Earlier this year, I was appointed to the national Planned Giving Advisory Council of the Carter Center. Recently, I gave a presentation at the Carter Center in Atlanta. The Carter Center is guided by a fundamental commitment to human rights and the alleviation of human suffering. It seeks to prevent and resolve conflicts, enhance freedom and democracy, and improve health. The Carter Center is the vision of President Jimmy Carter and First Lady Roslynn Carter. In 2002, President Carter earned a Nobel Peace Prize for his work through the Carter Center.

The presentation which I gave at the Carter Center focused on the impact on non-profits of a hypothetical estate tax repeal. While a repeal of the estate tax would be welcome news for the less than 1% of the population currently subject to the estate tax, studies suggest it would not be welcome news for charities.

My research shows that people leave bequests to charity for many reasons. They leave bequests due to altruism, for a sense of community, or because they simply have nobody else to whom they would rather leave their wealth. But, a strong motivator for some is the estate tax. It is a motivator because the “cost” of giving the wealth to charity is effectively reduced by the tax they would otherwise pay. For example, if the person were leaving $100,000 subject to a 50% tax, only $50,000 would go to the intended recipient. Thus, the “cost” of leaving the $100,000 to charity would be only $50,000 in that case, due to the charitable estate tax deduction.

Research indicates that elimination of the estate tax would decrease bequests by about 25%. Bequests are only 10% of all giving by individuals. So, even a 25% reduction would not seem catastrophic. However, the research also indicates that repeal of the estate tax would result in a substantial reduction in lifetime charitable giving. In fact, the aggregate reduction in giving to charity (bequests and lifetime gifts) would be greater than all the bequests currently made to charity.

This reduction in overall charitable giving by more than 10% would be particularly difficult for charities to absorb at a time that government is reducing its support for non-profit activities. There is also discussion of limiting or eliminating the charitable income tax deduction. This could be a devastating one-two punch to charities.

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

I was registered to participate in a triathlon this weekend.  Unfortunately, Houston’s great September weather disappeared Friday.  The heavy rains on Friday continued into Saturday night and caused a cancellation of the cycling portion of the event.  The event then became what they called an aquathlon (swim/run).

For those considering either a triathlon or aquathlon, I thought I would share some important tips:

1. General Tips:

• If you are thinking about doing a triathlon, with little training in the swimming event, then reconsider the decision.  The swimming portion was a lot more work than I thought it would be.  Once you have reconsidered, proceed with the registration because no self-respecting, obsessive, compulsive, Type-A personality is going to back down from a challenge.

• Never believe the weatherman.  Despite the rains on Friday, all day Saturday, and Saturday evening, the weather was projected to be 71 degrees and sunny when the swim portion started, with 7 mph winds.  It wasn’t.  It was 70 degrees when I left for the event and 65 degrees when I got home.   There was no sun, it was misting, and the wind was definitely more than 7 mph.

 2. Swimming Tips:

• If you own a FitBit, leave it in the transition area.  The transition area is where you change gear from one event to the next.  As I stood near the water’s edge, watching those who started ahead of me, I suddenly realized I still had my FitBit.  I was then faced with a Hobson’s choice.  Go forward and replace it later, or save it now.  It was a ½ mile jog (round trip) to take it back to the transition area.  Hmmm… what to do!?  It was either $80 lost or $80 saved. I decided to make the jog.

• Don’t believe what anyone says about the water temperature.  When they tell you the water is 80+ degrees, it’s just a trick to make you think everything is going to be okay.  Actually, the water temperature was probably in the mid to high 70s, and we could have had 80+ degrees if we had had some sun and little or no rain.  I knew there was a problem the moment the first wave of swimmers in my age group started into the lake.  They were almost all having an “Oh God” moment, but their tone of voice suggested pain.  I knew this was not a good sign.

• Each wave of swimmers was separated by 5 minutes of time.  Never get into the water at the beginning of the 5 minute wait.  I found myself expending a fair amount of energy treading water to stay afloat, and trying not to bump into all the other swimmers who seemed to have this incredible urge to be next to me.  I, however, did not share their desire to occupy the same space.  Get in with only 1-2 minutes to spare.

• Never be at the front of the swimming line.  I was in the middle of the front row.  While I had no doubt I could make the distance, I knew my time would not threaten the world records of Michael Phelps.  The problem, however, is the number of people behind me who were obviously faster than me felt the need to swim over me after the horn blew.  (In fairness to the other swimmers, the water was murky and you could not see the person in front of you).

• If you do nothing else, try not to flop around like a dying fish.  At around ½ way through the swim course, I could feel the ankle strap for my timing chip slipping down towards the bottom of my ankle.  I stopped to fix it.  Stopping really meanings treading water and sometimes going under the water.  This creates the appearance that you might be drowning, thereby causing a lifeguard in a kayak to immediately paddle to your location to offer assistance.  While I was pleased with the concern for my safety, I was a little embarrassed for having caused the lifeguard to be concerned.

 3. Cycling Tips:

• Stay up late the night before the event so you can check the event’s website for weather updates and other important information.  If I had, I would not have been hauling my bike to an event with no bike portion to the event.

4. Running Tips:

• With the cancellation of the cycling portion, my ability to finish well in the run was diminished.  I did not pass anyone in the swim, but I got passed a lot.  I passed very few on the run course because by the time I got to the run course, there were not a lot of us left.  Given my improved cycling over the past few months, I could have generated some sort of a lead over at least a few people, thereby increasing the likelihood that I would not be near the end of the bodies still on the run course.

• The MOST IMPORTANT tip is that you need to be sure you are jogging well and at least pretending to look good as you approach the finish line,  (I did).  They have photographers at the finish line and elsewhere immortalizing the moment.  Therefore, regardless of how bad you might have looked on other parts of the course, if you look good at the end, then you looked good everywhere else.

5. General Comments:

• It does not matter if the event is a triathlon or an aquathlon.  You still get a finisher’s medal and it says triathlon.  Years from now at my funeral, I will have my finisher’s medals draped over my coffin, and other than my wife and those who did not read this, everyone will think I did a triathlon.

• Would I do it again?  See General Tips, paragraph 1 (yes).

Stephen A. Mendel is a trial, real estate, business, and estate planning/probate attorney in the Houston, Texas area. Mr. Mendel has over thirty-four (34) years of business experience, over twenty-three (23) years of legal experience, and has maintained his own private law practice for the past sixteen (16) years. Mr. Mendel is a also a registered architect, licensed real estate broker, AV rated by Martindale Hubbell, was recognized in 2010 as one of Houston’s Top 100 Professionals, and was recognized as 2011 Boss of the Year by the Houston Association of Legal Professionals. Mr. Mendel was a fulltime faculty member for five (5) years with the University of Houston, Central Campus, where he taught construction related courses while he attended law school. Mr. Mendel is a contributing author of four books:  (1) Strictly Business; (2) Love, Money & Control; (3) Total Wealth Management; and (4) Guiding Those Left Behind in Texas (a book on probate). Mr. Mendel publishes his own blog for his estate planning clients. www.mendaellawfirm.com/blog. In his “spare” time, Mr. Mendel enjoys jogging with his wife, snow skiing and attending sporting events with his son, and cycling.

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

A recent decision by the Third Circuit held that pooled trusts are available to those over the age of 65, and that Congress intended the charity to retain 100 percent of the trust residual on the death of the special needs beneficiary.

The case involved a possible clash between state and federal law, as it affected the Medicaid system, which is a state/federal partnership. To avoid abuse of the Medicaid system by using trusts to hide assets to manufacture Medicaid eligibility, Congress instituted stringent rules that trusts were to be regarded as assets in many circumstances. However, they exempted certain trusts that were designed to provide disabled/special needs individuals with comforts and other necessities, not covered by Medicaid.

Plaintiffs brought a class action under Section 9 of Pennsylvania Act 42 of 2005, codified at 62 Pa. Stat. Ann. § 1414 (Section 1414). This section was intended to regulate special needs trusts. The suit challenged Section 1414, saying it is preempted by the federal statute governing Medicaid eligibility. They sought declaratory and injunctive relief, granted by the District Court, which held that all but one of the provisions in question in Section 1414 was preempted

The court also ruled the plaintiff’s case was capable of being decided by a court, that they had a private right of action under Section 1983 and the Supremacy Clause, and that Section 1414 was severable. An appeal followed. The court’s finding on the appeal was that Section 1414’s 50-percent repayment rule, special needs provision, expenditure provision, and age restriction are preempted by federal law.

To view the complete appellate decision, you may find it here: http://www.ca3.uscourts.gov/opinarch/113439p.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

AS PROMISED…. WE’RE OFFERING FACEBOOK FANS A FREE COURSE FROM OUR RECENT SUMMIT!

In a previous blog post, I mentioned that our Associate Director of Education, Steve Hartnett, presented a substantive course on the topic of planning for Blended Families at our recent Fall Summit. The favorable response from our Members and Guests was overwhelming! Due to the evaluation forms turned in by all of the attendees of this session, we felt this would be one of the most popular and beneficial sessions of our Summit to offer the recording and materials to our FACEBOOK FANS.

We are just now wrapping up the editing of the audio recordings and posting the materials … If you’re *not* a fan of the American Academy Facebook page, you may want to head over to Facebook and “like” our page before the end of the week when we plan on posting the link to this great session!

If you know other attorneys who would benefit from the course as well, be sure to tell them we’re giving the course (at no charge) to all of our fans!

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

The documentary Last Will and Embezzlement will fire you up with righteous indignation, as it should. As estate planning attorneys, we know all too well about the horrible betrayal of trust and shocking manipulation that goes on in the lives of many elders. We have seen and heard firsthand what can happen when someone decides to fleece their aging parents or even a complete stranger. That is why we do what we do – protect senior’s assets from predators. We have all heard about Mickey Rooney’s son financially abusing him, and this is just the tip of the iceberg.

Elder exploitation is the easiest thing in the world for criminals to achieve. It is illegal, but usually safe to pull off and highly profitable. How easy is it to just walk into a nursing home where residents struggle with cognitive difficulties, hand them a document that signs away access to their finances, and walk out holding the keys to the bank? It’s easier than you might think.

This unconscionable theft and manipulation is typically carried out by someone whom the senior knows and trusts. The perpetrator just creeps into the elder’s life and becomes a part of it, building trust, sharing stories, gaining the confidence of their victim – and then – they strike. It may start out as requests for small amounts of money to tide them over.

Over time, the checks get larger and more frequent. One day, there is no more money, and no more happy-go-lucky-relative. The person whom the victim thought was taking care of them is gone with the money. There is no horror greater than someone abusing a senior and leaving them destitute, preying on their vulnerabilities, but it’s on the rise. Why?

Seniors are becoming the prey du jour for a number of reasons. The two major reasons are that the senior population is increasing, as the baby boomer generation ages, and that the family trying to care for them are between a rock and a hard place financially, trying to care for them. The result is often financial elder abuse.

As estate planning attorneys, we are well-positioned to help many individuals avoid abusive situations. It is incumbent upon us to take up that torch and protect seniors, who paved the way for us today.

Watch Last Will and Embezzlement and recommend it to your clients. Pass the word on, it may help someone when you least expect. Watch the YouTube trailer for the show: Last Will and Embezzlement

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 Football Season. Did you know that the start of football season coincides with another season, pertinent to law firms? Football season also kicks off Budget Season. Many law firms, like the majority of businesses, begin preparing next year’s budget during the last quarter (some even do it while watching Monday Night Football).

Here are three budgeting tips that will help you stay in the game longer, earn more fans and create a long-term winning streak.

 1. Draft a realistic game plan

Your budget is your financial and operational game plan for the coming year. Planning for the fundamentals is easy: overhead, salaries, supplies, marketing, etc. Flag on the field! Am I saying that marketing is a fundamental, essential expense? Absolutely. Marketing is your MVP and positions your law firm for success. You won’t have a winning season without it. Not including marketing in your annual budget is akin to benching your star quarterback. Draft your entire budget in writing, but don’t set the bar too high. You can’t score if you are unable to reach the end zone or field goal.

 2.  Keep your eye on the ball

Once your budget has been drafted, review it regularly to see how accurate your predictions were and if changes to the game plan are necessary. Host a monthly huddle with key management members to review the past month’s plays as well as formulate pending strategies for upcoming quarters. Frequent reviews help you stay on track, create a sense of teamwork and camaraderie, and ensure that each of your key players is following the same play book and aiming for the same goal.

 3. Don’t be sidelined by losses

Just as when there are several players on the field, your budget may be impacted by a number of unforeseeable factors. Your budget might remain on target for a quarter or two, only to be suddenly sacked by unexpected expenses. What happens in the first quarter, second quarter or even the third quarter doesn’t necessarily reflect the final score. Some months may have unexpected expenses while others offer unexpected opportunities. Due to your regular budget reviews, you will notice the fluctuations and take advantage when possible. One winning opportunity could easily offset a brief loss – the opportunities are often thrown into play by your MVP (marketing). Take advantage of cost-effective marketing strategies and communications to get back in the game.

Unfortunately, when most people think of a budget, they picture limitations, pain, penalty flags and fouls. It can be very difficult to view a budget as a positive rather than a negative. Your attitude can make or break the season. Begin by drafting a realistic financial game plan. Remember to budget for incidentals and give your superstars, such as marketing, adequate attention. By keeping your eye on your budgeting ball, your firm will be poised to take advantage of opportunities that might otherwise be missed. A solid game plan, budget-wise, will ensure that you will be able to run interference when an obstacle blocks your pass. Don’t let temporary losses take you out of the game – keep your eyes open for opportunities to compensate for minor financial injuries. If you follow these three simple budgeting tips, your firm is more likely to have a winning season, with raving fans to cheer you on for the long-term.

Becca Fieler is an Online Marketing Specialist for BizActions, a Thomson Reuters Business, serving as a strategic partner in the planning and implementation of electronic communication and marketing initiatives. She develops and oversees comprehensive programs that present marketing strategies and solutions to diverse audiences, including attorneys, accountants, banks and credit unions, human resource companies and other professional service providers.

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

In a law firm proprietor’s world, it is easy to get carried away with the day-to-day activities of firm life. Particularly for the small firm lawyer, a long workday can cause the attorney to overlook certain responsibilities that come with running, managing and operating the firm. Issues may arise when attorneys fail to implement hiring practices that help shield them from potential liability.

Small firm owners should therefore work to ensure that the firm adheres to employment practices in accordance with applicable state and federal law. The key to successfully managing unexpected personnel events is to ensure that the firm is prepared to address them before a situation spirals out of control.

What follows are some questions that law firm owners can ask themselves to ensure they are sufficiently keeping up with legal and ethical law firm requirements.

Does the firm’s hiring process preemptively protect from potential litigation? Many firms are reliant upon resumes when selecting candidates to fill legal positions; however, a formalized employment agreement ensures significantly more protection. For example, firm owners can opt to incorporate arbitration clauses to help protect against disputes that may arise. Additionally, if the firm hires independent consultants for special projects, any agreement should indicate that the consultant is engaged in work-for-hire and subject to confidentiality requirements.

Is the firm’s employee handbook up-to-date? In the event of a dispute, attorneys can point to the employee handbook for guidance as to how to address human resources complaints, and to ensure that the parties know their rights. The books can also offer information as to legally mandated items, such as meal and rest breaks, compensation laws and termination policies.

Is the firm staff effectively handling timekeeping for non-exempt salaried and hourly employees, and doing so in accordance with wage and hour laws? People who work in law firms may find themselves needing to work through lunch breaks, and to work overtime hours. In order to help protect the firm from liability, someone should be assigned to monitor when people work through breaks, and should cite the individual’s reasons for doing so. Keeping a log will provide a necessary defense should there ever be a question about the firm’s employment practices.

Does the firm staff conduct regular performance reviews and track reasons for termination? Doing so provides evidence against disgruntled employees who may allege that they were fired due to discrimination or otherwise without cause.

Addressing these simple questions allows firms to preemptively protect against potential liability, and therefore offers major protections should a human resources dispute arise.

Sanford M. Fisch
CEO & 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

The rate of divorce doubled for Americans aged 50 years and older between 1990 and 2009. That was a significant number of baby boomers whose lives had to change drastically from a double income family to a single income or no income unit. Divorce is disruptive at any age, but may be earth shattering after age 50. It points out the need to look post-divorce at estate planning, beneficiary designations, Medicaid planning, and long-term care planning.

A recent study on this rapidly growing trend was written by I-Fen Lin and Susan Brown, of the National Center for Family & Marriage Research at Bowling Green University. They found that the increasingly complex composition of marriages, re-marriages, and partnerships was rapidly changing the demographic landscape of the nation. The diversity of today’s family unit sheds a new light on what the graying of America truly means.

It is no longer widowhood that dominates the landscape, as it once did. These days, it is more likely than not that a single senior is a product of divorce. These are the same baby boomers that may have chosen to marry, divorce, and re-marry in their younger years; a factor that will increase the likelihood of a gray divorce later in life. Overall, the conclusions of the researchers indicate that marriage will be less common in the near future for baby boomers, which raises some serious issues with regard to estate planning.

Seniors facing divorce need to be well prepared for the challenges they are about to face: living on their own, with a reduced income. But, there are other issues that a newly-divorced senior would need to address. Those issues include revising their estate plan, examining beneficiary designations, and revisiting health care directives. It goes without saying that these issues are best addressed at the time of a divorce, but that may not always be possible, depending on the circumstances.

There is no doubt newly-divorced seniors face a tremendous uphill battle with significant changes for the future. As estate planning attorneys, we assist clients with putting their financial and legal houses in order, whether they are large or small.

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

If you missed my presentation “Laughing in the Face of Death: Funny Films for Funeral Planning” at the AAEPA Fall Summit, all is not lost. Here’s a recap of the film clips that were shown and the lessons from each.

Laughing in the Face of Death: The Pulitzer Prize-winning book The Denial of Death by Dr. Ernest Becker posits the Terror Management Theory. In a nutshell, it takes good self-esteem to consider one’s own mortality and make advance funeral plans. It’s estimated two-thirds of the population has low self-esteem. Humor helps circumvent avoidance of funeral planning issues. In a clip from The Mary Tyler Moore Show’s “Chuckles Bites the Dust” episode (1976) Mr. Grant explains to Ted Baxter why we laugh at something that scares us.

Planning a Funeral Party: Life cycle events, weddings and funerals, have similar elements: location, clergy, flowers, contacting all the family and friends, etc. However, if brides and grooms planned their weddings the way most people plan their funerals, they’d be scrambling to pull everything together in three to five days. A clip from Get Low (2009, PG-13) illustrates with Felix Bush, who wants to have a funeral party while he’s still alive.

Who’s In Charge? The Six Wives of Henry Lefay (2009, PG-13) provides a great example of the importance of making estate and funeral plans and keeping them up to date. Chaos and comedy ensues as Henry Lefay’s current and past wives come together at the funeral home.

Who Pays for the Funeral? Death at a Funeral (U.S. version – 2010, R) provides an opening to discuss Totten Trust/POD accounts, funeral trusts, and insurance.

Ensuring Your Arrangements: If you wanted something out of the ordinary, such as a Viking funeral, how can you ensure your plans are carried out? AAEPA’s Steve Hartnett suggests three ways: the executor be committed to the plan; pre-planning and pre-paying with a reputable funeral home; legal maneuvers and a letter in one’s personal files. Carpet Kingdom (2008, not rated) shows what happens when the will is ignored.

Personalizing Funerals: Undertaking Betty (2002, PG-13) is a comedy that shows an outrageous funeral fit for a Star Trek fan. Certified Celebrants can make the memorial service all about the person’s interests and passions.

Burial versus Cremation: Elizabethtown (2005, PG-13) is a romantic comedy that illustrates the clash of cultures between people who live in Kentucky (17% cremation rate) and Oregon (70%) regarding final disposition.

A Lesson in Eulogies and Ash Scattering: This scene from The Big Lebowski (1998, R) demonstrates the importance of where you stand when scattering. In addition, eulogies should be all about the deceased, not the person giving the eulogy.

Funerals and Storytelling: In the end, our lives are remembered in stories. Big Fish (2003, PG-13) illustrates the importance of having a community gathering. The Four R’s of every good memorial service are: Recognize the death; Remember with stories that prompt laughter and tears; Reaffirm beliefs; and Release the spirit of the deceased.

It was such a delight to meet so many AAEPA members at the summit! If you’d like directions for putting your own film clip presentations together, please email a note to Gail[at]AGoodGoodbye.com.

The Doyenne of Death™ Gail Rubin brings light to a dark subject and helps start funeral planning conversations with upbeat film clip-illustrated talks. She’s a Certified Celebrant and the author of the award-winning book A Good Goodbye: Funeral Planning for Those Who Don’t Plan to Die. Her website is www.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

At the Academy, we believe in the power of innovation. We are constantly trying to find ways to keep in touch with our colleagues and help our members find ways to expand their businesses. As such, we enjoy learning about how people in other industries are leveraging technological innovations to help fill needs within the field.

But, how can that technological innovation translate to a field that tackles more serious issues? A new essay from The Atlantic shows how one startup company is tackling a traditional niche industry with a fresh perspective. Mike Belsito, the CEO of eFuneral.com, started his company after his brother passed away. In planning his brother’s funeral, Belsito discovered that there was very little information about funeral home options on the web, and sites that had any information at all simply listed the phone number and address of local funeral home offerings. Later, after using Yelp.com to find local dinner options, he realized he could get more information about where to have a $40 meal than where to hold a funeral.

Belsito established his business by finding a need and attempting to fill it by offering an online platform where people can find funeral home ratings and reviews, the costs of funerals and any additional offerings. In the future, he hopes people will log on to the site to find ratings and reviews, but also to learn about offers on ancillary services and items like flowers.

So, what does this have to do with legal marketing? Perhaps more than you may think. The legal profession is notoriously traditional, so it requires perhaps even more creativity for lawyers to think outside the box in order to help grow their law firm practices. Even if you don’t have the technology or bandwidth to recreate your entire business model, you can strive to maintain active profiles on websites that cater to the legal profession, and can encourage people who’ve been pleased with your services to post positive testimonials or reviews. Or, you may want to think about starting a blog (have you seen this recent Academy post about the power of blogging?)

Much like the laws affecting funeral homes, there are numerous regulations as to how lawyers can advertise; however, if the funeral home industry can find ways to take advantage of technological innovation, then lawyers may also find creative opportunities for growth within the profession.

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