Oregon Estate Planning Blog

Estate Planning is about Parenting with Purpose.

I had a major a-ha moment this week when I watched a video about estate planning at a web show called The Intentional Parent. It hit me that this is what estate planning is all about: Intentional Parenting, or Parenting with Purpose. 

I often try to pin down what my clients all have in common, and while they have varying incomes, careers, lifestyles, and values, what they DO have in common is that they are all seeking to parent their kids with purpose. The purpose is not always the same. I have clients whose kids go to the most academically recognized schools in Oregon and I have clients whose kids go to schools that are centered around the environment, religion, student democracy, and many other variations of those. I have clients whose kids go to public school and clients whose kids are homeschooled. Of course, parenting isn't all about what school you choose, but I bring up school choice to show you that while values may vary, all of my clients put a lot of thought and energy into their kids' education and upbringing. They're not just plowing through life hoping for the best. They're making decisions with purpose and intention.

Estate Planning is for parents who are parenting with intention and who want to protect the purpose that they have for their family. What will happen to all of the thought you put into parenting if something happens to you? Consider the following scenarios:

• You are injured and are out of work for many months;
• You are incapacitated and can't make health or financial decisions for yourself;
• You and your child are both incapaciated and there is no one to make decisions;
• You die prematurely without a plan in place.

What will happen to your purpose for your family in each of these scenarios? Who will take care of your kids? Who will make health decisions for you and your kids? Who will pay the bills? Who will ensure your kids complete their education? Who will pay for your kids upbringing? How much money will you have to pay to go through the various court processes if any of these things happen?

There are a lot of people who have the attitude of, "If I die, I die, but I'm pretty sure I'm not going to die." This is not the attitude of someone who parents with purpose. Someone who parents with purpose sees what they have in their power to do, and does it. You may not be able to ensure that the decisions that you make for your family will lead to a certain outcome, but you can ensure that if something bad happens to you, that your family has the best chance possible to continue life as you wanted them to live it.

It just so happens that right after Christmas comes the New Year, and that's the time to take action and make changes. If you haven't named guardians or prepared a will or trust (or if your current plan is more than a couple of years old), it's time to make sure that your precious family is protected. 

Take the first step and schedule your January appointment. If you call in December to make your January appointment, not only will you attend a FREE Family Treasures Planning Session with me, but I'll also give you $250.00 off of any planning that you do with my firm! The ONLY CATCH is that I have a limited number of appointments available for January, so if you're thinking of setting up an appointment, CALL NOW: (503) 235-5150.

Happy Holidays to you and yours!

To your family's health & prosperity,

Candice N. Aiston

P.S.  Want to get started on the most important planning you'll ever do for your family?  Give our office a call at (503) 235-5150 to get started.  You'll be glad you did.

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Want to use this article in your newsletter or on your blog or website?

 

You can!  Just please be sure to use this complete blurb with it:

 

Candice N. Aiston is an Estate Planning Attorney for families in the Portland, Oregon area.  She helps loving parents to prepare their families for a lifetime of security, prosperity, and guidance.  If you would like to receive her free report, "The 9 Common Planning Mistakes Parents Make," please visit http://candiceaistonlaw.com/.

 

What Estate Planning Documents Do I Need?

I recently returned from a trip to Hawaii, where I visited my family and attended my brother's wedding.  My two kids left a week before me with my parents, and that gave me some time to think about whether my estate plan was up to date.  No, it was not.  My guardian designations were outdated, my trustee designations were no longer going to work for my situation, and the new revisions to the Oregon Inheritance Tax created a big problem for my estate.  Honestly, I am embarrassed to say that I thought, "My plane is not going to crash.  I don't plan on dying.  This can wait."  But after the couple of weeks I just had with a friend dying and with two friends winding up in the hospital, I quickly shook off that nonsense.  I needed to update my plan.  A lot had changed in my life since I last updated it.  

I decided to show you what things look like now. Here is a list of everything in my binder and what you need to include in your plan:

• KidsCare Plan:  Long-term guardian designations; short-term guardian designations; instructions to caregivers about emergency plan; instructions to guardian about long-term care of kids; wallet ID cards (TO RECEIVE YOUR FREE KIDS CARE PLAN, CLICK HERE);
• Overview: The "Cliff's Notes" of the trust;
• Trust Agreement: Outlines terms of trust during lifetime and how assets are to be distributed after death; names Trustees;
• Pour-Over Will: Names Personal Representative and "catches" and assets that may have been left out of the trust;
• Nominations: A quick reference to see who is involved in the plan;
• Personal Information: Your most recent personal and financial information sheet;
• Funding Instructions: Shows you how to title assets and is handy to refer to when you acquire assets in the future;
• Power of Attorney: Names an agent to act for you financially if you are incapacitated;
• Privacy Affidavit: The short and sweet version of what banks and other institutions need to know about your trust;
• Trust Assets: Includes your asset spreadsheet, confirmation of asset transfers, and any information about your assets that your trustee will need to know;
• HIPAA Release: Allows your trustees and representatives to gain access to your medical records without a court order, saving your family money if you are incapacitated;
• Advance Directive: Names a Healthcare Representative to make healthcare decisions for you and outlines your healthcare wishes;
• Memorial Instructions: Everything your family needs to know to prepare an obituary, notify friends and groups of your passing, and plan a memorial service;
• Property Agreements: Any agreements you have with people you co-own property with;
• Personal Property Memorandum: Gives away specific items to specific people;
• Other Documents: This can include a Letter of Instruction to your trustee and letters you or your lawyer writes to your fiduciaries;
• Trust ID Card: This is handy to carry in your wallet to remind you how your trust should be titled;
• CD of Documents: For ease in sending any documents to fiduciaries, banks or other institutions, or doctors;
• Family Treasures Conversation: A recorded message to your family so that you can say all the things you want to make sure you've said.

 Of course, you may need more than this if your estate will be subject to estate taxes, or if you need to incorporate asset protection or business succession into your plan.  The most important part of your plan is professional counsel.  An estate planning attorney will be able to guide you in the direction that is right for your family.

To your family's health & prosperity,

 

P.S.  Want to get started on the most important planning you'll ever do for your family?  Give our office a call at (503) 235-5150 to get started.  You'll be glad you did.

___

Want to use this article in your newsletter or on your blog or website?

 

You can!  Just please be sure to use this complete blurb with it:

 

Candice N. Aiston is an Estate Planning Attorney for families in the Portland, Oregon area.  She helps loving parents to prepare their families for a lifetime of security, prosperity, and guidance.  If you would like to receive her free report, "The 9 Common Planning Mistakes Parents Make," please visit http://candiceaistonlaw.com/.

 

LegalZoom sued!

Just when I was ready to shut up about LegalZoom, figuring I'd said all I could say on the subject...the company is being sued!

Plaintiffs say they bought a living trust through LegalZoom, which was to include a revocable living trust, a will and a durable power of attorney. But [Plaintiff's Attorney] Webster says the documents were flawed as a result of LegalZoom's failures, and [Plaintiff] Ferrantino's estate had to hire an attorney to correct the problems. (bolding is mine)

The lawsuit alleges claims that LZ failed to follow California laws regulating the practice of law; that LZ encouraged customers to practice law without a license; and that LZ engaged in fraudulent business practices:

Webster said almost all of LegalZoom's other claims are contradicted by disclaimers that are accessible only by following links to secondary pages of the website, and in much smaller type than that displayed on the website's main pages.

For instance, Webster said that while the company claims that "virtually anyone" can use its product, the disclaimer states that "the law is a personal matter and no general information or legal tool like the kind LegalZoom provides can fit every circumstance."

I agree that it's deceptive to say on the main page that virtually anyone can use the program/product, and then issue a disclaimer on a different page.  I also found the attorney testimonials to be extremely deceptive as well.  As far as I can tell, none of the testimonials are from actual estate planning attorneys (because that would never, ever happen). 

While I'm saddened that this situation happened, and that this man's estate has to deal with the ramifications of a company's deceptive business practices, I'm glad that someone is finally stepping up to fight LegalZoom.

To your family's health & prosperity,

Wednesday Web Wrap-Up

Welcome to Wednesday Web Wrap-Up! Lots of great information put out over the past two weeks! Thank you to the attorneys and organizations that provided such great information.

Massachusetts Attorney Danielle G. Van Ess linked to this article, which illustrates the importance of business succession planning. Business owners need to think long and hard about how they want their business handled after their death. Not planning can leave a mess for your family. The law may require that some heirs have a stake in the business that you would never have wanted, and it may leave out heirs that you had wanted to include.

Los Angeles Attorney Angelica Simmons linked to this article about the feud between the grown children of Artist Frank Frazetta. Frazetta is still kickin' at age 82, but his children are already fighting over their future inheritance. I think the article speaks to the importance of family communication and planning.

Attorney Mike Lichterman posted this article, called, "What's So Bad About Probate?" on his blog. It explains why many people and their attorneys plan to avoid probate - it can be expensive, time consuming, and the records are public.

I cam across this article, "Celebrity estate fights can offer lessons for us," linked to on Twitter by various Estate Planning Attorneys. From the article: "[Michael] Jackson, for example, died at 50 but had made a will and set up a trust for his children. But like so many everyday fathers or mothers, he didn't take the next key step -- funding the trust or re-titling his assets into it. Now, it's a family mess." It's amazing to think that even Michael Jackson didn't properly set up his trust. It's scary to think that so many regular folks think they can do it properly online! 

WealthCounsel linked to two articles from fool.com: "Make Your Heirs Rich, Not Your Lawyer," and, "The Truth About Living Trusts." The first article talks about how much of your estate can be eaten up in probate fees and costs if you fail to plan (or use a will-based plan), and the second article talks about the use of trust planning. I personally believe that most families should use trust planning. The transfer of assets after death is much smoother, less costly, less time consuming, and totally private.

Attorney Jackie Bedard, of Carolina Family Estate Planning, linked to this Forbes photo article: "In Pictures: Nine Facts You Need to Know about Estate Tax." There are many misconceptions that people have about estate taxes. Most people don't realize that life insurance is included in your estate if you own the policy. Many people don't realize how steep the tax is and that it's not just the uber-wealthy that will be taxed. Look at the article to find out other facts.

To your family's health & prosperity,

Wednesday Web Wrap-Up

I often read other attorneys' estate planning blogs, and I often have other attorneys forward news articles about estate planning. I thought it would be cool to do a weekly series of compilations of the most interesting or noteworthy items in the estate planning world. I'll call it, "Wednesday Web Wrap-Up." I'm feeling super nerdy about this, but I suppose an estate planning blog is inherently nerdy, so what can I say?

The first article, "Assemble a Paper Trail, and Make Sure Your Heirs Can Follow It," from the New York Times, is a few weeks old, but the WealthCounsel attorneys have been discussing it this week. The general idea of the article is really great. One of the most important things about estate planning is creating a plan and communicating about that plan to the people who need to know about it. Many people create a plan and stick on a shelf or in a safety deposit box (or even in the freezer!), and when the documents are needed, no one knows they exist, or they know there's a plan but don't know where to look for the important documents. So I appreciated that aspect of the article.

What I didn't like were some of the errors I found. There were some errors in terminology, but the most important error I saw was the idea that a "simple will" that you can create on Legal Zoom will solve the problems raised in the article. Sure, in a simple will, you get to designate who gets what, but your estate will still have to go through the probate process and you're still looking at all those fees and costs discussed in the article. I can't tell you how many clients and even financial advisors have told me that they believe a will avoids probate. It doesn't. If probate avoidance is a goal, a revocable living trust plan is the way to go.

A good blog post that touches on the issue of the "simple will" is, "I don't do simple wills. In fact, I don't sell wills. I sell advice." from South Florida Estate Planning blog, by David Shulman. I related so much with this post, because I get about 2 or 3 phone calls every week from people asking me, "How much do you charge for a simple will?" I, like David, don't do simple wills. I do create will-based plans, but they're never simple. I like to tell people, "The documents are free! What you pay for is my advice and counsel. The documents are necessary, but they're included as a by-product of our relationship." And while we do create plans according to our clients' wishes, we start from a place of education. Before we talk about what kind of plan we're going to create, we show our clients exactly what their unique situation looks like, and what the options are to avoid different scenarios. Then our clients make an informed decision from there. Just like a doctor checks things out and gives you different options based on your situation, we check things out and talk about the different options before you make a decision.

The next article, "How Much Should You Leave the Kids?" from Money Sense, is actually a few weeks old, but Laura Lee Sparks, of Legal Marketing Maven, recently posted it on her Facebook page. I'm posting it because I really love the approach that the parents in the article took. They hashed things out with their adult children, and everyone knows what the plan is. This is the best way to prevent sibling battles and disappointments. I have seen estate planning gone wrong in my own family, and a lot of the problems could have been solved with a little communication between parents and their adult children.

Last, Rania Combs, a Texas estate planning attorney, posted, "Estate Planning for Special Needs Children," on her blog. I thought I'd post this for some of my readers and friends who have special needs children. These issues are very important to think about. When the child is a minor, you want to have special provisions in your estate plan that create a Special Needs Trust in the event of your death. This is the best way to preserve what you have for the child, while still preserving the child's ability to receive government benefits. Once your child is 18, there are other legal steps that must be taken. You should consult with an estate planning attorney to find out what steps you need to take.

I hope that you find some of these articles and posts helpful!

To your family's health & prosperity,

What are the disadvantages of setting up a trust?

Next in the "Let's Talk" series, a reader asks, "What are the disadvantages of setting up a trust?"

I assume that we are talking about setting up a Revocable Living Trust plan, as opposed to any Irrevocable Trust planning options. We'll talk about Irrevocable Trusts another day.

A Revocable Living Trust plan is an alternative to a Will-Based Plan. Most families with assets should opt for a Revocable Living Trust plan because it is the easiest and most affordable way to pass your assets on after your death. The most common reason that people go with this type of plan is so that they can avoid probate, which is a court process that happens after a person's death that essentially transfers title of assets to the person's heirs. Probate can be very expensive; it can be very lengthy; and it is a matter of public record.

In my opinion, any drawbacks to setting up a Revocable Living Trust plan are outweighed by the benefits, but I suspect that my readers (like my clients) are independent thinkers who want to get the whole story before they make a decision, so here are some disadvantages for you to consider:

1. A Trust-Based plan is more expensive to set up than a Will-Based plan.

The initial costs of setting up a Trust-Based are more expensive than a Will-Based plan. A Trust-Based plan can be two or three times more expensive. This is because setting up a Trust is more complicated, and because a Trust must be accompanied by several ancillary documents that a Will doesn't require. It takes a lot of your attorney's time to get the plan right. (This is also a reason why Trust kits are so dangerous.) However, where you may spend $4-6,000 for a properly crafted Trust plan, your estate's savings later on could be 10 to 20 times that amount. One of my colleagues compares a Trust plan with buying a car. A new car loses several thousand dollars in value as soon as you drive it off the lot, and several thousand dollars in value each year until it is ultimately worthless and you have to buy a new one. A Trust plan actually gains in value over the years. The larger your estate is, the more valuable your Trust plan becomes. You may need to do some tune-ups over the years, but it does not depreciate in value. 

2. Properly setting up a Trust can take up a lot of your time.

In order for your Trust to work properly, all of your assets must be retitled, or for some types of assets, your beneficiaries must be redesignated. This is called "funding" a Trust. This usually means a lot of paperwork on your part. Many attorneys offer the service of handling all of your funding for you (usually at an additional charge), so that would be an advantage if you don't have the time to do it yourself. Most people will find the time to do something that saves them thousands of dollars and headaches in the long run. 

3. Many Trusts fail to accomplish their purpose.

Many people spend several thousand dollars to set up a Trust, only to have it fail when it's needed. There are a number of reasons for this. The most common reason is usually a failure in the funding process. Any asset that is not retitled properly could be subjected to the probate process. It's essential for people who want to set up a Trust plan to work with an attorney who will guide them through the funding process, and who will offer ongoing assistance to help keep the plan updated. (Stay tuned for an upcoming post about what to look for in an estate planning attorney!)

As you might be able to tell, I stretched myself to be able to bring up disadvantages to setting up a Trust plan. If your family needs a Trust plan, the benefits will outweigh the disadvantages every time. Please see an estate planning attorney to find out which type of plan your family needs. If you are in the Portland, Oregon area, my office offers a free Family Wealth Planing Session for all blog readers (normally $750). It's an educational meeting where we analyze your financial and asset situation and show you exactly what your estate would look like if something happened to you. That way, you can go into estate planning with your eyes wide open!

To your family's health & prosperity,

P.S. Do you want to learn more about Estate Planning for parents? Visit my website to download my FREE report, "The 9 Planning Mistakes Parents Make." http://candiceaistonlaw.com/

P.P.S. Do you have a question I can answer on this blog? Email it to me at Candice@CandiceAistonLaw.com.

Wall Street Journal: If you have assets, use a trust

Stacey L. Bradford has put out "The Wall Street Journal Financial Guide for Parents." In it, she talks about how many parents should be setting up trusts. The only thing I would add is that when you seek out an attorney to do this, you should make sure that you are working with one who is going to keep up with you throughout your lifetime, so that you can be sure that your trust is always going to work for you. Ask the attorney whether they offer a free plan review (at least every 3 years) and whether they have a membership program for ongoing legal needs. We see many trusts fail because of little issues that could have been prevented with better client service and communication. (Actually, here is a good article about choosing an estate planning attorney.)

You can read the WSJ article here.

And here is the video interview of the author:

My spouse and I own everything jointly, so it's no prob...

I can't tell you how many people tell me that they are not worried about estate planning because they own everything jointly with their spouse, so it doesn't really matter.

WRONG!

Here are a few reasons why that kind of thinking costs thousands of dollars (at least):

1. What if you both die at the same time?

If you and your spouse die in the same accident and you have no planning in place, you're looking at spending a heck of a lot in probate fees. We estimate right now that probate costs approximately five (5) percent of your gross estate value. So (to give a little perspective) if all you own is a house worth $500,000, you're paying $25,000 to the court and your personal representative, possibly more when you take attorney's fees into account.

And that's not all. If you have minor children when you die without any planning in place, your kids are each going to get their share of inheritance when they turn 18. Yes, the law requires this! The law also does not discriminate with age when it comes to inheritance. So, your 20-year-old son and your 2-year-old son will inherit the same amount of money! Not what most parents would have wanted.

2. You could miss out on certain tax advantages only afforded married couples.

When you plan for death with joint ownership, what you effectively do is delay tax payment. What you lose when you plan this way is the tax benefit that married couples are afforded. Each person has a certain tax exemption when it comes to paying estate taxes ($3.5M for 2009, No tax in 2010, then $1M in 2011 and beyond). But with joint ownership planning, you lose one of those exemptions all for the sake of delaying payment. Each married couple should be planning for two tax exemptions. It might not be worth it in your case to lose that all for the sake of delaying any payment.

3.  Your assets are not protected after your death.

If you die before your spouse and own everything jointly, you're leaving an unprotected estate to your spouse and kids. If your spouse has creditors, they can reach all of the estate. If your spouse remarries then divorces, he or she may lose some of your estate to the ex. Or, if your spouse remarries and dies, there's no guarantee your kids will see any of that inheritance. Even if your spouse doesn't remarry, if he or she doesn't do any further estate planning, after his or her death, your children will receive their inheritance outright and unprotected. So, your child's creditors or ex-spouse may have a claim to it.

Planning with a Revocable Living Trust is a far better way to go. You retain lifetime control over your assets, but leave a much cleaner situation for those you leave behind.

Securing Your Dream with Estate Planning

This is a video that has Alexis Martin Neely speaking on CNBC about the importance of estate planning, even during tough economic times.

The Cost of a Trust

I found this video that a Texas attorney put up online.  He discusses the cost of setting up a trust, basically saying that a trust can cost anywhere from $35 (for a DIY kit) to $15,000 (for a highly qualified estate and tax specializing attorney).  I don't charge $15,000, but I agree with everything he said.  I think most people will see a DIY trust fail in its purpose, and that if you're going to bother with estate planning at all, you should see an attorney.

A family looking to set up a trust to protect their assets and their kids should expect to pay just a few thousand dollars.  A family with more complicated assets or a successful family business should expect to pay more and possibly set up more than just a trust.

To you family's health & prosperity,

Candice