So many clients come into our office, finish signing their estate plan, start to lean back with a sigh of relief only to sit straight up again and say “My parents really need to do this! I wish they would listen to me and come in to see you.” How can adult children persuade stubborn parents of the necessity of an estate plan?

First you need to determine if your parents actually need to be persuaded, or if they’re merely slow to follow through. Offer to bring them with you to your next appointment (if you and your attorney don’t mind), or offer to make an appointment for them with their own attorney. Some parents in very open families even like to have adult children with them at planning meetings

There are times, however, when actual persuasion is required. You may be a grown adult with responsibilities, a successful job, and family of your own, but to your parents you will always be their little girl or boy. This doesn’t mean that your parents don’t value your suggestion, but it may mean they don’t see any urgency to taking action. In these situations what your parents may need to light a fire under them is a professional outside opinion. Suggest that your parents go see their financial specialist, even offer to set up the appointment for them. Much as parents love their children, the opinions of professionals sometimes carry more weight than that of their offspring.

There are the rare occasions, however, when parents absolutely will not be persuaded. Perhaps they don’t trust attorneys, or are adamant that probate is good enough for them, or perhaps (for their own reasons) they want to maintain privacy or even secrecy. In these situations the best course of action may be to let it go. Your parents may have a change of heart when they see how happy you are with your estate plan, they may not.

If this last is the situation you find yourself in, your best course of action may be to ask your attorney what you can do to best protect yourself from the fallout of a lengthy probate process when your parents pass away.

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Jane Austen once wrote “There will be little rubs and disappointments everywhere, and we are all apt to expect too much; but then, if one scheme of happiness fails, human nature turns to another; if the first calculation is wrong, we make a second better.” Such an (eventually) optimistic philosophy is good to have in the economic times in which we find ourselves now, when the unemployment rate is a staggering 8.5%. With more than 5 million jobs lost since the recession began, people are finding that there is indeed a need for resiliency and creativity, and those who are able to “turn to another” scheme of happiness will fare better than those who steadfastly hold out hope for the old ways.

According to this article in USA Today, more and more people are getting creative in their schemes for happiness, and many are doing so by starting small businesses after they are laid off from large companies. In fact, a small business is not at all a bad place to be right now, considering President Obama’s recent announcement regarding ”a small-business financing plan that includes reduced loan fees and incentives for banks to do more lending.”

If you are one of these brave people who have chosen to combat economic conditions by creating your own small business, remember that going from being an employee to being “The Owner” brings with it many changes, not the least of which are changes in your estate plan. Small business owners tend to be less liquid than traditional employees, putting much of their earnings back into the business for growth, which means estate planning for business owners requires a different strategy than for other families.

Whatever your scheme or situation, our firm can help you create the right plan to protect your assets and your family.

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Hotel magnate and “Queen of Mean” Leona Helmsley has always been a figure of controversy, both in life and after her death in 2007. Reporters and bloggers went wild when she left $12 million dollars to her dog “Trouble” in a trust fund after her death. But that $12 million (later reduced to $2 million by the courts) wasn’t even the bulk of her estate. Most of the Helmsley estate (somewhere in the area of $4-$5 billion) was left to the Leona M. and Harry B. Helmsley Charitable Trust. It is this charitable trust that is still carrying on the Helmsley controversy today.

Although the management of the Helmsley Charitable Trust was left up to trustees, with few specific legally binding instructions regarding beneficiaries, Helmsley did leave a “mission statement” (also called a “letter of intent” or a “memorandum of intent” in the EP world) stating that it was her intention that the bulk of the trust “provide for the care of dogs”. What trustees have actually done is given $1 million (less than 1% of the estate, according to the president of the Humane Society) to dog-related charities, with the bulk of the estate instead going to various medical centers—of the human kind.

The question from an estate planning perspective is not necessarily whether Ms. Helmley should have left her estate to the dogs, but whether or not her wishes are being followed. And the lesson to be taken from the controversy over her estate is this: If you have specific wishes as to the distribution of your estate, you must leave specific instructions in an updated and legally binding document created by a knowledgeable professional.

The best estate plan is the one that can be executed without controversy.

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People used to think that retirement was a time of placidity and relaxation, a time when all of life’s big surprises were behind you and most days and years would now bring an unchanging idyllic existence…

It seems unlikely that this was ever an accurate portrayal of any phase of human existence, including retirement, but people seemed satisfied to believe it at the time. Recent events, however, have put retirement under some serious scrutiny, and what has been found is that (especially lately) retirement is just as fraught with losses, gains, and unexpected changes as any other time of life—perhaps more!

In retirement, as with anything else, foreknowledge and preparation can make all the difference. This recent article in U.S. News and World Report entitled 5 Big Financial Changes for Retirees in 2010 can help prepare retirees for what’s ahead. And in spite of what general opinion would have you think, the news isn’t all bad! New Roth IRA rules and a suspension of mandatory retirement plan withdrawals are two changes that will work in retirees’ favor. But taking advantage of these changes could have a negative effect on your 2009 tax return if you don’t take precautions.

Contact your financial advisor or estate planning attorney for the low-down on how to best use, protect and preserve your retirement income. With the right preparation, you just may be able to have that relaxing (if not completely care-free) retirement after all.

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A child paralyzed in a tragic accident; a spouse diagnosed with Parkinson’s disease and then placed in assisted living after a terrible fall; mounting medical bills. How does one plan for a situation such as this? Kate Michelman certainly thought she and her husband had planned for every eventuality—she is a well-known and well-to-do public figure, they have excellent medical insurance, long-term care insurance—and yet still they found themselves “on the brink of losing everything”.

Michelman’s story is frightening precisely because it could happen (and is happening) to any of us. The unfortunate truth about medical insurance, long-term care insurance, and even Medicaid is that it often covers “most of the cost” of medical treatment—but “most” is woefully lacking when faced with the reality of the high cost of medical care.

And so we ask again, how does one plan for a situation such as this? The answer begins “with help”. The medical industry, insurance industry, and government benefits programs are staggeringly convoluted and confusing. Enlist help in navigating their requirements and regulations. Find a professional who can help you build a plan to make the best use of those systems and what they offer. Find other professionals who are well-versed in peripheral systems who can support that plan.

Medical care in the United States has become a mountain of cost, and even the young and healthy cannot afford to ignore it any longer.

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The Wall Street Journal says that family limited partnerships are finding renewed favor as an estate planning tool, thanks to recent tax-court decisions.

In an article entitled “Covering Your Assets” Journal writer Mark Klimek asserts that despite some IRS opposition, tax court rulings in recent years have endorsed the use of FLPs when they are used to preserve a family business for future generations.

“Setting up such a partnership could be especially useful right now for families with businesses,” according to the article. “The Obama budget calls for the estate tax to be restored next year at a rate of 45 percent for estates worth more than $3.5 million, or $7 million for couples. Income-tax increases for high earners are on the agenda as well.”

The article goes on to describe many of the dos and don’ts of FLPs, but of course each family’s situation is special, and you should consult an estate planning attorney before making decisions about any specific strategy.

In any case, the time to act is now. According to one expert quoted in the Journal article, “There’s a realization that any kind of estate planning you can do this year is good, because 2009 will probably end up being the most favorable year for taxes ever.”

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How are you feeling about your retirement these days?  According to Chuck Jaffe’s article in MarketWatch most people’s answer to that question is not so good. According to Jaffe, Americans are losing confidence in the market’s ability to support their retirement (with good reason), and the most common reaction to this lack of confidence is to reassess their future and plan to put off retirement a few years.  But what if your retirement date isn’t a matter of choice?

The tagline of Jaffe’s article is “Raise Retirement Satisfaction By Lowering Your Standards”, but what Jaffe really seems to be saying is not so much “lower your standards” as be educated about the market and realistic about your standards. “Getting a better handle on your future — so that you can either say today you’ll be able to live comfortably in retirement or make plans that raise your comfort level in time — requires sound knowledge of where you actually stand today. That requires taking inventory of your assets, expenses and plans.” 

This is sound advice not just in retirement planning, but in any kind of planning—including estate planning.  There is a lot of conflicting information out there, and a lot of assumptions; our firm can help you navigate the terrain and make an informed choice about your future.

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Do you consider yourself an organized person? It seems that when it comes to organization some people have the gift for it and some people simply don’t. If you’ve ever had (or have currently) the overwhelming job of sorting through the estate of a deceased loved one, you know how very grateful you can be if that loved one had that gift for organization. If, on the other hand, you find yourself sorting bewilderedly through the estate of a less organized loved one, do not despair—Suzanne Barlyn of the Wall Street Journal has some advice to help you through “The Mess They Left”.

The truth of the matter is that you can be a wonderfully organized person in life and still inadvertently leave a mess for your heirs simply because you don’t know what will be important after you’re gone. Here a few tips that will make a world of difference to the executor of your estate:

• Keep all of your estate planning documents (will, trust, powers of attorney, etc) together in one place, and make sure your executor knows the location.
• Keep updated lists of assets with your estate planning documents—including life insurance policies, retirement and investment accounts, bank accounts, property, etc.
• Make it as easy as possible for an executor to find any remaining debt you may have. File your bills in a tidy and logical location.
• Make a list of personal property and your wishes for it; this may be the hardest thing for you, but it will prevent emotion-driven bickering among your heirs. You would be surprised at what kinds of trinkets people will fight over.
• Don’t be secretive about your advisors. The people who advised you in life can be of invaluable service to your executor after you’ve passed away.
• Give the name and contact information of your estate planning attorney to your heirs ahead of time. The world of probate can be strange and entangled, and your EP attorney can serve as a guide to loved ones who are still confused and in shock.

Whatever your natural tendencies may be, a little organization can be one of the greatest gifts you leave behind for your heirs. An hour or two you spend now getting your paperwork in order can save your executor weeks—or even months—after you’re gone.

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At the end of the day, when all of the decisions have been made and documents have been signed, many estate planning clients still have one question: Should I tell my Fiduciaries that I’ve nominated them as executor, healthcare agent, guardian, etc; and how much should I tell them?

The answer to the question is yes; unless you have an extraordinary circumstance which makes secret-keeping best for the time being, you should absolutely inform your fiduciaries that they’ve been named. Most fiduciaries will be honored to know that you place such trust in them. This is not to say that you need to explain the entirety of your estate plan to them, or even tell them in which order they’ve been named, but it is polite to let someone know that you’ve nominated them for a role.

Healthcare agents especially have a need to know that they’ve been nominated, as they will need a copy of your HIPAA Authorization in order to get information from the hospital staff, and a copy of your healthcare directive both to prove their authority, and to make medical personnel aware of your wishes for treatment.

It is also important to let your fiduciaries know that being nominated places them under no legal obligation. If when the time comes they are unwilling, or feel that they are no longer prepared to take on the responsibility for which they have been nominated, they are perfectly free to decline. (This is also why it is so important for you as the creator to nominate secondary or back-up fiduciaries.)

Part of the process of informing your fiduciaries is also preparing them. Give them the name and contact information of your attorney and let them know if the attorney is available to answer any questions they might have. Let them know where a copy of your estate plan can be found so they aren’t flying blind when something happens to you. And if you feel comfortable, inform them of the finer points of your plan, your specific wishes, and help prepare them for the role they may someday step into.

Telling your fiduciaries just how much faith you have in them, and how important they are to you can be a very moving process, and often has the unexpected result of opening the eyes of both parties to the quality of the relationship, and bringing you even closer together.

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The second annual National Healthcare Decisions Day is coming up on April 16, and there has never been more reason to consider what your own wishes are, and especially to make those wishes known. As difficult as it may be to think about the end of your parent’s, your child’s or your own life, not doing so—and not talking about it—can have unintended consequences.

According to Maggie Jones, studies conducted by researchers at the Dana-Farber Cancer Institute revealed that not discussing your end-of-life wishes with your doctor was likely to lead to a more expensive death, a more painful death, and a more traumatic experience for your loved ones… the only thing it did not lead to was a longer life.

Talking about death and your end-of-life wishes does not have to be a difficult or painful conversation, especially if you don’t wait until the last minute. Dr. Anthony Back encourages people to “pace themselves by having ongoing end-of-life discussions, rather than waiting until there’s only time for one big, emotionally loaded conversation when the patient is near death.”

At our firm we agree with Dr. Back. We discuss your healthcare and end-of-life wishes during our planning sessions whether you’re 82 or 28, and we include your wishes as part of your estate plan by having you execute a healthcare directive.

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