Oregon Estate + Business Planning Blog

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:

A Year to Live - How would you prepare?

 

I am reading this book right now called A Year to Live, by Stephen Levine.  It has raised a lot of questions and insights for me.  Many of them are about estate planning.  Many of them are about life in general.

One of the exercises the author has the reader do is simply make a list of what you'd do if you found out today that you have a year to live.  The author seems to think that it can feel freeing for people because they finally feel entitled to live the life that they want to live.  To imagine that you have a year to live is like metaphorically dying, and allows you to realize what you want and have a rebirth and live your life in a new way. 

As a parent, I am getting something a little bit different from the book.  I have a 10-year-old daughter and a 2-year-old daughter, so I wouldn't feel so free.  I would feel devastated and sad for my family.  I think my list would look a little different than a list would look for someone with grown kids or no kids at all.  It wouldn't be so much about things I always wanted to do, but more about how I can make things easy on my kids and really be able to completely enjoy my family for my last year.  Mentally and emotionally going through the act of dying, it is so clear what needs to be done!  After going through my list and preparing for my death, I can be free to live the life I really want to live!

At the top of my list would be making sure the transition after my death would be as smooth as possible for my kids.  It made me think about the type of estate planning I'd want to do.  If I was a parent who hadn't done any estate planning, I doubt I would be using a DIY kit or calling a bunch of lawyers and going for the cheapest rate.  I would be asking questions like, "What will happen to my kids if I collapse at the grocery store?" and "What if I'm incapacitated in the hospital for a long time before my death?" and "How will my loved ones have access to my assets?" and "Will you be there for my family when I can't be?"  I would be communicating with my chosen guardians and getting everyone on the same page.  I would be communicating my healthcare wishes.  I would be writing letters to my kids and spouse and guardians that they could read after my death.  I'd want everything to be as smooth as possible, and I'd want to make sure that I left behind my values and everything I wanted to say to my loved ones.  I'd want to know that everyone would be cared for financially.  (Hopefully I already have life insurance, since I wouldn't be able to get it with a one-year-to-live diagnosis.)

On a more personal note, I wouldn't waste one second with any fights or struggles with my spouse or kids.  I would say yes a lot more.  Yes, I'll take you to the park.  Yes, you can stay up late and watch a movie with us.  Yes, you can have ice cream.  I'd laugh a lot more, smile a lot more, cuddle a lot more.  I'd be outside a lot more.  I'd take the kids to Disneyland.  I'd try to experience life a lot more with my family.  I'd want to have more picnics, more hikes, more sunsets and sunrises.

So what about you?  What would you do if you found out you had a year to live?

To your family's health & prosperity,

Candice

My assistant was laughing at me!

My assistant was in my office the other day for a meeting, when all of a sudden, she burst out laughing!

She said, "Why do you have 'The Complete Idiot's Guide to Wills and Estates'?  Bwa-ha-ha!"  We went through a whole pretend scenario where a client comes in and asks me a question and I consult the book for the answer.  It was pretty funny, especially considering that I'm a member of WealthCounsel, which boasts some of the best minds in estate planning in the country.  We also laughed about a book I have called, How Lawyers Screw Their Clients.  (I really wanted to know!)

I actually started to collect estate planning books that I find at yard sales and thrift stores.  (Thrifting is one of my deep burning passions!)  I've read them all because I want to know what my clients are thinking when they come to see me.  Most, if not all, of my clients have done at least some light research on estate planning before they come to see me.  Some of the books are awful!  (Especially the ones that give people the idea that all they need is a will, and then everything is hunky dorey!)  Some of the books, I lend out to clients if I feel that they will help the client learn more.  The Living Trust, by Henry Abts, is one I frequently recommend.  I also recommend Ethical Wills, by Barry Baines, which is the book that gave me the idea for creating my Life LettersTM program.  More recently, I've begun to recommend Wear Clean Underwear, by Alexis Martin Neely, which shows parents what can happen if they don't properly plan their estates.

Anyway, maybe I'll move my little library so clients don't get the wrong idea.  But, I think it's good lawyering to try to understand your clients and to see what information they are seeing before they come to see you.

Wear Clean Underwear - Book Recommendation for My Clients and Friends

 

I recommend the book Wear Clean Underwear, by Alexis Martin Neely, to anyone who is a parent.  It's sort of a scary introduction to estate planning, but a lot of parents need to hear the truth.  Most parents think that they can put off estate planning, and the book does a good job of presenting scenarios that could happen to your family if you put it off.  Considering that over half of adults don't even have a will, this is pretty alarming stuff.

The book is not a manual or how-to book about estate planning.  The purpose is mainly to show you why you need estate planning. 

The Total Money Makeover - Book Recommendation for My Clients and Friends

 

I talked about this book in my last post, but not enough!  I really highly recommend Dave Ramsey's Total Money Makeover for anyone who has any amount of debt looming over their heads or anyone who hasn't begun saving for retirement or college yet.  I personally have a lot of student loan debt and business debt, so I know how scary it can be to think too much about it.  I've ignored it to the point of thinking that I'm not stressed about it, only to wake up at 3 a.m. in a panic.  I know I'm not the only one.  Many people are just one illness, accident, or job loss away from failing to make a payment on their home mortgage or student loan.  Wouldn't it feel good to complete a program that helps you to "snowball" your debt, freeing you once and for all?  One of my goals for 2009 is to really tackle my debt, not continue to pay the minimum and wake up stressed every night.  The plan does involve eliminating unecessary expenses, selling stuff you don't use, and living like a pauper for a while, so don't expect a magic cure.  But it will feel really good once the debt is gone and you can pay for things with money you have and not money you hope to earn later.

Putting off planning in a bad economy = bad idea!

I just read a disturbing new article that said this: "A down economy means fewer consumers will create estate plans and living trusts, putting families at even greater risk of facing significant expenses associated with the lengthy probate process[.]"  Can you imagine your spouse dying during this tough economy and leaving you with an estate that has to go through probate?  Attorneys, accountants, all these people that have to be paid!  Not only that, but: "In many probate matters, the final outcome includes forced sales of property. This scenario is worsened in a down economy when property values are at their lowest[.]" 

This all sort of goes along with what I've been reading in The Total Money Makeover, by Dave Ramsey.  (I'm thinking of starting a strict budget and getting rid of my student loans as a New Year's resolution.)  I was surprised that one of the first things that Dave recommends you do is estate planning.  He says that he doesn't understand all of the fretting over estate planning, that it is "a gift you leave to your family and loved ones." 

The only thing I'd really add to that is that you should make sure that you are getting an estate plan that is going to work for you and your family, and don't think of it as a one-time shot.  Find an attorney that you can work with for life, that will be there for your family when you can't be.

To your family's health and prosperity,

Candice

Should everyone have a trust?

I read a Q&A today in which someone asked a trust officer whether there are some people who should not have a trust.  The officer went over the pros and cons, and I thought I'd share some with you here.

The biggest pro is that anything in a trust avoids probate.  This means that you avoid probate costs and time delays, and that you can maintain the privacy of your assets.  An estate whose assets are entirely in a trust can be settled in about an hour in the privacy of your attorney's office.

The biggest con is that a trust requires some maintenance.  They can be expensive to set up, although they are generally affordable for most families.  (Many attorneys offer flat rates and payment plans!)  You have to make sure that assets are titled properly and that the trust is actually funded, but your attorney can help you with this.

A really great book that explains the Living Trust in English (as opposed to Legalese) is The Living Trust, by Henry W. Abts, III.  If you're interested in using a trust as an estate planning or asset management tool, but are not quite sure yet, I'd check it out.