Desert Estate Planning Law Blog : Palm Springs Estate Planning Lawyer & Attorney : Daryl Binkley Law Firm : Palm Desert, Indian Wells, Southern California

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.

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As I watched Dr. Andrew Weil's “Healthy Aging" DVD over the weekend I expected to hear tips on a healthy diet, exercise, maybe some recommendations on vitamins and/or supplements--but what really got my attention, being an estate planning lawyer, was his recommendation of an  ethical will  as "a gift of spiritual health." 

Unlike other estate planning documents that specify your wishes regarding your assets and medical decisions,  an ethical will refers to transferring your values, experiences and personal stories to your family or community.  It is an intimate and more personal document that doesn't have a legal standing, but in some circumstances it might even be more cherished by your loved ones.  

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I lived in San Francisco during the "Dot-Com" Bubble and Bust from 1998 to 2002--and even though that downturn was real and painful for all of us living in the Bay Area (and all those heavily invested in tech stocks)--it didn't affect everyone across the country as much as the present financial downturn.

Ever since that tech meltdown, I became interested in bubbles, how are they created and why. So when I recently read more of Robert Shiller's thoughts, a Yale professor who is given some credit for predicting both the tech and housing flameouts with unnerving accuracy I was interested to learn more about him, see the recent article about home prices in the U.S. 

On my list of books to read soon are the following books by Mr. Shiller, one published just before the tech meltdown and the other before the sub-prime mess morphed into a full-fledged global meltdown: "Irrational Exuberance" and "The Subprime Solution: How Today's Global Financial Crisis Happened and What to Do About It," respectively speaking. 

As bubbles tend to inflate our assets and the ensuing busts tend to painfully deflate our assets, during these challenging economic times it is good idea to re-evaluate your estate plan and see if you are employing the correct strategies to leave a legacy you want. In the recent article by Money Magazine  it was stated that "according to estimates by the Federal Reserve, average household net worth dropped nearly 23% from a survey period starting in May 2007 to October 2008". I would estimate that percentage is higher now, 8 months later.

So what does this mean for your estate plan? The article provides some great ideas but the main point is that this might be a good time to rethink, re-evaluate and talk to your estate planning attorney to ensure your legacy and wishes are protected.

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On a recommendation from my wife, I read a book by Daniel Pink, A Whole New Mind.  According to Mr. Pink, we live in a "Conceptual Age" and there are "six high-concept, high-touch senses" important now to the development of the "new mind." 

A couple that resonated with me especially was "story" and "meaning" (others are: design, symphony, empathy, and play).  While many things in the book resonated with me, these two really struck a cord with how I think about estate planning...

Every painting in my house has a story behind it. One is inherited from my grandmother, one from my great-aunt, some paintings were acquired on my trips to other states, and finally others in Europe.  My wife personally knows some of the artists, and knows where, when & why an artist painted a particular painting. Each of our paintings has a story, a sense of history---meaning.

Is there a story about your life, you would like your grandchildren to know about? Is there one lesson you would like to teach them? Is there a reason why you are leaving that house, a painting, an antique (or anything else) to a particular person? Is there a reason why you chose a certain charity, not the other? Is there an interesting story behind some your acquisitions?

At the end, we treasure our assets, but also as important, if not more important, are our stories, and experiences--our ability to give a sense of history.  Meaning of it all, in our own mind.

In my mind, estate planning can be, not just about transferring your money but more about your life, about your values and experiences. A written letter, audio CD or more elaborate video can be one intangible asset you leave (along with your estate plan) and the one that is treasured by your loved ones.

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As I was reading the latest news about the ongoing legal battles over the control of Phoebe Hearst Cooke's assets (estimated between $1.5 and $2 billion), I couldn't help but think that in so many ways her story, even though larger in scale and scope, might be the story of many families dealing with an aging parent.   Worries about whether there is elder abuse by a caregiver, or how assets and money are being managed, and if an outsider might easily take advantage or control of the elder person's assets--should be on the mind of many families, especially here in the desert with a population that tends to skew to the older age group. 

To briefly summarize recent events, as reported in a Los Angeles Times article--Phoebe Hearst Cooke, the granddaughter of publishing legend William Randolph Hearst, is at the center of legal actions filed by relatives who contend the 81-year-old no longer has the capacity to manage her own affairs.  Currently, the only daughter of the heiress--Phoebe "Misty" Lipari, 56--is one of the relatives seeking conservatorship for her mother.

Here are some of my thoughts and lessons on what can be learned from this case:  

• Include in your estate planning documents how a trustee is to be judged mentally competent.
• And there should be documents in place that specify to what affairs may an agent act--for example you may want to have different agents that act for health care issues from the agents that act for financial matters.
• In the case of a trust situation--there should be successor trustees that are nominated and can act in the case of incapacity by an elderly trust-maker.
• Put in place asset protection strategies--to protect beneficiaries at the time of the distribution of assets (such as in the case of a lawsuit or divorce).
• If charitable giving is part of your legacy, create endowment fund(s) for specific charities, with specific dollar amounts including your hopes and desires of how those funds are to be spent. For example, if a specific non-profit institution doesn't exist in 10 years, would you like those funds to be distributed to another charity with the same goal?
• Finally, a great idea for an elderly person, and maybe close family members, is to create a personal inventory of the things in their home, ideally through a trusted personal property appraiser. This step is an important one as it can serve as proof of important family heirlooms, antiques or paintings--especially if they are stolen or missing when elder abuse is suspected. Personal property appraisers can document and photograph the items--and assess potential value.  This way the family has some protection in place, and will know for sure if items are missing after the death of a relative--or during the incapacity. 

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I have missed blogging.  In the last few weeks, more than ever, there were so many topics I wanted to cover:  Heath Ledger's Oscar and who will get it in now, from a property ownership standpoint?  How creating a meaningful legacy versus just drafting trust documents is more and more important for baby boomers and how that might change the work of estate planning attorneys. 

But my day-to-day attorney work, ringing phone, many daily interruptions, attending events got the best of me lately.  I felt the void...all those thoughts, that would be great discussion points didn't translate into a blog posts. 
 
So it was opportune time that my wife  Ana (my marketing guru) forwarded me Seth Goden's blog   from 2 days ago where he celebrated his 3,000th blog post in a row.  He says "The hard part, as you can guess, is the first 2,500 posts. After that, momentum really starts to build."  
 
I know Seth is an author, and marketing guru, and I am an attorney--but his point is well taken.  Write about something interesting, encourage discussion and mostly do it consistently.  Point well taken.

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When you ask someone: "Do you have an estate plan?"  You get a myriad of answers, from the: 1) "Planner" types, that say "Definitely!" or 2) "Middle of the Road" types, "Well I have a will, that's an estate plan, right?" or 3) "Resistant" types, "What, do I look like a Rockefeller?"  And, of course, every imaginable response in between.

Well, everyone has an estate plan.  The issue is whether you have created an estate plan that maximizes your amount of control under the laws, or whether you let the government's default plan (generally termed probate) decide what happens to your assets. 

I have talked to many people--even those that have substantial assets--about estate planning and probate, with the following exchange occurring, almost verbatim, each time: 

I'll say, "Do you have an estate plan, or are you familiar with probate?" And the other person will respond, "Oh, I don't have to worry about probate, I have a will."  My response is invariably, "Well given the amount of assets in your estate, then you WILL go to probate.  Further "probate" essentially means to prove the documents (will)."  For example, in California if you are a single homeowner and you have a house titled in only your name, then most likely its gross value (not net equity) will trigger a probate.   (NOTE:  In California, a probate generally occurs when an estate has real and personal property with a combined value in excess of $100,000)

The point is that if you have not created an estate plan that directs how assets are to be transferred upon your death (i.e. through the use of a revocable living trust, or other planing device)--then the government has a plan for you.  So, you can call it a "Probate Plan," "A Plan for Probate," or "Just Plain Trouble."  Your loved ones and heirs will most likely call it a nightmare!

Some professionals attempt to define probate in terms everyone can understand. I will attempt to summarize these other definitions found in the Internet world--while trying to keep its somewhat humorous tone:  

A probate is a case you bring against yourself (your estate), 

With the costs coming out of your pocket (paid by your estate), and 

That provides arguably as much or more protection to creditors (people you owe money to at your death) and to "disgruntled" heirs (people you may be related to but may not really care about)-- 

When compared to the protection provided to the ones your really care about (true loved ones). 

If you have "no estate plan" then start your year off right and make a plan to do something--or when someone asks if you have an estate plan, you can at least sound somewhat knowledgeable as you say, "No, I have decided on a probate plan."

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Behind every estate plan are the lives of immediate family members, relatives, and friends.  The two words--"estate plan"--do not do justice to the emotional aspects and human lives that are affected by their instructions.  

Recently I was having a conversation with a personal property appraiser and she was sharing her interesting and colorful accounts of what it is like to perform an estate inventory.  Given her gift for storytelling, I figured she must also be a great writer--so I asked her, or I should say begged her to please write something I could post that sheds some light on performing a personal property appraisal, and the need for having your property inventoried when you set up an estate plan.

Suzanne Houck, a personal property appraiser in the Coachella Valley was generous to provide the following article to this blog:

As the third born of four children in our family I grew up well acquainted with sibling rivalry. Slammed doors, stolen clothes and bathroom takeovers were routine. Despite many utterances of “That’s mine” and “It’s my turn” to this day all our battles have been minor, and we would still choose each others company over anyone else. However, we have yet to deal as a family with the issue of division of property.

I am not really sure what my parents have done regarding estate planning. It is a topic occasionally brought up but never resolved.  Years ago when my parents went to China my mother said that she was going to put stickers on everything indicating who was to receive what. (She never did.) Without ever going to the house or discussing it with mom, I called my sister and jokingly told her how surprised I was that I had been left their most expensive painting.   Taking the bait she said she had no clue what I was talking about and quickly ended the conversation claiming she was off to lunch. That afternoon she called back and confessed that she had gone over to our parents at lunch but didn’t find any tagged property. I had a good laugh and confessed that I was teasing her and just wanted to see what she would do. Now, years later I wonder if that was just wishful thinking on my part. Since then I’ve spent fifteen years appraising personal property, and many times I’ve seen first hand the effect an unplanned estate can have on a family.

One memorable case occurred in Virginia in the early 1990’s. Formerly close siblings were no longer speaking as each accused the other of stealing from their parent’s estate. When I arrived to begin the onsite work I encountered lawyers and paralegals from both sides, not something that usually happened to me for ordinary estate tax appraisals. Even more unusual than that, though, was the fact that in a perceived effort to save the estate money the electricity and power had been turned off even though it was an unusually cold December.

One attorney informed me that if I discovered any important documents I was to alert him immediately. The opposing attorney insisted his paralegal spend the day by my side “helping me”. She lasted one hour and made excuses to leave. “And I thought being a paralegal was tedious.” She muttered to herself as she left.

Without removing my hat, coat and gloves I grabbed my flashlight and began inventorying room by room. I looked high and low in kitchen counters. I checked inside rusty tin cans and felt around the tips of well-used oven mitts. I checked the freezer. I looked under mattresses. With flashlight in hand I rummaged around the dark and damp basement. I checked all the usual places for hidden valuables but had not yet found anything worth singling out.

As I worked I overheard various versions of “Mom and Dad had to have more money than that.” From what I understood the heirs were convinced that their parents had more money concealed somewhere. It turns out they were right.

Resting against the wall at the end of the narrow hallway sat a Chippendale fall front desk. You have seen the type. They have a slanted front which folds down revealing a series of drawers and pigeonholes. These desks developed in the 18th century from designs by the English cabinetmaker Thomas Chippendale. As a self-contained “office” the desk was originally intended to be closed and positioned against a wall when not in use. The pigeonholes inside served as an early version of the filing cabinet. To accommodate clients with sensitive letters and documents the cabinetmaker would sometimes add hidden compartments.   (George Washington had one of these desks). The more money the client had the more elaborate the hidden compartments could be.

An initial search of the desk revealed the usual contents, pens, papers, clippings and photographs. “Anything?”, someone asked as they walked by. “Not yet.” I answered.

The desk I was examining was a twentieth-century reproduction but even so I had seen enough of them to know that they often had some kind of secret area.  These are the little details that keep appraisers on their toes.  I was not disappointed. When I gently pulled at the base of the carved column mounted next to the central pigeonhole it moved slightly. With a little coaxing I was able to pull out a vertical storage area. I saw right away what was preventing the “drawer” from sliding easily. It was stuffed with envelopes. Each was stamped and pre-addressed to David Koresh, Branch Davidians in Waco, Texas. Inside every one of them was a signed check, dated chronologically over the upcoming year and made out to David Koresh.  The attorneys were nonplussed. The heirs were stunned. 

Maybe if the kids had spent more time with their parents and less time bickering they would have been more aware of their parents’ beliefs and priorities. Maybe they could have discussed it. The parents had given plenty of thought to their eternal state just none to their worldly estate.   My parents will be spending Christmas with us this year. I plan to have “the discussion”.

Thank you Suzanne for the interesting and compelling accounts that put the emotional aspects and lives behind estate planning in perspective.

Suzanne Houck has been a personal property appraiser for over fifteen years.  She has studied with Sotheby's London and been certified as an appraiser through the International Society of Appraisers.  She has recently added detailed Home Inventories to her services. Her contact number is 760.668.4445.

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The revocable living trust is a great way to avoid probate.  Probate involves unnecessary costs, delays for distributions, and potentially the loss of otherwise private information. Generally speaking, the revocable trust escapes probate and it works so well that some might think it must be voodoo or black magic. 

Sadly, some people believe that "trusts" are for the rich, you know something only the Rockefeller's and Carnegie's of this world need. 

However, in California a probate is triggered at a person's death when they own a combined total of qualifying real and personal property worth over $100,000. Sure property values in the Desert have been headed lower in recent times, but, there are a lot of homes worth over $100,000 that are not owned by the Rockefeller or Carnegie types.

I would say many home owners in the Desert have real property that is worth over $100,000, and that's before adding personal property to the overall estate value.  So probate avoidance can benefit many homeowners (clearly the average owners of real property in the Desert)--and thus a revocable living trust is a great option for homeowners.   

But some might also think that a revocable living trust is something that will complicate their lives too much, and so it is easier to be an ostrich with their head in the ground. Of course an ostrich with its head in the ground is pretty exposed elsewhere.

In general terms, a trust is merely a legal device to hold your assets so they can be transferred without the need for a probate upon your death. There is no magic involved, but it is advisable to have a competent attorney draft the provisions of a trust to fit your own needs. 

But once your trust is created, your life will not cease to exist as you know it! 

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