|
If there’s anything that we as attorneys have learned from the recession, it’s that we can’t assume that our clients will always be with us, just because we’ve done a good job for them in the past. Now more than ever, it’s important to remind ourselves that each of us is responsible for maintaining our clients, and that clients respond to us based on what’s happening now, not what happened a few months or years ago.
So, what does this mean in practical terms? Well, you have to stay in touch with your clients on a consistent basis, with relevant topics of interest to them. It’s important to give clients and prospective clients information that’s informative and entertaining. Some methods of communication that have worked for Academy Members have included:
- Newsletters
- Updates
- eAlerts
- Social Media presence
- Client appreciation events
- Introduction to new services
A good goal is to make meaningful, informative contact with your clients twelve times per year. Doing this and providing service that exceeds their expectations on a consistent basis will make your firm the first place they call when they need something or when a problem comes up that you can help them solve.
Staying at the top of their minds, and delivering when the time comes, is one way to cultivate lifelong relationships with clients.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
Few expected that American billionaires could die without federal taxation of their estates. However, that’s the situation we have in 2010. George Steinbrenner and other billionaires have died this year and, under current law, their estates owe no federal estate tax.
There have been several pieces of legislation which would reinstate the estate tax. Some would do so retroactively. But, would retroactive legislation pass constitutional muster?
In Untermyer v. Anderson, 276 U.S. 440 (1928), the Supreme Court found that it was an unconstitutional violation of substantive due process to levy the gift tax retroactively. The court in Untermyer was convinced of the unconstitutionality because of the inability to plan. In that case the taxpayer made a gift without knowledge of a gift tax. Perhaps they would not have made the gift if they had known it would have incurred a gift tax.
However, in U.S. v. Carlton, 512 U.S. 26 (1994), the Supreme Court upheld the retroactive modification of an estate tax deduction. It appears logical that a retroactive reinstatement of the estate tax similarly might be constitutional because people do not choose the timing of their own death (typically).
It may be unlikely that Congress will choose to go back and re-impose an estate tax for 2010.
But, would it be unfair for them to do so? What do you think? Should Congress re-impose an estate tax for 2010 retroactively?
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
At Legacy Safeguard, we routinely take calls from family members who have lost a loved one and they are trying to write an obituary for them. This can be a very difficult for family members to write, especially during the immediate aftermath of loss. Many times we hear, “there must be an easier way to do this.” No one wants to write their obituary in advance because it’s such a difficult thing to consider, but a great alternative is writing your Life Story for their family to help them with this at the time of need.
Your Life Story can be fun to write and it can also be a way to include your family to get some of their favorite memories and thoughts. Many times, writing a Life Story can encourage you more than you can ever imagine, because you’ll hear what you’ve meant to people and they will open up to you like never before. In addition, this can be a time for you to tell your family how much they mean to you. This is also an opportunity for you to share stories that they may have never known about your childhood and other parts of your life.
The best way to begin is to get started now. This is not something that you want to put off. Write down your ideas on paper and try to think about all of the most important events in your life. This can be about your childhood, your education, your wedding, children and grandchildren… Also, perhaps include your involvement in your place of worship and other organizations with which you are involved.
As estate planning attorneys, your clients trust you to help them make many hard decisions. They need your expertise in how to structure their estate and protect their life’s work. So, be the one that helps them think about writing their Life Story to lessen this burden on their family, but also to help them be remembered long after they’re gone. Their families will appreciate this more than you will ever know!
Bryan W. Adams is President & CEO of Premier Planning, LLC and Founder of Legacy Safeguard. Bryan is considered one of the nations’ leading experts on final expense planning, and he frequently speaks throughout the country about the importance of assisting clients to gain peace of mind through advanced funeral funding.
Bryan’s passion for helping families prepare for their final expenses came from being raised in the funeral business. His family still owns and operates several funeral homes, and he is constantly amazed at how unprepared families are when a death occurs. Bryan has worked tirelessly to help Americans plan for the inevitable and lessen the burden on their loved ones.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Road, Suite 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
If you’ve been reading this blog for any length of time, you know that technical proficiency alone is not enough to make you a success as an attorney. It may come as a surprise to you, though, that technical proficiency plus top-notch business skills aren’t necessarily enough to ensure your success, either. You can be a great lawyer, plus be on the ball as far as:
- Marketing
- Accounting
- Practice Management
- Computer competence
- Initial consultation success
- Dynamic public speaking
- Clear, concise writing
- Employee management
…and still not enjoy the dynamic and successful practice you dream of. Why? Because all the skills in the world won’t help you if you’re underlying “mapping” is working against you.
If you have self-limiting beliefs that you can’t do it or there’s something wrong; if you have a poor work ethic; if you don’t have the self-discipline necessary to what needs to be done to make your practice work, then all of your technical proficiency and skills will come to nothing.
No one starts out with all of these attributes. That’s why it’s also necessary to have a voracious appetite for learning and self-improvement. If you’re going to be truly successful, it helps to seek knowledge from all kinds of different sources; books, CD’s, seminars, the list goes on and on.
Finally, it goes without saying that it’s essential to maintain a healthy lifestyle including a balanced diet and exercise. There’s no point in putting all of this effort into creating a powerful and successful practice unless you’re healthy enough to enjoy the process and vibrant enough to revel in the result.
Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Road, Suite 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
As estate planning attorneys, we know how important trusts are for probate avoidance, tax minimization, and asset management. But, clients often do not give enough consideration to the identity of the trustee who is to follow in their footsteps.
Successor trustees are critical to managing the assets during periods of the client’s incapacity and at the client’s death. These successor trustees will make decisions regarding how the assets should be invested and whether they should be distributed and to whom. Successor trustees also make decisions regarding trust administration. As we all know, a trustee who is “difficult” can make everyone’s life miserable, including the estate planning attorney who is hired for the trust administration.
Clients often default to naming a family member to serve in that role. Sometimes that may be the best choice. However, that may not always be the best choice. Often, clients do not have family members with the ability to serve in that role. In some cases, it may be unfair to ask a family member to serve in that role. For example, a family member serving as trustee may have a hard time refusing to distribute assets to other members of the family who are beneficiaries—even if refusing a distribution is the right thing to do. An institutional trustee does not have to sit across from the brooding beneficiary at the Thanksgiving dinner table!
Sometimes, an independent third party is the right choice for successor trustee. Many years ago, the trust departments of banks were seen as the only choice. Now, there is a trend away from bank trust departments and towards independent trust firms, according to research by Tiburon Strategic Advisors in San Francisco. Banks control 40% of the market of personal trusts. However, independent trust companies and brokerage trust operations now dominate the market for revocable trusts, which represent approximately $4.5 trillion out of $6.8 trillion in personal trust assets.
Your client needs to be sure to name someone who is up to the task of filling his or her shoes as a successor trustee. Does the potential successor trustee have the financial experience to manage the assets in the client’s absence – or the prudence to hire a financial advisor who does? Do they have the fortitude to make difficult decisions regarding distributions to other beneficiaries?
Even if your client has an individual who is up to the task, they may want to consider naming an institutional trustee at the end of the line. Whether your client chooses a bank trust department, an independent trust firm, or a brokerage trust operation, an institutional trustee can provide a backstop for the trust. Your client will know that, if the savvy individuals they hoped would serve are unavailable, the trust will still be managed professionally to meet the client’s goals long after the client is gone.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
Death is a very real part of life, along with taxes. Yet, funerals are the only life cycle event most folks don’t want to plan in advance.
Despite the fact that humans have a 100 percent mortality rate, we don’t expect to die. If you don’t expect to die, you’re unlikely to preplan a funeral. And that leads to problems like family discord, higher costs, rote rituals devoid of meaning, and unnecessary stress added to grief.
Wedding planning gets way more attention than funeral planning, even though both events can conceivably cost the same, given a modest wedding and a traditional funeral. Yet, if the bride and groom planned their wedding the way most folks plan a funeral, they’d be scrambling to pull everything together in three days—talk about stress!
We are mortal. Our bodies eventually stop working. Many religions teach that the soul, the spirit that resides within our bodies as long as we breathe, lives forever. So, why fear death, and by extension, why fear funeral planning?
To talk about funeral planning, we would have to admit that this joy ride called life has an end. We’d have to look at how we’ve lived our lives, examine how we’ve acted and review what we’ve done with our time on Earth. We’d be forced to look at how we’ve treated others, and think about what others would say about us at our funerals. We’d need to take stock of our achievements and contributions to humanity. Perhaps we are afraid we’ll find ourselves lacking.
There are other reasons. Medical advances have saved so many lives so many times, it seems like death is optional. We don’t like the thought of losing the company of those we love. We avoid thinking or talking about death, perhaps for fear that its contemplation will precipitate the event. And many folks just don’t know what to do anymore when it comes to death.
Robert Fulghum, who wrote All I Really Need to Know I Learned in Kindergarten, also wrote a lovely book called From Beginning to End: The Rituals of Our Lives. Fulghum wrote, “For most of us, once we die, we are no longer in the care of our families and friends — strangers and institutions take over… Death is not in our school curriculum.”
He added, “Instead of a normal part of life, death is treated as an unexpected emergency, something that happens when the medical community fails. We always die ‘of something’ — as though if it weren’t for that disease or accident, we could have lived on. ‘Old age’ or ‘worn out’ or ‘life completed’ are concepts not found on death certificates or in obituaries. Death in our time means crisis.”
In fact, according to one hospice nurse I know, no one has died of old age since the 1950s. That’s when death certificates were changed to require listing a specific medical cause of death, such as a heart attack, dementia, or pneumonia.
We use euphemisms for death: passed on; kicked the bucket; gave up the ghost; checked out; left the building; keeled over; took the Big Bus; caught the last train; bought the farm; paid the ultimate price; pushing up daisies; knocking on the Pearly Gates; taking a dirt nap; and gone to the Great (whatever) in the Sky.
You, me, all humanity, we will all need to be disposed of when we die. If you don’t talk about what you want done with your lifeless body, you will leave your family and friends in a world of hurt if the Big Bus unexpectedly runs you over tomorrow and transports you to the Pearly Gates. Do everybody a favor and make some plans. It’s best to put your two cents in now, while you still can.
Just as talking about sex won’t make you pregnant, talking about funerals won’t make you dead–and your family will benefit from the conversation. Start a conversation today.
Gail Rubin is an event planner who speaks about funerals and memorial services. She gets the conversation going. She’s also the author of The Family Plot Blog (TheFamilyPlot.wordpress.com) and the forthcoming book, A Good Goodbye: Funeral Planning for Those Who Don’t Plan to Die (www.AGoodGoodbye.com). Starting on October 30, the 11th annual Create a Great Funeral Day, Rubin will launch the “30 Funerals in 30 Days Challenge,” designed to bring light to a dark subject and help families get end-of-life conversations started.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
It’s easy to make decisions in your firm based on what you think your clients want, or on what the other firms in your community are doing, but how do you know what your clients really want from your firm? The best way to find out is to ask them.
Here’s an exercise your firm can engage in: sit down with your staff and list out what you believe are your firm’s top ten competitive advantages. Then, ask your clients, either directly or in the form of a survey, what they think your firm’s top ten competitive advantages are. The differences may surprise you. They’re the “dangerous disparity,” and they’ll let you know whether or not you’re staying in sync with your client’s needs.
Periodically, you need to ask your clients to give your firm a checkup on the basics, like the level of customer service they’re receiving from employees; and whether the overall experience they’ve had with your firm falls below, meets, or exceeds their expectations. Clients won’t volunteer this information to you — you have to ask. And you’d be wise to… they may not be telling you how they feel about they’re firm, but they’re telling other people. On average, if a client has a good experience with your firm, they’ll let three other people know about it. If they have a bad experience, eleven other people are going to hear how horrible your firm is.
You can even take it a step further, and get some of your clients engaged in part of the decision–making process in your firm. It can be helpful to have a few trusted clients give you their thoughts on prospective programs or ideas you plan to implement. Their opinions and reactions can save your practice time and money because instead of engaging in trial and error by guessing what your clients want, you’re taking the simplest route… asking them.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
Samuel Goldwyn once said, “An oral contract is as good as the paper it’s written on.” But is this always the case? The truth is a legal document can be binding and effective even if it isn’t perfectly drafted and neatly printed up on expensive paper.
Would you believe a will can be valid if it’s handwritten on a big piece of wood? That’s what happened with the Last Will and Testament of Marilyn S. Rhodeback, of Johnstown, New Jersey. Ms. Rhodeback passed away earlier this year and her will, which was handwritten on a 14” by 14” piece of wood, was accepted as valid by the county probate court. Despite being presented in a highly original form, the will was in Ms. Rhodeback’s handwriting, and it met New Jersey’s requirements for a holographic will.
A holographic will is one that is fully handwritten by the testator. Not all jurisdictions accept holographic wills as valid, but of those that do, most require that:
- The will be signed by the testator
- There is proof that the testator actually wrote the will
- There is proof that the testator was mentally competent to write the will (and not under duress)
- And that will actually contain instructions distributing the testator’s property to his or her heirs
So, we know that holographic wills might be okay in some states, but what about Mr. Goldwyn’s statement about contracts? As long as all the elements are there, a contract can be written on a napkin or a scrap of paper – and, as long the subject matter is does not come under the requirements of the Statute of Frauds (such as real estate), a contract doesn’t have to be written at all.
In Texaco v. Pennzoil, Pennzoil bought Getty Oil in a handshake deal. Later, Texaco made a better offer and the company was sold to Texaco instead. Pennzoil filed suit on the theory of tortuous interference with contract. The Pennzoil – Getty oral contract was held to be valid, and Pennzoil won billions of dollars in damages.
While legal documents don’t necessarily have to be perfectly drawn up, signed, and labeled, it’s always best to remove doubt by doing things the “right” way. When it comes to preparing an estate plan, this means making a traditional will or trust, with the appropriate statutory requirements. It’s often best to notarize the document, even though that may not be required by the statute. A prudent estate planning attorney may even go beyond the statutory minimum requirements.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
A July 2010 survey by Thomson Reuters found that 57 percent of Americans have made their end-of-life care choices known. This is significantly more than in previous surveys. As you might expect, more people over the age of 65 have taken this step. In fact, nearly three-quarters of people over 65 have done so, as opposed to about a third of individuals under the age of 35. Among those who conveyed their end-of-life preferences, 87 percent chose informal communication with family, friends, or loved ones; 60 percent created a living will; and 50 percent employed a healthcare power of attorney. Typically, those who took formal steps received legal assistance in preparing their documents.
What conclusions can we draw from these numbers? On the one hand, it is reassuring to know that more than half of the Americans surveyed understand the importance of thinking about their preferences for care at the end of their lives and have chosen to express them. The efforts of estate planning attorneys, the National Healthcare Decisions Day initiative, and other educational programs to generate awareness about this important issue seem to be paying off.
Of course, another view is that there is still plenty of work to be done. Roughly 40 percent of Americans surveyed still have not expressed their end-of-life care choices. It is also important to note that while 87 percent of the respondents who made their wishes known did so informally, significantly fewer Americans utilized a living will, healthcare power of attorney, or other written directive. Clearly, opportunities exist for estate planning and elder law attorneys to provide individuals who are already aware of the importance of expressing end-of-life care choices with the formal legal documents they need to help ensure that their wishes are indeed carried out.
Finally, clients need to remember that making one’s wishes known, even through formal means, is no guarantee that they will be available to hospitals and loved ones when they are needed — especially in an emergency. Enrollment in a healthcare directive registry can be a good way to provide that assurance for clients.
Randi J. Siegel, MBA, is the President of DocuBank, the largest advance directive registry in the U.S., which ensures that the healthcare directives of its 175,000 enrollees are immediately available 24/7/365. Working with estate planning professionals since 1997, Randi frequently speaks at national estate planning conferences and has appeared on radio and television as an authority on registries. She is active in health policy pertaining to advance directives and serves as a Senior Fellow at the Jefferson School of Population Health in Philadelphia. Randi is an ongoing contributor to the Academy blog.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Road, Suite 240
San Diego, CA 92124
(858) 453-2128
www.aaepa.com
What would a permanent repeal of the estate tax do to the nonprofit sector? At first blush, it might not seem like estate taxation and philanthropy have much of a link. But there’s a strong connection.
Built in to the federal estate tax is a deduction for charitable bequests. Plus, charitable donations made during a person’s lifetime reduce that person’s taxable estate, also reducing the ultimate estate tax bill.
Study after study has found that, because of the way charitable contributions are treated within the framework of the estate tax, the tax actually increases the rate of charitable giving. The converse also appears to be true; a permanent repeal of the estate tax would reduce the rate of charitable giving.
According to a 2003 Brookings Institution report:
We find that estate tax repeal would reduce charitable bequests by between 22 and 37 percent, or between $3.6 billion and $6 billion per year. Previous studies are consistent with this finding, and also imply that repeal would reduce giving during life by a similar magnitude in dollar terms. To put this in perspective, a reduction in annual charitable donations in life and at death of $10 billion due to estate tax repeal implies that, each year, the nonprofit sector would lose resources equivalent to the total grants currently made by the largest 110 foundations in the United States.
http://www.brookings.edu/articles/2003/0617taxes_bakija.aspx
According to the National Center for Charitable Statistics, there are over 1 million public charities in the United States in additional to the countless private foundations and other charities. Without an estate tax, nonprofits would suffer a catastrophic blow.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Road, Suite 240
San Diego, CA 92124
858-453-2128
www.aaepa.com
|
