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The Academy is all about systems. We believe that if your law firm is not organized with the systems running the practice and the people running the systems you are bound to get inconsistent results, confusion among staff and a haphazard client experience. Yet when I talk with experienced attorneys around the country their comments are uniformly the same: No we don’t have any written systems.
I remind them that they do, indeed have systems, even if they’re not written down. The default systems in most firms are the staff member’s way of doing things laid down by each departing employee on their way out the door. That is if you’re lucky enough to have an employee that actually gives you proper notice when they leave.
Systems are your way of saying, “This is how we do things here. This how we answer the phone. This is how we meet with clients. This is how we draft documents and pleadings. This is how we dress. Whatever it is that is going to set your firm apart and brand it with your way of doing things will be found in your unique systems.
My suggestion is to start looking at every part of your firm’s processes from the largest to the smallest and begin writing them down, better yet flowchart them. Have all employees set aside time each week to create a binder outlining every detail of their job. Make it an ongoing project that you monitor as closely as you watch your cash flow.
When it’s done, you’ll never fear those unexpected resignation notices and, more importantly you’ll take pride in knowing the firm is a reflection of your unique vision.
Robert Armstrong
President and Co-Founder
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
It is long-settled that children conceived during life, but born posthumously, can inherit from their parent and can receive other benefits. But, can children conceived after death get benefits from a deceased parent’s Social Security account?
The short answer to this question, thanks to the Supreme Court’s recent unanimous decision, is – maybe. It depends on the existing intestacy laws in each state. The key factor is the state of residency of the deceased parent when they died. This case clarifies what happens with legal rights of children conceived after death, which I discussed in a prior blog.
Robert Caputo was diagnosed with esophageal cancer, which prompted the couple to cryovac his semen, as they wanted more children. Karen Caputo bore twins 18 months after the death of her husband, conceived via in vitro fertilization, using his frozen sperm. After the birth of the twins, Karen applied for Social Security survivor’s benefits on their behalf and was denied. When the case was brought in federal District court, it agreed with the SSA and found the children would only qualify if they stood to inherit from their parent according to state intestacy law.
At the time of his death, Robert lived in Florida. In that state, children conceived posthumously do not qualify for inheritance through intestate succession. The District court decision was reversed on appeal to the Third Circuit. The Court of Appeals found that the undisputed biological child(ren) of an insured qualify for Social Security survivor’s benefits without taking state intestacy laws into consideration. On appeal to the Supreme Court, the justices stated that while the Social Security Act could be interpreted to mean only those supported by the deceased in their lifetime, there were other reasonable constructions, on a state by state basis and interpretation of existing intestacy laws.
The Social Security Administration had longstanding regulations and rules that led them to interpret the law the way they did in the Caputo case. Since their interpretation was not contrary to the statute, it was entitled to deference. Ultimately, the court reversed and remanded this case.
If posthumously conceived children could draw on a deceased parent’s account, Social Security might have new claimants years and years after the original worker’s death. It is likely the impracticality of that result and the practicality of cutting off posthumously conceived heirs entered into Justice Ginsburg’s opinion for the court.
If you are interested in reading the whole case, you might want to check this link: http://www.supremecourt.gov/opinions/11pdf/11-159.pdf
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
The Medicaid Training Workshop, presented by David J. Zumpano, JD, CPA, founder of Medicaid Practice Systems (MPS, LLC) was another great Academy program packed with valuable information. And while education is the main purpose of such workshops and conferences, the networking opportunities can be just as valuable.
You can make the most of the opportunity, meet the right people, and perhaps drum up new business by following some simple ground rules:
- Do some research before you even leave home. Learn who will be attending, decide who you’d like to connect with, and prepare some talking points so you’ll have something to say when you approach them.
- Commit to meeting two new people at every session. Take the time before the presentation begins to greet the people seated around you, rather than burying your nose in your smartphone. Sit with people you don’t know during breaks and meals. Ask questions of the people you meet. People are more interested in themselves than they are in you, so asking questions will encourage conversation. “Why” questions tend to generate the most discussion.
- As a matter of fact, put your phone, iPad, or laptop away. Immersing yourself in electronics gives the impression that you’d prefer not to be approached.
- Attend the conference social events. Sometimes the most valuable contacts are made at post-conference events when people are less formal, more relaxed and have a drink in their hand.
- Follow up. A few days after meeting, follow up with a brief email. Mention something about your discussion or make a comment on an interesting topic that was part of the conference. Making notes on the business cards you collect is a great way to track what was discussed with each new contact. If you have a referral to offer, this would be the time to do so.
Your goal is to cultivate mutually beneficial relationships. By nurturing the relationship, you’ll establish a strong network of people you can count on for advice, feedback, support, and ideally, new clients.
Rita Chaires
SEO and Social Media Manager
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
Knowing what you’re sending through the U.S. Postal Service and how much you’re spending on postage is the first place to start when you’re thinking about how “systematic” your office procedures are set up, to capture and use client and prospective client email addresses.
Do a quick postage meter check to stay on top of what you’re spending on postage. Then ask yourself how much you DON’T mail because you’re trying to keep costs down.
Check your bar rules when it comes to emailing prospective clients, but keep in mind that invitations to educational events may not be considered “advertising.”
Providing something helpful, useful, educational and review oriented to clients on a monthly basis is highly recommended. Clients need to feel like you’re “their lawyer.”
Emails to clients, prospects and referral sources may be as simple as:
- Sharing a press release about something you or your firm was recognized for.
- You can also share an interesting blog you posted asking friends of the law firm to make sure they’re subscribing and to share the invitations with friends and family who may benefit from the information.
- Share an occasional Facebook Fan Page post with comments and tips on how easy it is to become a fan and share their opinions with your “community” on Facebook.
- Most states allow educational event invitations. Be clever enough with these that the email invitation is forwarded to friends of the people you’re emailing.
For clients only, you can:
- Send appointment reminders.
- Email directions to your office or seminars.
- Email birthday greetings.
- Review meeting invitations or reminders.
- Law firm evaluation requests with a link to your website.
- Instructions on how they can provide Yelp or other online reviews to help others in the community discover the same peace of mind they experienced with you and your staff.
The list is endless. Start yours with a list of things you feel yourself holding back on because you don’t want to invest in the postage. Then, put a system in place to capture email addresses on everyday forms you use in your processes. Ensure there is a system for updating the addresses. And educate your contacts about how sacred their email addresses are (not shared and you won’t spam)… Then you’re on your way.
Be careful if you also own an interest in a financial services firm, if you mix your law firm message with financial services messages, you’ll need to keep an eye on FINRA rules.
Jennifer Price
Director, Member Services, Marketing & Recruiting
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
Clients often seem to want to have their cake and eat it, too. They want to remove assets from their taxable estates, yet they want to control the assets, or even use the assets if they need to do so.
This year, we have an unprecedented opportunity for clients: the gift tax applicable exclusion is $5.12 million. But, clients are reluctant to make a gift and give up control. We used to tell clients to put their assets in an entity which they controlled, like an FLP, and gift away the limited partnership interests while retaining control of the general partnership interest. For a while, that seemed to work. However, after Strangi and its progeny, keeping complete control is no longer a viable strategy. The best that may be achieved safely is retention of control of day-to-day matters while relinquishing control over distributions of income and dissolution of the entity.
So, what’s a control-hungry client to do? What about a 529 plan? A contribution to a 529 plan is a completed gift and is not included in the estate of the donor, except to the extent the transferor had used future annual exclusions which for periods beyond the donor’s lifetime. This is a statutory safe harbor. IRC 529(c)(4). So, even if the transferor is the account owner with complete control, it is not in the transferor’s estate. Thus, the client can transfer the funds to the 529 plan and retain complete control. If the client has a setback and needs to retrieve the assets for their own use, they can do so.
Typically, 529 plans are touted for their income tax benefits. If the plan is used for qualified higher education expenses, such as tuition, the income and growth is tax-free, not just tax-deferred. Further, some states give a deduction or credit for contributions. However, even disregarding the income tax considerations, the 529 plan may be exactly what the client is seeking: A way to 1) maintain control, 2) reduce the taxable estate, and 3) retain the ability to regain the assets for their own use. Perhaps 529 plans really are estate planning’s Holy Grail, as I suggested in this article. The 529 plan is especially useful in today’s environment of the $5.12 applicable exclusion because many clients are feeling pressured and motivated to make gifts to take advantage of this limited-time opportunity—without giving up control or access.
In addition to the estate and gift tax attributes, there are other factors to consider in choosing a plan. Some characteristics, including the investment performance and the maximum allowable contribution, vary by plan, even within the same state. Other characteristics, such as asset protection attributes, vary by state.
Now, you can show your clients that there may be a way to have their cake, and eat it, too. But, they’ll need to do their homework in choosing a plan. They can get started on their research at savingforcollege.com.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
“It’s not right to rough up a kid for his lunch money, and it spits in the face of God to exploit the grieving for a buck.”
These strong words from Ed Howard, a lawyer and consumer advocate, were spoken at the recent Funeral Consumers Alliance (FCA) biennial meeting.
When Howard’s father died, it took him eight hours of calling funeral homes to get a rough outline of costs. Imagine the billable time he lost to a search for financial information related to funeral planning.
There’s also an emotional toll and level of frustration that could be avoided by funeral planning before there’s a death. And yet, “It’s not easy to get people to be informed and make decisions,” said funeral director Randy Garner, columnist for Funeral Director magazine.
Even though 80% of us will die a “managed death” in a medical setting, according to Garner, people still avoid advanced funeral planning. The FCA is dedicated to providing local information that protects a consumer’s right to choose a meaningful, dignified, and affordable funeral.
“What the FCA does is really, really, really important,” said Howard. “It’s hard because we don’t talk about funerals without a nervous giggle. We’re uncomfortable talking about death.”
Thousands of dollars spent on a funeral might be a drop in the bucket for your clients. Even when your clients have a net worth in the millions, don’t you help them get the best value for their money? Don’t overlook funeral services as a part of estate planning.
The Funeral Consumers Alliance can help. Local affiliates conduct surveys that pull together pricing information from funeral homes in each state and major market. Find your local affiliate through the organization’s website, www.funerals.org.
Gail Rubin is a Certified Celebrant and speaker who brings light to a dark subject and helps get funeral planning conversations started. Her book, A Good Goodbye: Funeral Planning for Those Who Don’t Plan to Die, has won multiple awards. Learn more at www.AGoodGoodbye.com. Gail is an ongoing contributor to the Academy blog. Contact: 505-265-7215 or email Gail@AGoodGoodbye.com.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
Recently I’ve been involved in a project to create a law firm procedure manual by reviewing our documented systems. The goal was to pull all of our information into job specific modules to expedite training and to fine-tune existing ones. Organizing this information into a one-stop employee training and reference manual was a bit of a project but definitely worthwhile because it is now a major time-saver for law firms training new employees.
If you do not have a procedure manual in place for your firm, you’re not alone. In fact, you’re in good company. Many employers do not have a training manual in place. It is even more common for them to rely on existing employees or former employees to train new hires only from memory and pass along their knowledge verbally while the trainee takes copious handwritten notes that are never typed, despite the best of intentions. Often this type of training is task-oriented instead of systems-oriented, and efficiency isn’t always taken into consideration. The obvious downside to this type of training practice is that over time, the systems become diluted, misinterpreted, changed to an employee’s preference or lost, especially if there are multiple turnovers. This type of training program is like having a football team without a play book. A better way is to have a planned strategy to educate and inform your biggest asset, and often, your biggest expense – your employees.
Once you recognize the need for a systemized training program, discuss this need with your staff and delegate the responsibility to each key person in the firm. Any process done on a regular basis can be systemized, documented and placed into a procedure manual. The easiest way to tackle this job is to type training steps as the training occurs then save it to a specified network folder for use later. Once a process is established and fine-tuned to be as efficient as possible, the next step is to drill down and document the step-by-step detail of that task or project. The last step is to then memorialize it in the procedure manual, so anyone picking up a particular responsibility would be able to do so efficiently and quickly. It will also speed up their ability to become a productive member of your team and save existing staff time by eliminating lengthy or repeat training sessions. Once you have a procedure manual in place, it is important to review periodically for updates or changes in those processes. Doing so will reward you and staff for years to come.
Susan Russel has been a Practice Building Consultant with the American Academy of Estate Planning Attorneys since 1997. She coaches estate planning attorneys across the country, frequently conducts conference calls, webinars as well as Summit sessions. Her email is Susan@aaepa.com if you have questions on this topic.
Susan Russel
Practice Building Consultant
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
I was recently privy to quite a spirited online debate among a group of estate planning attorneys. The topic? Revocable Living Trusts and whether most clients really need them.
I didn’t actually participate in the debate (I didn’t see the discussion until after the fact), but the topic is an important one, so I thought I’d take a few minutes to contribute my thoughts.
First and foremost, there are certain states where the time and costs involved in probating a decedent’s estate are significantly greater than those involved in administering a Revocable Living Trust. In these states, a Revocable Living Trust can make sense strictly as a probate avoidance measure.
However, even in states with a streamlined probate process, Revocable Living Trusts can have a number of other advantages, including:
- Avoidance of Ancillary Probate: Where a client owns real estate in another state, a Revocable Living Trust saves the family from the expense and hassle associated with maintaining probate proceedings in multiple states.
- Privacy: The terms of a Will are a matter of public record in a probate proceeding. The terms of a Revocable Living Trust are not subject to disclosure to prying eyes in most cases.
- Prevention of Anticipated Challenges: For some clients, the chance of a Will contest is significantly elevated. Whether a client expects a challenge to arise because of a same-sex relationship, bad blood within the family, or another reason, opting for a Revocable Living Trust over a Will can help keep litigious relatives out of court and allow for the smooth, orderly, and relatively peaceful settlement of the estate.
Beyond streamlining the process of settling a decedent’s estate and warding off potential challenges, a continuing trust can be beneficial for numerous purposes. For instance:
- Taxation. Credit shelter trusts can shelter assets from taxation in the surviving spouse’s estate. Similarly, generation skipping transfer (GST) trusts can be used to protect assets from taxation in the next generation’s estate.
- Management. When a client has a beneficiary who is a minor, or who just isn’t prudent or financially savvy enough to manage their own inheritance, a continuing trust can be the right choice for protecting that beneficiary’s inheritance.
- Divorce and Creditor Protection. A continuing trust can be an invaluable tool for protecting a beneficiary’s inheritance from creditors’ claims, not to mention dissipation in the event of a divorce.
It’s important to note that not every continuing trust begins as a Revocable Living Trust. A Will can also be used to generate a continuing trust. Which brings me to my real point: no estate plan is one-size-fits-all. That’s why clients need the counsel of an experienced, qualified attorney who can help them understand all the costs and benefits of the various estate planning options available to them.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
In the opening scene of the original Toy Story movie, cowboy Woody (Tom Hanks) tells Andy’s toys that they each need a “moving buddy” for their relocation to a new home. “If you don’t have one, get one!” he admonishes. “We don’t want any toys left behind.”
This is also my message to you about a client maintenance program. If you don’t have one, get one. Otherwise your firm may be left behind.
Yes, I’m continuing to beat the drum about maintenance programs in this post. Why? Because now would be the best time to start planning for 2013. Each year, I work with more estate planning firms that have implemented a maintenance program in their practices. And the firms that start planning over the summer are better positioned for an effective roll-out.
Just in case you need a recap, a maintenance program is a way to keep clients engaged with your firm for the long run. Typically, clients receive certain services on an annual basis for a set fee. (Usually programs are complimentary for the first year.) Services provided might include some variation on the following:
- An annual meeting with a paralegal or attorney to review the client’s plan
- Simple changes to estate planning documents, including law changes
- A “reasonable” number of phone calls to the firm
- Updating advance directives and enrollment in a healthcare directives registry
- An electronic vault for storing and sharing important wealth management documents
- An annual group client meeting and/or periodic educational seminar(s) for clients and family (e.g. trustees)
But even more than that, having a maintenance program changes the nature of your interaction with clients. It’s about moving from a transactional approach to a relationship-based approach.
Maintenance programs foster long-term relationships. They help position you as the “family counselor,” as a trusted advisor who will be there for your clients today, tomorrow and for years to come. With a maintenance program, you convincingly remind clients that “they’ve got a friend in you.”
Each year, you’ll learn more about your clients’ specific situations, and you’ll be able to provide better guidance. Clients will become more comfortable, both emotionally and intellectually, with you and your staff. They won’t want to start over with another estate planning attorney. In an economist’s language: you’ve raised the switching cost.
Without a maintenance program, you’re probably leaving money on the table: future revenue from the client’s restatements, advanced planning, trust admin or probate, plus the potential referrals from that client.
So how do you make a maintenance program workable and profitable in the short run as well as the long run? What are the keys to financial and operational success? Will Buzz and Woody ever understand the benefits of offering a maintenance program? More on that in the next post. Or contact me if you can’t wait.
Randi J. Siegel, MBA, is the President of DocuBank (docubank.com), the largest advance directives registry in the U.S., which ensures that the emergency information and healthcare directives of its 190,000 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 and health education related to advance care planning and advance directives and serves as Pennsylvania liaison to the National Healthcare Decisions Day initiative. Randi is an ongoing contributor to the Academy blog.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
It was truly a transformational first day for Academy Members attending the Medicaid Training Workshop yesterday, presented by David J. Zumpano, JD, CPA, founder of Medicaid Practice Systems (MPS, LLC). This information-packed program provides an in-depth review of the federal Medicaid rules and principles and how they can be applied in local communities to provide some true asset protection for clients who are interested in preserving their estate from long-term care and nursing home expenses.
The very real possibility of helping clients literally save hundreds of thousands of dollars in long-term care expenses with these strategies was a real eye-opening experience. At the end of the first day many attendees commented on how the training program made them “better lawyers.” They felt better equipped to address more of their client needs and were excited to return home and start implementing what they learned right away.
The learning objectives for the training program include:
- The Different Ways to Pay for Long Term Care
- Medicaid Laws, Rules, Exceptions, Exemptions, Special Planning & Spend Down Methods
- How to Distinguish Preplanning from Crisis Planning & How to Serve Both!
- Trust Compliance Requirements
- How to Properly Fund a Medicaid Plan
- How to Qualify a Client to Receive Medicaid Benefits
- How to Systematically Implement Medicaid into Your Existing Practice
The Medicaid planning topic and training program are so popular that the first training was full within minutes of its announcement at the Academy’s Spring Summit last month in Williamsburg, VA. A second training program is currently being scheduled and is already 75% full. If you’re interested in learning more about the next Medicaid Training Workshop, and how you can be a guest, please email info@aaepa.com.
Lillian Valdez
Practice Building Consultant
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
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