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“Do you or don’t you provide electronic copies of estate planning documents to your clients?” This subject recently sparked quite a discussion among several Academy Members on our Listserv. It turns out that our Members have a variety of policies when it comes to giving electronic copies of documents to their clients. Among the Members who joined in the discussion, the responses fell into three categories:
- Absolutely Not!
- Yes, But Only on Request
- Yes, As a Matter of Course
I thought I’d take some time in this blog to highlight some of the reasoning behind the “No” responses.
More than one of our Members has had the experience of a client taking an electronic copy, altering it, and unknowingly invalidating critical provisions of a Trust.
One member even ended up testifying in court because of his client’s attempted amendment to a Trust he had drafted. The attempted amendment? Changing the terms of the distribution. The attempted changes were made to the wrong Article of the Trust, and were ineffective. Of course, none of this was discovered until after the client passed away, and the estate ended up in litigation… not a pleasant situation for anyone involved.
Protecting clients from themselves seems to be the main concern of those Members who prefer to stick to providing only paper documents to clients. Another concern is potential liability when clients choose to “self-medicate” instead of seeking their attorneys’ guidance and counsel in amending estate planning documents.
In my next post, I’ll discuss the responses of our Members who choose to provide electronic copies of documents to their clients.
In the meantime, what’s your policy – and have you encountered any “self-medicating” clients?
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
Estate Planning attorneys understand that a revocable trust protects their clients’ privacy in death. Few but high profile clients share this understanding of how the use of a revocable trust can protect their privacy.
The Will of Elizabeth Edwards, the late, estranged wife of former Sen. John Edwards, is a case in point. She prepared a new Will on December 1, 2010. She died less than one week later, on December 7, 2010. The Will was filed in the court on December 22, 2010, shortly before the holidays. Right after the holidays, on January 5, 2011, the Will was posted on the internet for the whole world to see. In fact, here it is: http://www.insideedition.com/lib/pdf/5566/edwards-final-pdf.pdf
It’s probably not a surprise to anyone that she left her personal property to her children rather than to her estranged husband. But, we may never know how she disposed of most of her assets because the Will poured over to a revocable trust. In fact, it appears she restated the trust just prior to the will and then did a new Will to pour over into the newly restated trust. (States may vary regarding the ability of a Will to pour assets into a trust which is altered after the execution of the Will.)
While news stories drew conclusions regarding Elizabeth’s disinheritance of John in the Will, we know the true story: We do not know if she disinherited him. The only disposition we have knowledge of is the disposition of her personal belongings to her children. Since the remainder of her assets were all left to her revocable trust, we have no idea to whom she left those assets.
Of course, since John and Elizabeth are still married under North Carolina law, he would have a right to elect against the Will and receive his intestate share. The fact that they are estranged would not ordinarily alter these rights.
In life, Elizabeth’s privacy was significantly reduced due to John’s public life as a politician. Then, Elizabeth allowed glimpses into her life and her valiant struggle with breast cancer. Elizabeth’s trust preserves some privacy for Elizabeth, at least in death. If Elizabeth’s trust did not make provision for John, we’ll have to wait to see whether he exercises his right to elect against her Will. Of course, if he does so, it would be in a public proceeding. Thus, John’s exercise of his right of election would thwart the privacy which Elizabeth chose to preserve.
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
Have you ever gone to a party, showing up with a bottle of wine as a gift for the hosts, and found they’re not ready yet? Maybe they are still cleaning up or putting the kids’ toys away, the food isn’t ready, or oh no, the bar’s not set up!
Two attributes that set a gracious host apart from an unprepared one are the ability to organize and communicate. Most experienced party throwers know it takes some planning to put together a successful event. Celebrations all have similar elements: deciding on a date, time and place, extending invitations to guests, planning unique features to make the occasion more meaningful for the celebrants, and constructing a menu.
Parties get a bit more complicated as you move up the chain of life cycle events: a birthday for a two-year-old is simpler than a Sweet 16 affair. As families grow, there are graduations, anniversaries, and weddings to plan and celebrate, each more involved than the next.
And then there are funerals. These are the parties no one wants to plan. Yet this is a life cycle event that every family will undertake for every member at some point. They have the same elements of party planning as any other get-together. But if brides and grooms planned their weddings the way most people plan their funerals, they’d be scrambling to pull every element together in three to five days. Talk about stress!
By doing some advance planning, using organization and communication, families can minimize the emotional and financial chaos that often takes hold when someone dies.
Why preplan a funeral or memorial service? There are three very good reasons.
1. You can reduce stress at a time of grief and minimize family conflict. Think about this:
If you don’t have information on hand needed for a death certificate, like a social security number, place of birth, veteran information, and mother’s maiden name, how are you going to get it when that person is dead? That’s one stress you can avoid by pulling facts together while everyone’s alive and well.
If family members have preplanned, or at least discussed a preference regarding burial, cremation, or other options, you can avoid the stress of wondering what they would have wanted.
Organization and communication can also help minimize family conflict. We’ve all heard of Bridezillas created by the stress of weddings. Funerals can create family feuds over the smallest items.
My friend Roger McManus experienced the death of both parents in very different ways. His dad had ALS (Lou Gehrig’s Disease) and had planned extensively before he died – everything went smoothly. His mom, on the other hand, sat down on the couch to watch TV, fell asleep, and never woke up. She had absolutely no plans in place. The family started fighting over who got the cat, the good china – almost everything.
The experience with his mother’s death prompted Roger to create an organizer called From Here to Hereafter: Everything My Family Needs to Know. As Roger is a frequent flier, in chatting with his seatmates, the conversation invariably turns to funerals and the conflicts they provoke. His first question is usually, “So when did the fight start?”
2. You can save money, potentially thousands of dollars. Shopping around for the best price is the last thing you want to do when a loved one has died. On top of that, you might make purchasing decisions with your heart – rather than your head – and overspend out of guilt or remorse.
My friend Gary, who doesn’t want a fuss when he dies, wanted a cheap, simple, prepaid cremation, so everything would be taken care of when the time comes. I went with him on shopping excursions to several local funeral homes. His plain request resulted in a $750 price variation between providers for essentially the same services. The difference was due to overhead for the upscale funeral home setting of the highest priced provider.
We also found funeral directors can have a great sense of humor, when there’s no death imminent. When someone has recently died, or is about to die, the conversation has an appropriately somber tone. In addition to saving money, it’s a fascinating shopping trip and a much more upbeat experience.
3. With advance planning, you can create a really meaningful event that becomes a treasured memory. You don’t even have to wait until the person is dead to hold a celebration of their life. Living memorial services give the entire family a chance to speak words of love and admiration, or to make amends before it’s too late.
In one case, I coached a woman whose elderly father was fading fast. With organization and communication, she pulled the family together before Thanksgiving for an event not unlike a celebrity roast.
While the family wasn’t sure about the appropriateness of this event, her father really enjoyed being the center of attention. Those who did not approve initially came around to see it as a wonderful, memorable time. Her father died six weeks later. Everyone in the family who attended now treasures the warm memories of his living memorial service.
With just a bit of forethought and planning, the life cycle event formerly known as a funeral can be a warm celebration of life. It takes organization and communication to reduce stress at a time of grief, save money, and create a meaningful, memorable event.
When there’s a death in the family and friends come bearing casseroles, will you be the perfect picture of grace under fire? Or will you be the host who scrambles to put everything together at the last minute? The choice is yours.
Gail Rubin, “The Doyenne of Death,” speaks to groups about “Funeral Planning for Those Who Don’t Plan to Die” and gets the conversation going. A member of the Association for Death Education and Counseling, she’s the author of the new book, A Good Goodbye: Funeral Planning for Those Who Don’t Plan to Die (www.AGoodGoodbye.com). She also writes The Family Plot Blog (http://TheFamilyPlot.wordpress.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
The Academy’s training on initial consultations is coming up in February, which is always a great reminder of the real value that we, as Academy lawyers, offer our clients. Anyone who knows our organization can tell you that our clients don’t come to Academy attorneys as a result of bargain shopping. And this is a good thing.
Why? Because, as in so many areas of life, estate planning bargains often end up costing more in the long run. One example of this is an article that was published in the New York Times last fall that highlighted what may be the ultimate in bargain estate planning: online Will-drafting software. The article’s author used four different online services to come up with four very different drafts of her Will. When she had the drafts reviewed by an estate planning attorney, a multitude of problems and potential problems revealed themselves. These problems ran the gamut from a Will that lacked any provisions for distributing the testator’s property, to potential estate tax issues, to a service that did not provide a Self-Proving Affidavit along with the Will.
The common denominator among all of these Will-drafting websites is that, at the core, clients are walking away with do-it-yourself documents. These sites are careful to advertise that they don’t offer legal advice, so clients with no knowledge of the law end up with an “estate plan” that may or may not perform as they intend. And we all know the potential costs, both monetary and emotional – of a faulty estate plan.
In fact, we all have seen the commercials on TV by drug companies extolling the virtues of this drug or that drug. At the end of the commercials you see fine print and hear a voice talking at a lower volume and quicker pace say things like there may be side effects which include, depression and you may have thoughts of suicide. If this happens to you be sure to consult with your doctor. When I hear that I always think, this might be too late. Same holds true for estate plans, when you find out it did not work, it is usually too late!
These online services view estate planning as a commodity. They convince clients that the documents are the only thing that’s important, and that establishing an estate plan is as simple as answering an online questionnaire or filling in a few blanks. Unfortunately, many attorneys have bought into this approach, and attempt to compete in this commodities market, where the only leverage is price.
Academy lawyers take a different view. We don’t offer commodities. Instead, we look for clients who want real answers to their issues, in the form of a transformational experience. Our goal is to build an ongoing relationship with each client, and these relationships often last a lifetime, even becoming multi-generational within a family. This is something you just can’t get from a website.
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
Every once in awhile, we’re faced with married clients who most likely need an AB Trust or Credit Shelter Trust, but who are hesitant to establish one. Why? They’re afraid that, at the death of the first spouse, the terms of the trust will obligate the survivor to set up a Family Trust that proves unnecessary. And, there may be circumstances when this requirement would be unnecessary, particularly in light of the estate tax provisions of the Tax Relief Act of 2010 (TRA 2010).
For example, what if both spouses pass away before 2013, and they end up exempt from estate tax under TRA 2010? Or, what if Congress springs to action in 2012 and permanently extends the current estate tax provisions?
Unfortunately, there are plenty of “what ifs” on the other side of those arguments. Such as, what if the second spouse dies in 2013, and the current estate tax provisions have been allowed to sunset? With substantial assets and no AB Trust, the second spouse’s estate may be subject to taxes that could otherwise have been avoided. What if the surviving spouse has remarries and subsequently divorces? With no AB Trust, the assets might have become marital property in the second marriage and subject to division in the divorce action.
Without a crystal ball, it’s impossible to know for sure what a family’s circumstances – let alone the status of the law – will be when the first spouse passes away.
One solution that adds flexibility to an estate plan is the “Flex Trust.” This option is particularly attractive if you have clients who are on the fence about opting for AB Trust planning. Under this arrangement, when the trust is created, the clients select a trusted person or “special co-trustee” – an independent third party other than a beneficiary or the surviving spouse. At the time of the first spouse’s death, this “special co-trustee” decides how much to put in the Family Trust, if any. This allows the flexibility to fund the Family trust without being required to do so, if the circumstances don’t warrant it at the time.
This option might be appropriate in most situations, for instance, when your clients are in a long-term marriage, and have no children other than those born of that marriage.
However, a Flex Trust would not be appropriate when the client has a stated goal of protecting beneficiaries other than his or her spouse. In that situation, under the Flex Trust the trusted independent person could send all of the assets to the surviving spouse, who might choose different ultimate beneficiaries than the deceased spouse’s children. If the client is concerned about concretely providing for the ultimate disposition of the assets, then a standard AB Trust would be the way to go.
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
Use Nat’l Healthcare Decisions Day to Benefit Your Firm and Your Community
Now’s the time to plan in earnest for April 16 – National Healthcare Decisions Day (NHDD).
Community service can be a great way to offer yourself as a knowledgeable, trusted advisor and expand your presence within your community. In this post, I’m offering specific ideas for how you can do this with NHDD.
A grassroots initiative to encourage Americans to express their healthcare wishes, NHDD began in 2008. April 16th, “the day after Tax Day,” was selected in accordance with Ben Franklin’s famous adage: “Nothing in life is certain but death and taxes.” This year, the ABA, NAELA, and 80+ national organizations, are working with state and community organizations to increase participation in advance care planning. In many states, the most involved organizations are hospitals and hospices, so the expertise of an estate planning attorney should be warmly welcomed.
Here are some ideas for how your firm can participate in NHDD:
(Roughly in order of amount of effort. Events are being held on and around April 16, which is a Saturday.)
Register your firm with NHDD. Show your support for this initiative by adding your name to the list of participants. No fee is required.
Share this info with your state bar section for Trusts & Estates or Elder Law. You can also offer a proclamation for the section to affirm. And have the section register with NHDD, as well.
Get some traditional press or e-press from NHDD. Submit an article or op-ed piece to your local paper, or include an article in your client newsletter. You can request NHDD materials that have been specifically created for estate planning attorneys, including an article for your firm’s e-newsletter, a letter to the editor, and a press release.
Blog or Tweet about NHDD. You may find useful content on the NHDD blog or its Facts page. You can also sign up to receive updates from the NHDD social media sites: NHDD Twitter, NHDD Facebook, NHDD Facebook Causes, NHDD LinkedIn Group.
Contact your state’s NHDD Liaison. Volunteer to speak at or participate in an event. Learn what events are already being planned in your state. To find your state liaison, email me or click here and then click on the “State Liaisons” tab at the bottom of the spreadsheet.
Speak to a local community group. Take the initiative to contact your local hospital(s), AARP chapter, senior center, library, assisted living facility, church or other religious organizations. Offer your services as a speaker and educator on or around April 16.
You can use NHDD’s PowerPoint template as a starting point.
Host your own educational session for the public on advance directives. You can use this event flyer template to announce the event.
Host an educational session on advance directives for prospective clients or family members of existing clients. This can be a great way to create relationships with your clients’ adult children. A related option is to host an educational session on the role of the Health Care Power of Attorney. Either one also gives you an opportunity to forge relationships with local physicians and hospitals; invite them to attend or speak.
Tie into Upcoming PBS Documentary Film Release. Find out whether your local PBS station will be airing Consider the Conversation, a documentary on healthcare wishes and end of life discussions, scheduled for March release. Offer yourself to the station as a legal resource for radio and TV interviews. You can also link any of the aforementioned speaking options with a showing of the film (DVD is available for purchase.)
Post your Event(s) on the NHDD Webpage. This event calendar enables the public to search for and learn about NHDD events across your state.
Become an NHDD State Liaison and take your involvement to the next level. Volunteer here.
No Need to Recreate the Wheel!
The NHDD website has a wealth of materials, including the PowerPoint presentation, letters for community and religious organizations, and much more. You can also get ideas by following NHDD on many social media outlets: NHDD Twitter, NHDD Facebook, NHDD Facebook Causes, NHDD LinkedIn Group.
I invite you take advantage of at least one of these opportunities to help build awareness about the importance of advance directives and help build your practice in the process. I hope at least one will resonate for you or spark an idea of your own!
Please let me know if you register with NHDD and about anything else you’re considering doing to participate. I’d like to share the ideas in this forum next year! For additional information about NHDD, feel free to contact me at (610) 667-3524 or rsiegel@docubank.com.
Randi J. Siegel, MBA, is a Pennsylvania Liaison for the National Healthcare Decisions Day Initiative, a role she has filled since NHDD began in 2008. Randi is also president of DocuBank, the largest advance directive registry in the U.S., which ensures that the healthcare directives of its 185,000 registrants are immediately available 24/7/365. Working with estate planning and elder law 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
When it comes to making sure that everything gets done in your firm, there’s a thin line between delegation and abdication. As a business owner, it’s easy to hear the term “delegation” and develop a feeling of dread in the pit of your stomach.
This is because we usually approach delegation in one of two ways – and neither of them actually results in a task being delegated.
The first approach is to simply not delegate anything to your staff. When you use this approach, your line of reasoning may go something like this, “I really need to get this task done, but don’t want to/don’t have time to do it myself. I’ll hand it off to Mary. Wait a minute… what if she doesn’t do it right/turns it in late/doesn’t do it my way… oh well, I might as well just do it myself.”
The second approach may seem like delegation, but it’s actually something very different. This approach is to identify a task that needs to be done, hand that task off to someone in your office, and simply walk away. This is what a lot of us think of as delegation, but it’s really abdication – and it rarely works.
What’s the difference? Abdication is simply handing off a task to another person, while failing to acknowledge the fact that you are still the one responsible for the ultimate outcome. Delegation, on the other hand, is giving a task to another person, with the responsibility to act on your behalf. This means you realize that, ultimately, you’re still responsible for the final outcome, and this realization can make all the difference.
Here are the steps for actually delegating a task:
- Define precisely what task you want to delegate.
- Make sure your employee understands what you’ve delegated.
- Explain why it needs to be done the way you want it done.
- Spend time teaching how it is to be done.
- Make sure your employee understands what’s expected.
- Set a deadline for the task to be completed, or for a progress report.
- Follow up and check on the employee’s progress.
- Get an agreement on a deadline for completion of the task.
Try it and see: when you actually delegate a task to a well-trained employee, you may be amazed at the results you get!
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
The gold standard for estate planning has been the AB Trust. With the new estate tax provisions of the Tax Relief Act of 2010 now in effect, questions have arisen as to whether AB Trust planning is still necessary. The truth is, the AB Trust continues to be a great option because the it has so many uses that go beyond estate tax planning. For example, an AB Trust can be used to balance the needs of blended families, to protect the assets of a surviving spouse and children from creditors, and to shield assets in the event that a surviving spouse remarries and subsequently divorces.
Especially for blended families, the AB Trust can be a critical estate planning tool. At the death of the first spouse, his assets are split among the Family, or “B”, Trust, and the Survivor’s, or “A” Trust. The Family Trust is irrevocable, which in addition to offering estate tax advantages, also helps guarantee that the assets it holds will be preserved for the decedent’s children. The surviving spouse is entitled to the income from the trust, which provides for this surviving spouse’s support during his or her lifetime, while the decedent’s children have the security of knowing that the Family Trust assets are there for them. This eliminates concerns about a new step-parent getting all the money intended for the kids.
But what if your clients are a traditional family – a husband and wife in a long-term marriage, whose only children are products of that marriage? If this hypothetical couple has significant assets, but those assets won’t be taxable in 2011 or 2012 because of the exemptions allowed under TRA 2010, they might be hesitant to include an AB Trust in their estate plan at all. Often, clients don’t want to deal with the loss of control, or the perceived difficulty or hassle that may come with the requirement to set up the Family Trust – especially when the future of the estate tax is uncertain.
But, what if there were a way to retain the planning advantages of the Family Trust, while not hamstringing the surviving spouse? There is a way to do that, or at least to defer the decision until the first death. I’ll talk about that in my next blog.
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
Setting fees for your services… it’s something we could have an endless conversation about. How do you determine what to charge when price is such an elastic thing? And, are you bound by what your competitors are charging?
The first thing you have to do when determining what fees to charge is to stop comparing yourself to other lawyers in your market. And stop thinking of yourself as simply providing a commodity.
You see, one of the factors that cause prices to bunch together in a certain range within a market is competition. But are other lawyers in your area truly your competitors if you’re offering more than just the same old documents… if you’re offering your clients an experience they can’t get anywhere else?
If what you’re offering is unique, then you’re not bound by the conventions of your local market. That’s why the Academy is continually inventing new approaches and strategies to offer to clients, like Legacy Wealth Planning, Access Trusts, Sentry Trusts, and Family Wealth Trusts. These approaches help you provide a level of service – and a transformational experience – that can’t be compared to the average documents being produced by other attorneys in your area.
So, once you’ve differentiated yourself from your competition and broken out of your local price structure, what’s next?
You need to find the right clients – selling to clients who are only looking to buy a commodity will just frustrate you and lead to unnecessary price cuts. Instead, you need to identify your ideal clients – people who will value the artistry you have to offer. And they’re out there. But you need to think, deeply and specifically, about who they are. You need to know things like:
- Where do they live, work and shop?
- What do they do for a living? How much do they earn?
- How many children do they have?
- What are their political leanings?
- What are their dreams, hopes, and fears – what keeps them up at night?
Come up with a profile of your perfect clients, down to every last detail – even naming them – and then construct your business around them.
This is why we keep telling you to raise your fees! Peak Performers create a transformational experience for their ideal clients and receive a major price premium for their efforts.
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
It happens to all of us: all the professional and personal projects and responsibilities build up, and we get overwhelmed. And if you’re not careful, feeling overwhelmed can lead to a kind of paralysis, causing you to waste time and make the situation even worse.
Sometimes, when I’m feeling overwhelmed, I follow a two-step system for getting things back on track.
Step One: Write It Down
First, I list everything I have to do. I actually make two lists – one for business responsibilities and one for personal responsibilities. And I get very specific, listing every little task. So, instead of just writing down, “Anderson Project”, I’ll write down something more like this:
- Anderson Project
- Review File
- Call Barbara at bank
- Letter to beneficiaries
It’s funny, but just making a list that breaks down the tasks I need to accomplish makes those tasks seem much more doable.
And this stuff is always doable – I’m convinced that we dramatize any problem, with our mind playing a kind of shell game with us, moving tasks around and repeating the same ones so that it seems like we have more to do than any mere mortal can accomplish.
Just getting all the to-do’s down on paper is a huge step toward getting things accomplished. But there’s still a second step in the system.
Step Two: Delegate
After I’ve listed everything that I need to accomplish, it’s time to delegate, delegate, delegate! Especially for your business list, you should rely heavily on your staff to get things done and make your life easier, not the other way around. After all, that’s why you hired them! And don’t just dole out assignments to your people. Have them design a game plan for accomplishing the task and report on how they’re going to keep you up to speed on their progress.
What should you delegate? The better question is, “What shouldn’t you delegate?” You know those tasks that light you up and inspire you? Those are the ones you keep for yourself. Everything else should be delegated.
Start tomorrow.
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
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