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

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.

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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.

· 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.

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

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

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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.  

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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. 

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I have read that approximately 60% of people never do any estate planning-no Will, no Trust, no healthcare directive. Just think about the Terri Schiavo case, and how the lack of any healthcare directive can cause confusion and conflict in a family. Various statistics say that people spend more time planning a vacation or birthday party and definitely more time watching television, than thinking about what would happen if they are incapacitated or worse, not around anymore. Thinking about our own mortality is not fun (for most of us at least), and decisions about your own affairs can be very daunting. Also, if you are in the small group of people who are self-employed, there is another layer of complexity—what happens to your business if you die? 

Are things set-up so your business can operate without you? Are managers in place to operate your company?  Are they aware of your wishes as to how the company should go on? Do you care if your business is immediately sold, or do you want your company and legacy to continue on?

Business can, at times, be the most valuable and the most vulnerable asset you leave for you loved ones-therefore the hardest one to manage and maintain. 

One of the major breaking news stories yesterday, was the merger between two local television stations, KPSP Local 2 and KSEQ 3.  

In a statement posted to KESQ's website, Jim Houston said, "KPSP was a labor of love for my wife Jackie Lee Houston. In addition to its excellent local news commitment, the station has made a tremendous contribution to the non-profit community of the Coachella Valley. With her passing, we have now made the difficult decision to find a new owner for our television operation. While a number of options were carefully considered, a merger with the Bradley family, owners of Gulf-California (KESQ-TV) was ultimately chosen as the best opportunity.”

From the statement above, it is clear that Mrs. Houston’s passing played a role in KPSP Local 2 being sold at this time. From my understanding, KPSP will operate as a separate station, but due to this merger, structural changes have been made and many people have lost their jobs. 

Clearly, some decisions will need to be made about your business, if you are not around, so here are some things to consider long-term:

·         Can your business operate without you at this very moment? Can it ever operate without you? If yes, who can run it for you?

·         Who would you assign as manager? What direction(s) would that person need in order to run the company as you do?

·         Are you opposed to mergers or your company being liquidated? If yes, what would you like to occur?

For many entrepreneurs, their business is their baby. In that case, considering a few of these questions is a worthy pursuit.

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In life some things are easier to share than others. If you recently got engaged, married, had a baby, got a promotion or landed a great gig – sharing the news is exciting. You want the world to know.

Your estate plan is different—you don’t want the world to know your wishes (generally while you are alive this is to remain confidential). However, you do not want to be so private about your affairs that no one ever finds out about them (i.e. people digging your backyard to find your will or trust). Thus at some point you do want your affairs to be administered in the way that you direct them to be via proper legal documents.

Most people tend to delay making decisions about their financial affairs or what happens in case of their (gasp) death  even if their internal family dynamic is peaceful and distribution fairly straight-forward (for example, couple has only one child that will inherit everything). If no planning is done, the government has a plan for you it is called probate (you can read about it here).

Planning can be especially important if you don’t have children of your own and if you are not married (or have a domestic partner). The best planning you can do is by having the proper estate planning documents signed in front of witnesses, notary and documents drafted by an attorney, who becomes a trusted counselor. If not done properly or at all, various family members might argue, rightly or wrongly so, that they should be a beneficiary of your estate. Having an attorney draft your estate plan is critically important so that later your family can turn to someone who knew your wishes and can answer questions about your estate. Also, having an attorney allows for this process to stay private and takes the guesswork, confusion for your family and loved ones.  If done properly, estate planning documents can save your loved ones from the probate court and the potential of a lengthy litigation (where beneficiaries can try to interpret your wishes).  

The probate court has many cases when a person without children or spouse/partner suddenly, late in life, wills everything to someone who is not a family member or was unknown to the closest relatives.  Wills in those cases were handwritten, not drafted by attorney, raising suspicions about validity of the Will.  Leaving the estate to a friend or a charity is a perfectly fine choice however,  having an attorney draft those documents, having those documents signed in front of impartial witnesses provide a sense of security that these were truly your wishes. Also attorneys generally hold onto the original Will and give clients a conformed copy—this is to ensure no additional pages are added and that the Original Will is not altered in any way.

Proper planning is a smart choice regardless of how simple or complex your estate or family situation might be, but particularly important for people who are single, without children or immediate family close by to ensure there is no abuse or any fraudulent activity going on. Letting the right people know (your family and attorney) about your wishes should let you sleep peacefully at night.

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As we approach 2012, it is a great time to look back, see how much we have accomplished in 2011, and set our goals for the New Year.  This time of year is when many of us start writing New Year resolutions to set the tone for what to expect of ourselves.  At times, these resolutions can be a long list of to-do items that can overwhelm rather than inspire. So, for me the trick has always been to add some fun items. 

Every year, in addition to my professional and personal goals, I try to add a few fun things like playing tennis or travel to a new destination to keep me going.  My wife, Ana, for example creates a separate list of mostly fun items that you can see below (surprisingly, she added rising at 5 AM here too, hmmm?)

Over the years, I have noticed that in December, most people tend to review with me their existing legal documents or plan to see me in January to start something new.  So, I thought it would be great to share with you an essential list of legal documents everyone should have, regardless of how much money or assets they have.  Also, I added a few items (not legal documents) that are good to review every year to ensure they reflect your wishes. 

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. CA 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. 

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 

You may consider adding a few of these recommendations to your New Year resolutions. It will give you peace of mind that you took care of some essentials.  

Wishing you a happy, healthy and prosperous 2012!

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I hope you had a nice Thanksgiving holiday whether it was with family, friends or some R&R alone. I spent mine with my family and mom, here in the Desert, amazed at the gorgeous weather we had that day. You can see the picture of my daughter and me on a boat ride we took at the Desert Marriot during the Thanksgiving break. I love Thanksgiving as we really tend to focus on what’s the most important to us - simple joys of being around your loved ones and remembering all those things we are grateful for.  

As I had a bit more time Thanksgiving morning, I briefly looked over news sites and found quite a few articles mentioning Steve Jobs. His legacy and impact is certainly felt in a way we do things every day. I am able to write this, listen to music, watch movies and let my daughter play piano on a device he created. But the article that caught my eye was not about Steve Jobs & Apple –it was about Steve Jobs’ $4.6B in Disney shares. It was announced in this brief article $4.6 billion worth of shares in The Walt Disney Co. are now in a trust run by his wife, Laurene Powell Jobs. 

Back in October 2011, Forbes Magazine stated Steve Jobs has most likely protected his estate with a living trust, but the extent of all of his planning is most likely to stay private as living trusts provide privacy protection (another strong advantage of the trust).

Use of a living trust to carry stock or financial accounts might have made news in Steve Jobs case, given the celebrity status and the sizeable amount but it is frequently used as an estate planning tool. You certainly don’t need to own millions in stock accounts to use this tool to protect you from probate court. 

Over the last few years, I have seen that this time of the year people start to think about creating a trust or restating the one they currently have to better reflect their situation. If you own stocks at this time, or a sizeable amount in financial accounts, you might want to consider putting them in the name of the trust. Check with your financial advisor as to how your account is titled and then, if appropriate, ask for recommendations on how to go about creating a trust. You can read about the advantages of creating a living trust here.

Have a great week everyone!

Daryl

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Happy New Year Everyone!

The "New Year" always signifies a new beginning, start of something new and for me that feeling of renewed energy.  As I look forward to 2011 here are a few thoughts or notable things of 2010.
 
2010 was the year of uncertainty--much of what was talked about among estate planners was uncertainty of estate tax law and how much anguish that caused for planning of any kind.  When the news about taxes finally came...so late in the year (December 2010)...it was a decision that even the most optimististic types didn't  predict. Although, personally I told clients that President Obama supported a credit of $3.5 Million for estate taxes--which was a pretty good call--since the credit is now $5 Million (for individuals).

There was a fear among some that 2010 might be a very bad year for taxes--as politicians might change the laws--but as I believed--the year ended up as the year of less taxes, and specifically will be lodged in the record books (in terms of recent history):  

• 2010 - As the Year of No Estate Tax

As far as the extended "tax cuts" for 2011 and 2012, those extensions will generally only be around for 2 years, so long-term planning might still be tricky--and most most likely the next big tax-debate will be the focus of the 2012 elections. 

I was reading over this WSJ article by Laura Saunders that gives a good recap on what has happened in 2010 and a peek at what the future holds for tax issues. 

On a more personal note, this year was a year of tremendous growth for me--I had a chance to connect with many of you in person or on my Facebook page (if you haven't, you can check it out, my FB page)--for which I am grateful.  Also as of today, I am on Twitter, you can find me at http://twitter.com/#!/darylbinkley
 
As I look forward to start this new year, I want to wish you all a happy, healthy and prosperous 2011.

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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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