We all know how hesitant people can be to confront the idea of estate planning in the first place. Maybe it’s the idea of confronting their own mortality… maybe they’re superstitious about tempting fate… maybe it’s just not fun. Whatever the reason, it can be hard to get clients into the office in the first place.

And once they’re in, and the first set of documents is signed, they seem to have a false sense of security. People seem to be under the delusion that estate planning is a one-time proposition, and that once the plan is in place, they can breathe a sigh of relief and go on about the rest of their lives.

So, even when they’re invited back to do an estate plan review, they don’t always see the need. We ask if anything has changed, and they’re quick to tell us no.

Of course, we know that nothing could be farther from the truth. Circumstances are constantly changing, both within our clients’ personal lives and in our society as a whole, which have an impact – and can derail even the best laid plans.

The problem is that our clients aren’t aware of all the factors that go into an effective estate plan, so they don’t know what might necessitate a change to their plan. They often don’t have enough of a knowledge base to effectively answer the question, “what’s changed?”  And they’re not supposed to know… unless they’re estate planning attorneys themselves. That’s our job, not theirs.

So, how do we bridge the gap between our technical knowledge and good intentions, and our clients’ desire for an effective estate plan and lack of awareness that they may need to come see us?

I think it all goes back to the relationship we build with our clients. They need to know that we care about them and their families, and we’re watching out for them. If we’re taking an interest in the developments in their lives, and staying in contact with them on a regular, consistent basis, they’ll be more inclined to let us in on developments that we can help them with. And we’ll have an open line of communication to educate them about shifts in the law, or a new and better strategy that might work for them.

What’s your approach? How does your firm get clients to update their estate plans?

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

So many of us make the mistake of thinking we’re in the “Estate Planning Legal Business.” While we practice estate law, defining ourselves in this way is a mistake, because our actions flow from the way we define ourselves.

When you’re in the “Estate Planning Legal Business,” you tend to judge your practice and your worth solely by how legally competent you are. Therefore, you spend the bulk of your time staying up on the law, attending CLE classes and reading the latest IRS opinions. You educate your clients in fine detail on all the best ways to set up an estate and keep all your client communications focused on technical estate and tax matters.

While it is necessary and good to maintain technical proficiency, spending all – or even most – of your working hours focused on this means that you are not recognizing the true nature of your legal practice. The truth is we’re not in the “Estate Planning Legal Business.” We’re actually in the Communication, Information, and Relationship Business.

Did you know that one of the biggest misconceptions held by lawyers is that our clients know whether our technical legal skills are excellent or merely average? While it’s important to maintain and improve our skills, non-lawyers assume we’re all about the same skills-wise. What clients are looking for is a relationship with someone they know and trust.

How much of your practice is focused on creating lasting relationships with your clients? On communicating regularly with them? What will bring in new clients and keep existing clients loyal is not your technical expertise, but things like being greeted by name when they step into your office, or knowing that you care enough to ask about their family, or a thousand other personal touches that only you and your staff could add to their experience with your firm.

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com

Imagine you’re in the final stages of terminal cancer. You’ve reached a point where treatment is no longer effective. Where would you want to spend your final days or weeks?

Many people would prefer to be at home, close to family and friends, while receiving palliative or hospice care. But, depending on where you live, this might be an unlikely scenario. If you live in Manhattan, for example, your last days may well be spent in the hospital, undergoing aggressive medical procedures.

The Dartmouth Atlas Project has released a new report that brings to light the stark differences in end-of-life care that cancer patients are likely to receive, based on where they live. The report looked at the records of Medicare patients with aggressive or metastatic cancer who died between 2003 and 2007. Highlights include:

• Nationwide, 29% of patients died in a hospital.

• Patients who were treated in Manhattan were the most likely to die in a hospital. This is where nearly half of Manhattan patients passed away.

• In Mason City, Iowa, on the other hand, only 7% of patients died in a hospital.

• In Huntsville, Alabama, more than 40% of the patients studied were admitted to the Intensive Care Unit during their last month of life – and they stayed there up to 25 times longer than patients in other regions.

Where you live is also a determining factor in the type of treatment you receive, with chemotherapy and other aggressive treatments like intubation and repeated resuscitations often figuring prominently in the end-of-life experiences of patients in places like Manhattan and Los Angeles.

So, what can we – and our clients – do if we want to stay clear of hospitals and invasive medical procedures during the final stages of a terminal illness? We have to be proactive.

First, be sure there’s an advance directive in place, making it clear to doctors that their focus needs to be on quality of life, rather than on prolonging life at all costs. Medical staff may not bring up the availability of hospice or palliative care, so if you prefer this option, your preference needs to be in writing.

It’s also important to have a healthcare power of attorney, with a carefully-chosen agent. The agent needs to have a clear understanding of the client’s expectations and preferences when it comes to end-of-life care. And, he or she needs to be the type of person who can communicate well with medical personnel, and make a stand for the client’s preferences over hospital protocol, if the need arises.

As estate planning attorneys, we deal with many complicated issues. But, sometimes the most important things we do for our clients are the most basic: Advance Directives and Health Care Powers of Attorney.

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

Every year around Thanksgiving I think about the wishbone tradition. My dad always made a big deal about it, and my sister and I would always try to be the one who got the long end of the wishbone. That was always a special time for us and even though we had no idea what the tradition was all about, it was fun to have our mom and dad laugh as we tried to strategically break the wishbone in two.

We always thought that this was just our family tradition, but did you know that the tradition of breaking a wishbone dates back for over 2,400 years? During that era, the Etruscan people believed that fowl could predict the future. Each day the hen’s squawking would announce that she was laying an egg and the dawning of a new day was then broadcast by the early morning crowing of the rooster. The Etruscan people also believed that the way chicken’s selected the grain they ate was prophetic. They drew a circle in the dirt and divided it into twenty wedges; each represented a letter in the Etruscan alphabet. A piece of grain would be placed in each wedge. As the hen ate, a scribe would list the order of the letters the hen pecked and the letter order would be used by the high priest to answer questions. If a chicken was killed, the collarbone was thought to be sacred, thus it was not touched and was left to dry in the sun. The people gathered around to hold the unbroken bone and made a wish in hopes of it bringing them good luck. The “wishbone tradition” was derived from this early practice.

The Roman’s embraced many of the Etruscan customs. The people of Rome began fighting over the unbroken bones of chickens because they wanted good fortune. It was said that the phases, “I need a lucky break,” or “I never get a break,” came from the looser in the tug of collarbone contest. This quickly spread throughout England, and the English people referred to the breaking of the bones as “merry-thoughts.”

When the Pilgrims arrived at Plymouth Rock, they brought the custom of breaking the wishbone with them. As they looked around at their new surroundings in the woods of North America, there were no chickens, but turkeys were abundant. They changed the custom from the chicken to the turkey.

This custom is certainly alive and well with families like mine all across the country. Families gather around the Thanksgiving table each year and watch as dad very skillfully removes the U- shaped wishbone. Unlike our forefather’s the tradition is far too exciting to let the wishbone dry out. One family member is usually charged with detailing the rules of the wishbone break to the chosen contestants. The anticipation builds and the breaking of the wishbone contest begins. The declaration of the lucky one is decided by who ends up with the largest part of the bone. The winner is awarded with the anticipation of good luck for the future.

Wouldn’t it be interesting if our future could be shaped by the lucky break of the wish bone? We all know that is not true, but what shapes our future is surrounding ourselves with people that will help guide and assist us in making those hard decisions. Much like the father that carefully carves out the wishbone each year, you as estate planning attorneys, help families carve out and secure your clients financial future and protect their legacy. Legacy Safeguard is proud to be a part of team assisting families in their time of need and insuring their memories and traditions are passed on to future generations. Getting the “lucky break” is finding the right support system that can help secure your family legacy, and we are thankful that we can have some small part in that at Legacy Safeguard.

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 Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com

What’s your true value as an estate planning attorney? If you’re going to be successful, this is something that needs to be crystal clear to you and your staff, and it’s something that you need to be able to communicate in no uncertain terms to your clients and prospective clients. I’ll give you a hint – it’s not the documents you produce.

I’ve been reading about the latest lawsuit against LegalZoom. This one is a class action filed in California by a woman who is the niece and executor of the estate of LegalZoom client Anthony J. Ferrantino. Mr. Ferrantino, in the last months of his life, used LegalZoom to draw up a will and a living trust. It turns out that the trust couldn’t be funded because Mr. Ferrantino’s financial institutions would not accept the LegalZoom documents.

Naturally, upon finding this out, Mr. Ferrantino and his niece, Katherine Webster, asked LegalZoom for help – to no avail. After Mr. Ferrantino passed away with his trust still unfunded, it turned out that his will was also invalid because it had not been properly executed. Ms. Webster’s lawsuit is based on LegalZoom’s alleged deceptive business practices and unlicensed practice of law.

So, the trust documents were flawed. Giving LegalZoom the benefit of the doubt, you could make the valid argument that even attorneys have been known to make mistakes in the drafting of estate planning documents. It’s less likely that a lawyer would let a will go out the door improperly executed. In my mind, though, these aren’t the real issues.

The problem is that when consumers use “services” like LegalZoom, they’re on their own. Even after fatal flaws were found in the trust documents, LegalZoom did nothing to remedy the situation. Would this have happened if someone had been unable to fund a trust that you had created? I sincerely doubt it.

The value that we as estate planning attorneys offer our clients is not just the documents… although well-drafted and effective documents are intrinsically valuable. Instead, the value we offer is our role as knowledgeable and trusted counselors… our relationship with our clients. When clients come to us for an estate plan, we’re not just filling in the blanks on their behalf. We’re listening intently to their stories and their questions, and often reading between the lines, to help them discern their true needs. And we’re there for our clients as issues emerge and their needs evolve.

So, in the end, we’re not even competing in the same market as LegalZoom and other companies of its ilk. We’re not providing a simple commodity – and our clients and prospective clients deserve to know this. How are you and your staff making sure everyone understands the distinction?

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

In 2010, estate planning attorneys have been wondering “what will happen to the estate tax?” We have been wondering whether the pre-EGTRRA estate tax applicable exclusion of $1 million will return or if Congress will finally fix the mess it created years ago. Will the exclusion go back to the $3.5 million we had in 2009 under EGTRRA? Will there be restrictions on GRATs? Will there be restrictions on FLPs?

The intricacies of the estate tax may be in the front of our minds. The estate tax and its strategies may even be of importance to many of our clients. But, seldom is estate tax planning the most important thing we do for our clients. Even with the applicable exclusion at $1 million, most people will not have a taxable estate. But, everyone is concerned about taking care of those closest to them.

We advise clients how to leave assets to their beneficiaries, while minimizing the risk that the assets will be squandered or attached by creditors. We advise clients how to leave assets for their child with special needs, without jeopardizing the child’s governmental benefits. Many of us help our clients with elder law matters, helping them keep their home even in the face of health concerns.

As we approach the holiday season, it’s important to recognize how important we are in the lives of our clients. Our planning enables our clients to make it through very difficult times more easily. We help our clients protect those most important to them from the hardships in life, even when they cannot be there themselves.

Do you have a memorable story to share? Has a client shared how you have made a difference? Please share your story!

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

Maybe you don’t care what people will do to honor you after your death. After all, you won’t be around to enjoy the party. But the people who love you care deeply.

My friend Gary, a confirmed bachelor in his sixties with no immediate family in the area, says that he doesn’t want a funeral when he dies. To his way of thinking, he’s not religious, doesn’t like ceremonies or rituals, and wouldn’t want people to make a fuss. But so many of his friends will miss him and his generosity, warm wit, deep intellect, incredible guitar playing, and appreciation of fine wine. Those who know him and call him a friend will want to honor his life, even though Gary pooh-poohs the idea.

My brother Mitch had a life partner named Wes who died from liver cancer in 2007. Within days, my brother and I, along with family and friends, planned a moving memorial service that reflected the many unique aspects of Wes’s life and character. “Wes explicitly said he didn’t want a memorial service,” said Mitch. “But we didn’t do it for him; we did it for us.”

Funerals, or memorial services if the body isn’t present at the event, are not really for the person who has passed on (and who may or may not be observing the proceedings). These rituals provide the opportunity for family and friends to come together in support, remember and share stories about the dearly departed, and celebrate his or her character and contributions. Dispatching ceremonies provide an appropriate closing chapter in the book of that person’s life.

“We need rituals, not just for the dead but for those of us who aren’t yet dead, as well. I am weary of sweeping up the pieces for those family members who would not recognize a loss with a ritual,” said Dr. William G. Hoy, a grief counselor and death educator.

He explained, “Very often — with those who don’t stop and ritualize the death — six months later, these families are in my office, having a harder time with grieving and healing. My clinical experience matches fairly closely the experience I hear from colleagues. We need rituals to celebrate the life, to be sure, but also to socially acknowledge the death.”

The bereavement process starts with the recognition and realization that someone has died. The funeral or memorial service provides an opportunity to remember and tell stories about the person, to come to terms with the reality of death, to reaffirm beliefs, and to release the spirit of the deceased. Remembering and reaffirming generate stories and laughter; realizing and releasing prompt healing tears and goodbyes.

Psychologists note a number of reasons why these rituals matter. They make the dead “safely dead,” dispatched with proper ceremony to rest in peace. They confirm that the deceased and their survivors matter, and that the community will continue. They provide structure in the midst of chaos and disorder, and assure communal support for survivors during a stressful time.

I’ve been attending and blogging about a funeral or memorial service every day since October 30, as part of my personal “30 Funerals in 30 Days Challenge.” At every single event – whether a traditional religious service or creative celebration of life – those who knew the deceased came together to express their love, and find comfort in community. You can help those whom you care about by giving them some idea of how you’d like your life to be celebrated.

Gail Rubin speaks to groups about funerals and memorial services and gets the conversation going. Her “30 Funerals in 30 Days Challenge” is chronicled on The Family Plot Blog (http://TheFamilyPlot.wordpress.com). She’s also the author of the forthcoming book, A Good Goodbye: Funeral Planning for Those Who Don’t Plan to Die (http://www.AGoodGoodbye.com).

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

So often we think that our personalities are fixed, and we’re doomed to live our lives with all of our bad habits and faults. We’re convinced that we and everyone around us had better just make accommodations as to who we are. Because we think this way, we don’t make an effort to change, assuming that a transformation would require years of concentrated effort and a complete personality overhaul.

A few years ago, I read What Got You Here Won’t Get You There, a book by top business coach Marshall Goldsmith. The book was about how small changes in habits and attitudes can transform our relationships with the people around us. In it, Goldsmith lists 20 habits that, when even slightly modified, can completely change our relationships. I think they’re worth repeating:

1.      Winning too much. The need to come out on top every single time.

2.      Adding too much value. The overwhelming desire to add your two cents to everything

3.      Passing judgment. The need to impose your standards on everyone.

4.      Making destructive comments. Needless sarcasm and cutting remarks that we think make us sound sharp and witty.

5.      Starting with “No,” But,” or “However,” Overuse of negative qualifiers which secretly say to others, “I’m right and you’re wrong.”

6.      Telling the world how smart we are.

7.      Speaking when angry. Using emotional volatility as a management tool.

8.      Negativity. “Let me explain to you why that won’t work.”  The need to share negative thoughts even when you weren’t asked.

9.      Withholding information. Refusal to share information in order to maintain control over others.

10.  Failing to give proper recognition. The inability to praise or reward others.

11.  Claiming credit we don’t deserve. The most annoying way to overestimate our contribution to any success.

12.  Making excuses. The need to reposition our annoying habits and behaviors so that other people will excuse them.

13.  Blaming the past for our present habits and flaws.

14.  Playing favorites at the office.

15.  Refusing to express regret. The inability to take responsibility for our actions, admit we’re wrong and see how our actions affect others.

16.  Not listening.

17.  Failing to express gratitude. The most basic form of bad manners.

18.  Punishing the messenger.

19.  Passing the buck.

20.  Excessive need to be “me.” Exalting our faults as virtue simply because they are who we are.

Is there a particular habit that jumps in your way?

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com

According to folklore, an ancient Chinese curse is “May You Live in Interesting Times.” Certainly, it does not get more interesting than 2010 for estate planners. 2010 has brought many major, temporary changes at the federal level. 2010 has also brought several unique changes at a state level.

As I blogged about before, several states have overridden estate plans for decedents dying in 2010:  http://www.aaepa.com/blog/2010/08/state-law-override-tax-benefits-bypass-trusts/.

2010 also may have a unique twist for state income taxes of decedents dying this year. Typically, states follow federal law with regard to income taxation rules. Section 1014(f) of the IRC provides that for federal income tax purposes the basis of property derived from a decedent is no longer derived by way of the step-up in basis rules. Instead, a modified carryover basis rule is applied. However, not every state will follow federal law in this regard. California, for one, is refusing to follow the federal lead in this regard. For California purposes, the basis of property of a decedent is determined without regard to IRC § 1014(f). See Cal. Rev. & Tax. Code §18035.6.

So, it will be necessary for a decedent’s attorney to keep two sets of basis records, one for California purposes and one for federal purposes.

Let’s look at an example. Decedent dies in 2010 with a single asset, a parcel of California real estate worth $5 million. The decedent purchased the property for $500,000 and made $200,000 of improvements over the years. So the basis immediately before death was $700,000. For federal income tax purposes the basis is $700,000 plus the executor allocates the $1.3 million of additional basis for a new federal income tax basis of $2 million for federal purposes. However, for California income tax purposes, the new basis is $5 million, i.e. the date of death value. The asset was inherited by Johnny who sells it in 2010 for $5 million. For California income tax purposes, Johnny has no gain. However, for federal purposes, Johnny has a gain of $3 million. For most other state income tax purposes, he would have a gain of $3 million.

This rule affects Californians who inherit property from a decedent dying in 2010. However, it may also affect non-Californians who inherit California property from a decedent dying in 2010. Basically, for California income tax purposes, the step-up will apply.

And you thought it couldn’t get any more complicated!

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

Here’s an early heads-up about an opportunity to do well by doing good!

The next annual National Healthcare Decisions Day is Saturday, April 16, 2011.

This initiative is geared to educating the public about the importance of making one’s healthcare wishes known. The ABA and NAELA, along with other national legal organizations, have already joined the 3-year-old effort.

NHDD is a great opportunity to make yourself better known in your community as an expert on this topic by volunteering your services.

With about 5 months till NHDD 2011, there’s plenty of time to start doing any of the following:

• Talk to your NHDD state liaison about volunteer opportunities that may already exist for NHDD. To find your state liaison, email me (I’m a liaison for Pennsylvania), or click here for the list of participating organizations, then find the tab called “State Liaisons” (this latter approach is a little clunky, which is why I’m offering to forward it to you)
  
• Register with NHDD 2011 as a participant to show your support for this initiative. No money required. Just click here.
• Volunteer to speak about advance directives at a community group as part of NHDD activities. Hospitals are often the best place to start. But in addition, there’s your local AARP chapter, senior center, library, assisted living facility, churches and other religious organizations. Don’t forget to add it to your C.V. under community activities.

I’ll be mentioning this NHDD marketing opportunity again before next April, but I wanted to give you a head start now so you can get it on your marketing calendar and do some real planning.

For more information on NHDD, visit www.nhdd.org or contact me at 610-667-3524 or rsiegel@docubank.com.

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 Rd., Ste. 240
San Diego, CA 92124
858-453-2128
www.aaepa.com