is referred to as a \”race to the bottom.\” Allow me to illustrate this point: Once, I was in court for a hearing, so I decided to make it a 2-fer and get another client’s instruments filed with the court after my appearance. Waiting for the clerk, I overheard another clerk speaking with a woman who was trying to decide how to handle a guardianship matter in the least expensive, most efficient way she could. The woman told the clerk that she had the appropriate Power of Attorney (“POA”) and had possessed this document for a long time. The clerk then responded that the woman was “fine.” As a lawyer and, more importantly, as a human being, I find it necessary to step in when someone may be unwittingly jumping off a cliff. So I gently injected myself in the conversation just to inform these ladies that Illinois had changed both its powers of attorney a few months earlier. Eyes became saucers … oops. Lesson #1: Good advice isn’t typically free, BUT bad advice is typically very, very expensive. Even if an individual believes that they can’t afford a lawyer, instruments and the requisite advice for basic family protection is available for much less than the cost of really bad advice: Healthcare Power of Attorney, authorizes another individual to make decisions regarding your medical care and treatment while you are incapacitated. This POA is available in many places and is relatively self-explanatory. However, if you seek to have an attorney review your form, depending on your health, it should not take an unreasonable amount of time amounting to an unreasonable fee. Caution: If the form is driven by an online document preparation service, be sure an attorney licensed to practice in your state with a focus on estate planning performs the review. Laws change and automated document preparation services can’t modify their forms as quickly as an independent lawyer. HIPAA release forms, instruct medical institutions to release your medical records to the individual you designate on the form. The forms are universal because they’re governed by federal law and are available almost everywhere. They should supplement your Healthcare Power of Attorney. Property Power of Attorney, like a healthcare POA, authorizes an individual to step into your shoes and make decisions about your financial affairs. Also, like the healthcare POA, the document is readily available and should be reviewed by an appropriate attorney. Lesson #2: VIP documents, providing basic family protection, before death, cost a lot less than bad advice, even with proper attorney review. Today, most families are on tight budgets, but that shouldn\’t prevent you from being able to protect your family like families whose budgets are more flexible. However, to not protect properly…well…see Lesson #1.
Take 5: Planning for Parents with Jazz
Today, I was listening to one of my mother’s favorite tunes, “Lake Shore Drive,” by the late Art Porter, Jr. Enjoying the fact that she so loves this great sax melody reminded me of a client who recently came into my office. As we talked I was struck again by the fact that if it were not for the sacrifices made by parents, many of us would not have the good fortunes that we have today. Occasionally, individuals who understand this honour the sentiment by taking it to the next level with action. So listening today, I decided I’d pay it forward by providing 5 pieces of information you should have as you plan for your parents. The difficult conversation should, of course, have taken place. After that, you should determine the following: What the estimated amount of need-based government benefits your parents will receive by the time your plan is scheduled to start providing for you or them. This amount will determine how much you can provide for them if their assets plus their benefits is insufficient. Who are their primary physician(s), life insurance agents, and other key contact persons. If you don’t know them already, schedule time to have a small chat with each of these persons and put them on notice that your loved ones are protected not only by their services and products but also by you. Where your parents want to live in the event one or both become infirm and unable to tend to each others\’ basic needs, e.g., proper hygiene, nutritional maintenance, and medical treatments. Most folks say “my home,” unlike my mother, who sent me a link to her favourite cruise line. What their retirement and estate plans entail and if these plans reflect their current family and financial statuses. CAUTION! Sometimes parents don’t provide equally for siblings. This isn’t a smart parental move irrespective of the motivation, but it happens. So if you’re getting pushback, this may be the reason and may be a good time to try to avert a potential family feud. The nuances of how they handle finances. This may change over time but generally people are consistent in the way they manage their personal finances. For example, some folks are uncomfortable with less than $200 in their wallet; some withdraw cash from the bank at the beginning of the week that’s to last them until the next week; and some older individuals go a few times a week just because it gets them moving and, if it’s a local community branch, they get to see familiar faces. If you plan to provide for your parents and discuss these matters now, all parties will be more comfortable and less stressed-out when the time comes for you to supplement or provide them with income. Even if you aren’t sure that you’ll be able to assist your parents, this information is still valuable in case they just need your help.* Just like us, our elders generally relish their independence, so to lose some or all of that freedom can be kinda earth-shattering. If a loved one could make a possibly traumatizing situation for you less stressful, wouldn’t you want them to take the necessary steps to do so? I would. So take 5, play a little Art Porter – or The Stones – and sit down and listen, so you can pay it forward in the right key, when the time comes. As always, your thoughts and comments are welcome… *As seen in Crain\’s Chicago Business.
Team Estrogen Needs to Plan Now for Now … and Then
For my male readers, I’m shouting one out for the estrogen team, today. You\’re more than welcomed to stay and share this post with the hub of your life, but I’ll return to the neutral zone with the next post. Recently, I shared a number of articles via Twitter and LinkedIn about the supposed trepidation women have when it comes to estate planning, particularly managing their financial affairs. As a female lawyer in a practice area traditionally held by men, I must admit those articles ruffled my feathers. I contend that women are not afraid of talking about money or estate planning matters, we often just don’t think we have the time. The role of the female is still that of the family hub– mother, daughter, spouse, partner, sister. Being the family hub requires a great deal of time and effort. Add to that our occupational responsibilities and community obligations and it’s perfectly understandable why we focus on the “now” and not the “then.” Yes, we are fully aware of the fact that if we take some time now, we could make “then” better. However, as a single parent when: a presentation to a major client is due on Monday, the kids have to be taken to gymnastics and birthday parties and Sunday school, Mom needs help with her new ottoman, Sis wants a review of the web site of your annual “sisterhood vacation” hotel, as chair of the silent auction committee you have to complete the donations list by Friday night, and you still have to exercise, cook, and pick up the cleaning (housekeeper not in the budget), “converting my 401(k) into …” doesn’t really make it to the top of the list. Next, is the fact that we know we’re the hub and the emotional gravity accompanying that realization. I don’t know too many women who readily give thought to when they won’t be around to see their grandchildren, nieces’ weddings, or best friend’s daughter’s college graduation. It is a very painful and counterintuitive thought for women. Fear has little to do with it. We simply love our families and friends and cannot fathom not being there for them. Nevertheless, Ladies, as painful, counterintuitive, and time consuming as it may be, we owe it to our families and ourselves to sacrifice a manicure, to miss a committee meeting, to reschedule a conference call, to say a prayer and let Sis choose the hotel, so we can take care of “now” and “then” now. The list of reasons for doing this is not exhaustive and are compelling: Your retirement savings may be dwindling unnecessarily; Your widowed father living a few states away may have a new BFF with less than charitable thoughts about Dad’s annuity; An in-state college may not afford your son the best educational opportunity for his mechanical engineering career; You might be able to withdraw income now from grandma’s IRA (progressive grandma!); Your current income may be beneficial for a retirement vehicle that may not be as readily available when your income rises past a certain point; You may want to go on sabbatical but, who’s going to mind the store, literally; Instead of a place where Mom will be bored silly playing checkers, you may want to send her cruising 6 months a year; and You want your partner to be able to visit you immediately after major surgery. Minding our retirement and estate matters now actually makes us, the family hub, stronger. If you want, I’ll take notes at your next committee meeting, so you can meet with a reputable CFP.