Family Heirlooms, a Sticky Situation

Whether family jewelry is passed down from one generation to another, a painting, heirloom or other memorabilia--sometime these items have more significance and emotional weight to your family than some of the larger assets such as stocks and bonds, and can create a larger fight between your loved ones.

More recent family drama over Robin Williams illustrates this point. According to the recent Curbed SF article: "About 300 personal items from the late actor's estate—clothing and books, as well as some artwork—are currently at the center of a legal battle between Williams' children and Susan Williams; a San Francisco Superior Court judge has given the two sides until July 29 to sort things out."

More details regarding this legal battle over their estate can be found in this article .

While protecting large assets, such as real estate and other sizable stock accounts is a main objective of a comprehensive estate plan, it's important to think of who will inherit your family heirlooms. In your estate plan you can specifically list which loved ones will receive which items of personal property to avoid such bitter family disputes.  

It is better to make to these decisions for your relatives, then forcing them to fight out the unknown and build up hatred to each other.  If you designate in your estate plan, then your loved ones have to accept those are your wishes (and not fight amongst each other).



Seniors and mounting debt

Even though stock and real estate prices seem to be going higher, which definitely helps overall investors, the recent low interest rates, rising inflation and increased healthcare/long term care expenses seem to be hurting one particular group badly, our seniors.  In my law practice I have personally seen how variety factors are forcing seniors to use their credit cards to supplement their income. The same factor which allows for a very low mortgage loan rates, is limiting income on bonds and CDs- both sources of income for seniors.  If you add inflation and rising healthcare expenses on top of it, seniors are feeling this financial crunch.   
This article by CNN  provides some insightful data to shed the light on this issue.  In particular these two specific points caught my eye:
· The average debt held by senior citizens has ballooned to $50,000 in 2010, up 83% since 2001, according to Federal Reserve data crunched by the Employee Benefit Research Institute.
· Only 24% of homeowners over the age of 62 had mortgage debt in 1992, but that figure soared to 45% in 2010.
Given these facts,  it is not surprising that senior citizens comprise growing demographic of bankruptcy filers as stated in a recent study by the University of Michigan, which found that baby boomers are the fastest growing age group filing for bankruptcy. Another study, conducted by Financial Engines revealed that nearly half of all baby boomers fear they will be in the poor house after retirement. 
 In 2010, seven percent of all bankruptcy filers were over the age of 65. That’s up from just two percent a decade ago. For the 55-and-up age bracket, that number balloons to 22 percent of all bankruptcy filings nationwide.

Property Ownership and Your Estate Plan

When planning your estate, you must consider how you hold title to your real and personal property. The title and your designated beneficiaries will control how your real estate, bank accounts, retirement accounts, vehicles and investments are distributed upon your death, regardless of whether there is a will or trust in place and potentially with a result that you never intended.

One of the most important steps in establishing your estate plan is transferring title to your assets. If you have created a living trust, it is absolutely useless if you fail to transfer the title on your accounts, real estate or other property into the trust. Unless the assets are formally transferred into your living trust, they will not be subject to the terms of the trust and will be subject to probate.

Even if you don’t have a living trust, how you hold title to your property can still help your heirs avoid probate altogether. This ensures that your assets can be quickly transferred to the beneficiaries, and saves them the time and expense of a probate proceeding. Listed below are three of the most common ways to hold title to property; each has its advantages and drawbacks, depending on your personal situation.

Tenants in Common: When two or more individuals each own an undivided share of the property, it is known as a tenancy in common. Each co-tenant can transfer or sell his or her interest in the property without the consent of the co-tenants. In a tenancy in common, a deceased owner’s interest in the property continues after death and is distributed to the decedent’s heirs. Property titled in this manner is subject to probate, unless it is held in a living trust, but it enables you to leave your interest in the property to your own heirs rather than the property’s co-owners.

Joint Tenants: In joint tenancy, two or more owners share a whole, undivided interest with right of survivorship. Upon the death of a joint tenant, the surviving joint tenants immediately become the owners of the entire property. The decedent’s interest in the property does not pass to his or her beneficiaries, regardless of any provisions in a living trust or will. A major advantage of joint tenancy is that a deceased joint tenant’s interest in the property passes to the surviving joint tenants without the asset going through probate. Joint tenancy has its disadvantages, too. Property owned in this manner can be attached by the creditors of any joint tenant, which could result in significant losses to the other joint tenants. Additionally, a joint tenant’s interest in the property cannot be sold or transferred without the consent of the other joint tenants.

Community Property with Right of Survivorship: Some states allow married couples to take title in this manner. When property is held this way, a surviving spouse automatically inherits the decedent’s interest in the property, without probate.

Make sure your estate planning attorney has a list of all of your property and exactly how you hold title to each asset, as this will directly affect how your property is distributed after you pass on. Automatic rules governing survivorship will control how property is distributed, regardless of what is stated in your will or living trust.


Save your family from a treasure hunt

Very frequently I receive calls from people who are trying to locate a will or trust of their parent or loved one(s) who just passed away. They are not able to locate any trust documents or have any information about the attorney who created it. Once, after doing some research for a particular family, I found out that the attorney who created a trust had passed away before his client (then there was the job of finding where the deceased attorney's files went).

There are numerous cases of "lost wills." My personal favorite is digging around a person's property after they passed away, looking for a will that was supposedly buried in a container. Maybe a myth or legend, but it sets a graphic image.

Just this week I have a received a few phone calls about this exact issue. Families were trying to locate local attorneys who worked on trusts for loved ones by calling every attorney in the area. These random inquiries from other lawyers or loved ones make me think this is a problem for many people, or it might be down the road.

So what are some possible solutions for this problem? The following are tips to ensure that you or your loved ones do not fall into the abyss of lost documents:

Tips for Couples or Individuals Creating a Trust

  • Give basic information that you created a trust to at least one or some of your loved ones. If you feel comfortable you might want to let them know of your wishes, desires and reasons why you made specific decisions about your assets.
  • If your beneficiaries are also trustees, provide them with information on where the trust is located (especially if it is locked in the safety deposit box) and information on what they need to do if something is to happen to them. Also provide them with the contact information or business card to your attorney that drafted the trust. You might want to give a copy set to your trustee so they know all the details. Attorneys will have copies of client trusts in their files as well.
  • If you don’t want your kids or beneficiaries to know the exact location of your trust or what the contents of the trust are, at least ensure they have contact information for the attorney that created the trust. Without this basic information, your kids /beneficiaries might be calling every attorney in the area trying to find this information. Or worse, they may need to pay another attorney to help them with this search.

Tips for Beneficiaries/Trustees of a Trust:

  • Have a heart-to-heart talk with your parents or loved ones about their wishes and desires on how things should be handled in the case they are not around. If your parents don’t have any legal documents set up about their health care decisions and assets, you may want to suggest that they seek an estate planning attorney. Ask your friends and/or professional advisors for references or recommendations.

  • If you know that your parent(s), loved one(s), or partner(s) have created a trust and that you are a beneficiary, ask them for the attorney contact information.

  • If your loved ones are comfortable with it, they might even tell you where their estate planning documents are stored or even give you a copy of it.


Essential Legal Documents Everyone Should Have


Are there any essential legal documents everyone should have regardless of how much money or assets they have?  Answer is, definite yes.  These documents clarify who will be in charge in case of your incapacity, and what will happen after your death.  Also if you a parent, having a guardian instructions is very important.  Here is the quick list of documents that you should consider.

Essential Legal Documents


· Power of Attorney: In case of your incapacity, you can assign someone to act on your behalf for your financial or other accounts. This document can authorize someone you trust to pay your bills, take care of your utilities and any other financial affairs.

· Healthcare documents: These documents designate your wishes for the end of life procedures (think of the Terri Schiavo case). Also, these designate who gets your healthcare documents, or who can make health decisions for you. These documents include:

    1. California Advance Healthcare
    2. Living Will
    3. HIPAA

· Will and/or Trust: In case something happens to you, a Will or Trust designates who will be an executor or trustee of the estate, and how your assets are distributed. Talk to your attorney to find out whether a Will or Trust best suits your needs. I am a big proponent of a Trust as it avoids probate (you can read more about this topic here). A Trust Package plan should also include a Pour-over-Will and all of the other documents mentioned. It is best to discuss your personal situation with a trusted attorney.

· Guardian Instructions: If you are the parent of a child under 18 years old, creating guardian instructions is very important to ensure people you trust to take care of your child in case something happens to you. You can also include specific instructions about your views on education, religion or any other matters, such as medical conditions or food allergies.

Also, I added a few items (not legal documents) that are good to review every year to ensure they reflect your wishes.

Additional Items to Review:


It is a great idea to review beneficiary designation forms from time to time to be sure they reflect your current wishes. If you were recently married, divorced or had more children, look into the following policies/plans to verify they reflect your wishes.


· Beneficiary designation(s) on your life insurance policy

· Beneficiary designation(s) on your retirement plans

· Beneficiary designation(s) on your investments accounts

Great Resource for estate planning questions:

October is here and and this year has been busy, busy, busy.   

Given the limited time that I had to devote to writing, I am especially thankful to for including two of my articles on their site.  I highly recommend as your resource for any estate planning questions.  Their articles and tips can help you with  most common questions and concerns around trusts, wills and all those family related questions that might arise around estate planning .   
Two of my articles included on their site point to some of the most common questions I get in my office.  One is is about lost Wills, Trusts: "Save Your Family from a Treasure Hunt" and another one is about probate: "If you can find a way to avoid probate, do so" .  Hope you find them useful.

Great Reads on Productivity and Habits

Busy, busy month…. While I may have not been able to blog each week, I have still been reading a book every week. In this blog, I have decided to cover three books, ….great for anyone wanting to improve productivity and habits. 

“Self Leadership and the One Minute Manager” by Ken Blanchard

Ken Blanchard uses a fictional story telling format in this book to make his points and to make the content more palatable to a broader audience that might like a fictional story, loosely hiding its educational points. The story begins with its main character pitching an important client and failing in this task. Immediately afterward, he questions his managing abilities. About the time he believes all his lost, he sees a children’s magician—and ultimately, the two start a mentor/mentee relationship, in which she brings him back from the brink. She takes him through tasks that force him to discover ,for himself, how to become a better manager.

This book is an enjoyable quick read, and ideally suited for managers of any size organization.   I don’t know that it is essential for a start-up entrepreneur, but as any organization grows, those that manage others will benefit from the lessons of this book. I think my favorite part of the book is the “discovery” of the “development continuum” which “is simply a model of four stages people usually experience when they are learning to master something.”   The magician and manager relationship reminded me of the Jedi/Student relationship in the Star Wars movies.

“Getting Things Done: The Art of Stress-Free Productivity” by David Allen

David Allen opens his book with an ambitious offer: “Welcome to a gold mine of insights into strategies for how to have more energy, be more relaxed, and get a lot more accomplished with much less effort.” He also states his reason for this book: “Teaching you how to be maximally efficient and relaxed, whenever you need or want to be.”

I believe he delivers on his promise, and for the most part he is not dependent (or dare I say an advocate) of overly technical solutions to project/life management. An example is the following: “If I had to set up an emergency workstation in just a few minutes, I would buy a door, put It on two two-drawer filing cabinets (one at each end), place three stack-baskets on it and add a legal pad and pen. That would be my home base (if I had time to sit down, I’d also buy a stool!). Believe it or not, I’ve been in several executive offices that wouldn’t be as functional.” 

Ultimately, everyone, everyday is bombarded with numerous tasks, jobs, distractions, and/or action items, and his ideas create methods to bring order to chaos—and to organize “stuff” (see definition in his book) in the most efficient and practical way. 

Warning: He acknowledges that his first step of the “collection process” can take six hours or more. For many entrepreneurs, it probably could take easily, two full days. 

Initially I thought this book might be about comprehensive to-do lists, and interestingly enough, Mr. Allen does not really advocate to-do lists per se (I had the same thought about the book I read a few weeks ago, Checklist Manifesto, which is not about to-do list either).  

I highly recommend this book and will be reading it again (hopefully, my wife will read also). As a family, we can then fully implement all of its strategies in our business and personal lives.

“The Power of Habit: Why We Do What We Do in Life and Business” by Charles Duhigg.

 After reading the book, I definitely have a better understanding of how habits work, and as the author believes: “simply understanding how habits work—learning the structure of the habit loop—makes them easier to control. Once you break a habit into its components, you can fiddle with the gears.”

This book provides many interesting insights into habits. For example, “Habits never really disappear. They’re encoded into the structure of our brain.” In fact, this truth inspires the author to state the following: “The Golden Rule of Habit Change: You Can’t Extinguish a Bad Habit, You can Only Change It.”

As controlling as habits are, the structure of the “habit loop” is relatively simple: you have a cue, followed by a routine, and then a reward. It is a loop because when the cue occurs again, it will then trigger the same routine and reward.  The book goes over many different examples of these habit loops, and while the activities involved can be complex, the basic structure of the habit loop is, as stated, relatively simple.

I think the book would be well served to include some expanded chapters on how to deal with (or change) specific habits (maybe smoking, overeating, etc)—which would provide insight into all types of ways to change habits. But, maybe that will be the next edition. 

As People Live Longer, End of Life Decisions Become More Important

So much progress has been made in healthcare and medical industry that now people live longer and longer. But living longer is not the same as living better. As Peter Saul points out in this TED talk, it is more important now to make those life-end decisions so our opinions matter when, in those last months or days, we can no longer make them for ourselves. By making these decisions, we are defining, for ourselves and others, what meaningful life represents to us and letting those around us know how we feel emotionally, mentally, spiritually.   

Over year ago, I heard Bill Bradley’s speech at the Desert Town Hall in Indian Wells and among many interesting things he mentioned that night, one fact stayed with me. He said, states would save between $35-$65K/per person if everyone would make some of these life-end decisions ahead of time specifically, by creating a Living Will and Advance Health Care Directive.

If you currently do not have these documents in place, I strongly encourage you to consider them. The following Healthcare documents designate your wishes for the end of life procedures (think of the Terri Schiavo case). Also, these designate who gets your healthcare documents, or who can make health decisions for you. These documents include:


    1. CA Advance Healthcare  (Healthcare Power of Attorney)
    2. Living Will
    3. HIPAA

In addition to these directives, you may also consider other essential legal documents listed below:

·     Power of Attorney: In case of your incapacity, you can assign someone to act on your behalf for your financial or other accounts.  This document can authorize someone you trust to pay your bills, take care of your utilities and any other financial affairs.

·     Will and/or Trust: In case something happens to you, a Will or Trust designates who will be an executor or trustee of the estate, and how your assets are distributed. Talk to your attorney to find out whether a Will or Trust best suits your needs.  I am a big proponent of a Trust, as it avoids probate (read more about this topic here). A Trust should also include a Pour-Over-Will, and all of the other documents mentioned above. It is best to discuss your personal situation with a trusted and reliable attorney.

·     Guardian Instructions: If you are the parent of a child under 18 years old, creating guardian instructions is very important. This ensures people you trust to take care of your child in case something happens to you. You can also include specific instructions about your views on education, religion or any other matters, such as medical conditions or food allergies. 

It is often tough to think about these decisions, but I encourage you to do so. As Peter Saul points out, making these decisions shows that you matter, that your life matters.  

Book of the Week: "Quiet" by Susan Cain

I give “Quiet” a loud recommendation as a Must-Read for parents of an introvert

The full title of this week’s book by author Susan Cain is: “Quiet: The Power of Introverts in a World that Can’t Stop Talking.” This book delves deeply into the various traits, characteristics, behaviors, successes and anything else you can imagine about introverts, and introversion more generally. The author proclaims: "today introversion and extroversion are two of the most exhaustively researched subjects in personality psychology, arousing the curiosity of hundreds of scientists.” 

Reading this book reminded me of my undergraduate classes in social psychology at UC Berkeley, and I thoroughly enjoyed how Susan Cain has brought the academics of introversion/extroversion to real-life experiences focusing her attention on many of the ways introverts succeed in all walks of life (even when extroversion became the “cultural ideal” of modern America).

The author relates how Dale Carnegie, the author of the book “Public Speaking: How to Win Friends and Influence Others” had a “metamorphosis from farmboy to salesman to public-speaking icon is also the story of the rise of the Extrovert Ideal.” Essentially, the industrial revolution that started in the early 1900’s and continued through much of the century created this American culture of the “Extrovert Ideal,” whereby “Americans responded to these pressures by trying to become salesman who could sell not only their company’s latest gizmo but also themselves.” 

The author found that at Harvard Business School, extroversion is almost at the base or foundation of the institution. Where one Harvard Business School Grad terms the school the “Spiritual Capital of Extroversion” and another student saying to the author: “Good luck finding an introvert around here…” and yet another saying “This school is predicated on extroversion…Your grades and social status depends on it. It’s just the norm here.”

Without spending too much time on this part of the book, suffice it to say that “Contrary to the Harvard Business School model of vocal leadership, the ranks of effective CEOs turn out to be filled with introverts: including Charles Schwab; Brenda Barnes, CEO of Sara Lee; and James Copeland, former CEO of Deloitte Touche Tohmatsu.” She continues on this theme by discussing Jim Collin’s “Level 5 Leaders” from the book “Good to Great”—another book I highly recommend and plan to read again later this year.

Without giving away everything, I will just say that I was intrigued at why “introverts are uniquely good at leading initiative takers” whereas extroverted leaders may need to adopt a style that is more reserved—to achieve the best results with employees that are initiative takers.

There are so many great stories in this book, and I believe it is especially good for parents, regardless of whether they believe their child/children may be introverted or extroverted—and I would say a MUST READ for parents that know they have a child (or children) that are introverted. Some researchers have an “Orchid Child” hypothesis whereby they believe introvert children may require a somewhat more complex and supportive family environment (think the delicate nature of the orchid), but the results of this upbringing may create a caring, compassionate and “Thinking” person (and sometimes more immune to colds and respiratory illnesses) that is nothing short of an amazing person (think the exotic beauty that is the orchid).

Initially I was a bit skeptical when I downloaded this book. I didn’t know anything about it—I thought I could be in for a real boring read—introverts and “Quiet”! However I found this book to be a fascinating read. Now a quick disclaimer: I don’t know if extroverts will really enjoy it as much as an introvert (remember that introversion/extroversion is really just a spectrum of behavior on a single continuum), but given its broad range of topics (including the ability of Introverts to “act” like Extroverts under the terminology of “Free Trait” behavior)—I believe that anyone, regardless of where they are on the introvert/extrovert spectrum, will learn something from this book, and hopefully truly enjoy reading it, too.

When Should You Update Your Estate Plan?

One of the most frequently asked questions I get is this one:

"I had my estate plan done many years ago, so when and how often should I update it?" This is a great question!

I say great question because like you, your trust documents should change as you grow, and as your life circumstances change. You should think of your trust documents as living documents that should reflect you and your life as you age. You may have more children, grand-children, get divorced, re-married, buy more real estate, start a business or win the lottery (one of my clients won, so it happens)!

As you age, your wishes as to who you want to receive your house, your beloved art collection, etc., might change as well.

 The following are guidelines as to whether your estate plan needs updating:

  • Did you or any of your beneficiaries get married, divorced, have more children, etc.? In other words, did your life circumstances change?
  • Did you recently retire? Or did you have any health disability or issues?
  • Did you move from one state to another, or acquire real estate in a new state where you plan to live part-time?
  • Did your assets or income change? For example, did you acquire or sell new real property, become beneficiary of a large inheritance, etc.?
  • Did you start a new business? And are others involved?

In any case, a good rule of thumb is to touch base with your estate planning attorney every few years to see if a little updating of your trust is in order.