Mark A. Bregman, Estates and Trusts Lawyer


Posts Tagged “Scottsdale Estate planning”

Planning for After the First Death

A comprehensive estate plan includes understanding what steps will be required when you or your spouse dies.  Tax planning advantages and the intended distribution of wealth to your loved ones takes place in stages and certain opportunities will be lost unless the proper plan is in effect when the first spouse passes away.  This posting describes what steps are necessary after the first death.  Next week’s posting will describe how a comprehensive plan works through the life of a couple, the death of a spouse, and finally the death of the surviving spouse.

The estates of the first spouse to die often avoid probate.  Unless properly planned, the ease of the first transition may lull loved ones into a false sense of comfort that may surprise them upon the second death.  This may be especially true since 1/1/2011 when the new concept of “portability” was introduced allowing properly administered estates less than 10 million dollars to avoid estate taxes altogether.

Even with lack of proper planning many spouses may avoid an estate administration if the value of their estate is less than 10 million dollars.  Real property and accounts may be in joint tenancy or community property with rights of survivorship and life insurance, annuities, and retirement accounts may designate the surviving spouse as the death beneficiary and the surviving spouse may do nothing because there just doesn’t seem to be a need for it – the surviving spouse has complete access to everything and may not appreciate the need to administer those assets.

The recording of a death certificate and notification of the custodians of any policies, contracts, or accounts may be sufficient for the surviving spouse to gain control over all those assets.  Yet a gaping hole has been created unless the surviving spouse takes care to name new beneficiaries of retirement accounts that are retitled in the surviving spouse’s name (a “spousal rollover”) and have a Will or Trust which designates who inherits upon the death of the surviving spouse.  If the decedent has begun taking minimum required distributions, a minimum required distribution must be taken in the year the decedent dies, if none has already been taken.  There are substantial penalties for failing to take that minimum required distribution.  Taxes must be paid on the distributions taken either by the decedent or the beneficiary.

Failing to record a death certificate may cause delay later when trying to sell or transfer the property after a second death.

Accessing accounts after the second death when the first decedent’s name has not been removed may also cause delay and unnecessary expense.

In order to claim the benefits of “portability,” a timely estate tax return must be filed even if no tax is due.  This will be particularly important if the estate tax exemption amount returns to $1,000,000 on 1/1/2013 as is presently projected.

Failing to establish the credit shelter trust provided for in most good estate plans may be an expensive mistake.  It is a mistake of good faith if only estate taxation is considered, but other considerations such as how the children of blended families are treated or how the assets are protected from creditors are non-tax reasons to be concerned about the AB division in addition to the lawful avoidance of estate tax.

I recommend a legal checkup after any death just to be sure loved ones have good advice and guidance about how to proceed.  I like to create a customized checklist for the family of every decedent so they know when the administration of the estate is complete.

If you or a friend wants help understanding the legal process either before or after death, please call me.

The 6 Potentially Fatal Flaws of Joint Tenancy

Last week I mentioned joint tenancy bank accounts as being a simple, but potentially dangerous way to provide for a transition of bank accounts.  It is a commonly used technique because it is simple and is the favored way for bankers and investment advisors to administrative your accounts with the least amount of effort for them.

It is another example of my “broken clock” philosophy.  It is right twice a day.  When it works it is very simple and economical, but when it fails, it falls with a loud “thud” and can be very expensive, especially when you are aware of the other almost as simple and cost effective methods you could use.

About 12 years ago, I wrote a brief explanation of these problems from the perspective of the wealth transfer system.  Those 6 reasons remain valuable today, but I have rearranged the order of importance to take into consideration the different considerations which I believe almost everyone will face based on today’s different challenges.

In summary, using joint tenancy, may expose your assets to the liabilities of your joint tenant, accounts may be at risk because the joint tenant has control over the account without a corresponding fiduciary duty, you may unwittingly incur the costs of an unwanted probate proceeding, you may suffer an adverse income tax result, you may suffer an adverse estate tax result, your property may not pass to your descendants as you intended, and you may have created an avoidable risk from accidental creditors.

Here are the 6 tragic adverse, but avoidable, consequences you and your family may suffer if you rely on joint tenancy:

1. Joint tenancy accounts with adult child or caretaker subjects you to expensive and potentially devastating results and the loss of the asset.  Joint tenancy property is fair game for creditors of your joint tenant.  Although you may have an opportunity to prove the property was placed into joint tenancy for convenience and that the property really does not belong to the debtor, you are exposed to litigation and the expense and uncertainty that are litigation’s natural results.  You are also susceptible to the joint tenant misusing the property or not sharing the property with his or her siblings as you intended.

2. Joint tenancy will avoid probate for the first spouse, but not the second.  In fact it assures that there will be a public probate proceeding when the surviving spouse dies.

3. If the asset is real property or an investment account, joint tenancy will also cause the estate to lose the double step-up in basis afforded to community property assets.  This is a significant loss resulting in additional capital gains taxes if the asset is sold by the surviving spouse

4. A joint tenant has no control over what happens to the property after death.  A surviving joint tenant can sell or transfer the property, or can pass it to the survivor’s choice of heirs, including subsequent spouses.  Joint tenancy deprives you from assuring that your property stays in your bloodline.  Without any further planning, property owned by a surviving joint tenant will pass automatically to the heirs of the survivor.  If the survivor’s heirs are not the same as the decedent’s this could lead to an unintended result

5. No creditor protection is available when property passes by joint tenancy.  Creditors come in many shapes and sizes these days.  Jury verdicts in even the most common accidents easily exceed insurance limits.  Aging survivors are more susceptible to lapses of concentration while driving or otherwise.  Why unnecessarily expose all of the survivor’s assets to creditors when a trust can provide creditor protection to your spouse or your descendants?  This is valuable protection that can not be purchased at any price if you miss the planning opportunity of placing your accounts into a trust that will be irrevocable when the first spouse dies.

6. No estate tax protection for post-death appreciation is available if joint tenancy is used.  Although the asset will pass to your spouse estate tax free; upon the death of the survivor, the entire estate is exposed to estate taxes and the estate tax exemption available to the first decedent is lost unless you have planned for a credit shelter trust or file an estate tax return and claim the “portability” carryover exemption.  If your combined estate, including life insurance is likely to exceed $5,000,000 (or $1,000,000 if the law is not changed before the end of 2012), then you have unnecessarily benefitted the government at the expense of your descendants.  This could be a mistake that could cost you 55% of the value of your estate in excess of $1,000,000.

     I encourage you to take the time to consider whether joint tenancy is a viable strategy for you.  You may be the broken clock that is right twice a day, by why take that risk relying on a do-it-yourself approach to a complicated issue.  Call me to help you sort through what plan is best for you.

Planning for Incapacity

Planning for incapacity involves understanding how incapacity might occur and a commitment to having a current plan.

Often considered crucial only for end of life planning or for diminished capacity, dementia, or Alzheimer’s Disease, planning is most important if you become incapacitated due to an accident, injury, disease, or other medical condition.  As with all modern planning, the plan must be flexible enough so that if implemented tomorrow, it will be effective for many years.  A common mistake is assuming that the plan will not be implemented for years to come.

The key for all planning is give adequate thought to how you and your family will react in a variety of situations.

A discussion with your spouse and loved ones about how you want to be cared for is better than any document you can sign for assuring dignified treatment consistent with your values and intentions, but the document is what expresses those values and intentions.

Your health care power of attorney (HCPOA) should name at least a primary person, usually your spouse, and one or more secondary people who are aware of your personal opinions about how and when you want health care and medical procedures delivered to you.  My preference is that the document be open ended and give the broadest possible authority to the agent you name.  The Arizona statutory form may be sufficient for some people and can be viewed and downloaded by clicking on this link, Arizona standard form, which will take you to the Arizona Attorney General’s website.

In addition to the HCPOA, should decide what are your end of life instructions and incorporate them into a living will.  The statutory form can also be downloaded at the Attorney General’s website, but it is somewhat less useful and more confusing because of the many options allowed.  I recommend that you discuss your end of life intentions with your loved ones to be sure everyone likely to be involved knows how you feel about life and dying.  I use a very simple form that plainly and unambiguously declares your end of life intentions.

In addition to these important decisions, you should consider who you want to make decisions for you if you are unable to make them for yourself because of a mental defect which might be dementia, Alzheimer’s, alcoholism, or other form of diminished capacity.  It will be no surprise that I believe it is more important who you select to make the decision and the authority given them than trying to make specific declarations for someone to follow.  The greatest flexibility translates to the best possible decision making, but your values and intentions must be known to the person you name.  Although you might accomplish that within the document, it is best if you have discussions extending over a period of time to make your values and intentions clearly known.

After assuring that all your health and medical needs are addressed, you must consider who will act for you to pay your bills and make your financial decisions.  Often, those acts will be performed by your co-trustee if you have a spouse or by an adult child who is already named as a co-trustee, but if you don’t have a co-trustee, you need a good mechanism for determining when a successor trustee under a trust or an agent under a general durable power of attorney will be able to act.  If the persons named by you to act are absolutely trusted, the appointment may be immediately effective.  If you want the appointment to be effective only if you are incapacitated, then the document must provide that the power “springs” into being only if you are incapacitated and you must provide a method for determining when that event occurs.  A common mistake is naming another person, usually a son or daughter, as a co-owner of your accounts so they can write checks in an emergency.  Despite the convenience, that is often a mistake because of the potential for problems I will explain next time.

If you would like a more in depth discussion of your planning needs, please call me.  My number is (480)945-1931.

Mark Bregman

Posted in Estate Planning on January 24th, 2012 · Comments Off on Planning for Incapacity

The Continuing Series on The Complete Guide to Estate Planning

This is part 2 of a continuing series that began last week with an introductory syllabus.  Today’s post about the importance of planning while you are alive and well is the first of a 3 part explanation of lifetime planning describing the issues you must consider.  Part 2 will focus on emergency documents and the role players you will need to consider.  Part 3 will describe why you must do wealth transition planning while you are alive and well, even if you think you have a small estate.

It is often said that barriers to estate planning include no one likes to think about their own demise or that there will always be time later to plan. Many people mistakenly believe they don’t have enough money to plan or that in one form or another they are already “well planned” either because they believe their children will be able to “divvy” up their assets without a problem, they have a suitable Will, or their assets will all pass by operation of law through a beneficiary designation, right of survivorship, or otherwise.  It is not my intention to convince you that you need sophisticated planning, but I do believe many people underestimate the value of planning in several important regards.

First everyone should understand the emergency plans provided by state law.  If you have not intentionally created a plan by obtaining a financial power of attorney, a health care power, a living will, and a designated HIPAA recipients, your plan may go awry at the worst time.  Some folks believe joint accounts, PODs, and beneficiary designations are sufficient to transfer their assets in accordance with their intentions.  But you may be incapacitated as the result of an accident or an end of life illness when decisions must be made about your care and bills must continue to be paid.

A joint account may solve the problem of paying your bills, but who will make health care decisions for you if you are not able to make them for yourself and more importantly, who will the medical providers talk to about your condition?  State law provides a priority that includes your spouse and then your adult children and then others interested in your welfare to give informed medical consent, but it does not prioritize among persons of the same order, i.e., all children have an equal right to make the decisions for you.

There is no state law that will allow access to your financial accounts or permit you to be placed in a suitable facility without first going through a protracted and costly judicial proceeding if you do not have written directions signed and witnessed in accordance with law. Most importantly without a validly executed living will, your loved ones and medical providers will be uncertain of your end of life instructions.  As a consequence, you and your family may endure serious great discomfort and emotional distress.

In the last installment of this extended series, I will describe the havoc wreaked by do-it-yourselfers who try to solve these issues for themselves by finding a false sense of security in using “standard” forms found online or in your state’s statutes without proper legal supervision.

Next time I will describe the pertinent questions to ask yourself in preparing to meet with your attorney for this important process.  In the meantime, make your new year’s resolution to become “well planned” as the lasting gift you leave for your loved ones.  Call me if I can help.


Posted in Estate Planning on December 19th, 2011 · Comments Off on The Continuing Series on The Complete Guide to Estate Planning

Observations From the Trenches: Logical Estate Planning

Over my many years practicing law I have become a niche lawyer concentrating on estate planning. A growing part of my estate planning practice involves administration of trusts and estates. An inevitable part of trust or estate administration is resolving contested matters. Unhappily, a large number of those disputes become litigated matters instead of models of dispute resolution. Worse yet, if the patriarch or matriarch is still alive they are often heartbroken when their children cannot agree about basic issues facing the family.

As I enter my 32nd year of practicing law, I realize my clients value my common sense experience just as much as my legal technical expertise.

As a result I no longer tell people I “prepare wills and trusts” because I realize the will, trust, or power of attorney is only a tool. I seldom see disputes or problems with documents, but I often see disputes or problems because assets are not properly titled, beneficiary designations are not up to date, or the chosen role players are not adequately equipped. A better answer when I am asked what I do is to say that I am a problem solver; I am a family lawyer, I am an estate lawyer focusing on the affordable and efficient transition of wealth and values in an environment that protects loved ones from the problems that come with inheriting money.

I have become a bore to many of my clients, financial planners, and others because of my obsession of putting my clients’ financial affairs in order before they reach the point in time when they can no longer do it themselves because of death or diminished capacity or ability. It is not a simple task and I force everyone connected to the plan to stop making assumptions and actually prove to me that everything is in order.

I have banished from my office the idea that anyone can take an action that gets work off their desk without being able to explain how the step taken moves a problem one step closer to resolution. Each day, I tackle the most unpleasant problem on my desk first to be sure I can clear my head. Seldom is the least pleasant also the most difficult or most important; often it is the longest neglected or the most time critical.

To me, these thoughts have become the logical basis of my philosophy of helping clients. Taking to heart my 2 favorite mottos – “begin with the end in mind” (from Stephen Covey’s 7 Habits of Highly Effective People) and my favorite Eisenhower quote – “plans are useless but planning is indispensable,” I clearly see the mission I must accomplish for my clients.

If you have not been in to see us for awhile, call us today to ensure that your family affairs are in order. We will work together until we have a high degree of confidence that your estate plan will work as intended in as many different scenarios as we can reasonably envision. If you are not yet a client and you would like to see this planning in action, call me and I will send a “Welcome Kit” to start you on our journey together.

Is Something Rotten in the Maricopa County Probate System?

I’ve been a practicing lawyer in Scottsdale for over 30 years and I have never witnessed a fire-storm like the rage that has engulfed the probate system in the past two years.

I’d like to bring some sanity to the story and suggest a sensible solution.

If you haven’t read the horrible stories or the outrage generated by the current probate system you can catch up on the horror here, at  The stories you will read here are indeed sensational and terrible stories.  Most of them involve lawyers who are personally known to me as caring competent lawyers, and who were tangled up in difficult cases or inadequate safeguards and procedures.  The cases feature over-reaching by professionals, inability of the courts to provide adequate supervision, and victims and their families who (for various reasons) simply failed to plan.

Before you read and join in the hysteria, let me give a little bit of background: the entire probate process is an extremely emotional and technical exercise, which requires interaction between laypeople and professionals, with a system that tries to be effective for all cases—from the very small to the very large.  Lapses in the conduct of the administration in which individual cases are conducted, the frail nature of the system, and its inability to provide adequate oversight show the system at its worst.

When a reporter tells a story of a client being charged several hundred dollars to cancel magazine subscriptions you aren’t necessarily getting the entire story. You may get a quick impression of the frustration and final outcome, but you don’t get to see how the story actually unfolded.  While the fiduciary may have thought one phone call would suffice, the actual process could entail a determination of whether another family member wanted the subscription, a flurry of messages and return calls, file reviews, etc.  Suddenly what should have been a simple quick solution has mushroomed into a nightmare.  Multiply by this each step in the probate process and it is truly a catastrophic handling of the case.

But if you are outraged by these stories (and there are plenty of reasons to be outraged,) remember that you have a choice.  There are many competent, ethical lawyers out there, and many equally competent and compassionate private fiduciaries; but even the best lawyers and fiduciaries can’t help if the clients have not adequately prepared for the end of life struggle.

There simply is no substitute for an adequate estate plan.  Readers must know the difference between having just a will or a trust, or creating a whole estate plan.

Prospective clients ask whether they need a Will or a trust and what is the difference.  The real question should be “what is an estate plan?”  Just having a Will or a trust and financial and health care powers of attorney is not a complete plan.  Today, most assets can pass to beneficiaries without going through probate, but they won’t necessarily pass to the people you want, the way you want, when you want, unless you have created a thoughtful plan.  And those assets may not even get to the transfer stage if consumed during the end of life process by expenses, private fiduciaries, and lawyers.  Then when the remaining assets do pass to beneficiaries, if the plan has not been carefully constructed the assets in an inadvertent plan will be unnecessarily exposed to the creditors and spendthrift habits of the beneficiaries.

Because a Will or a trust is just a tool, the emphasis in my practice is on The Plan and how those tools will be used.  Dwight D. Eisenhower said that while plans are useless, planning is indispensable. The important work is understanding the pitfalls likely to waylay assets in the end of life process, and empowering your family and professionals to address your plans in an ethical way, so that the end result can be as close to what you intend as possible.

If you want to avoid your legacy becoming a sorrowful story of drained assets and battling distant heirs, call me today and get started on the planning process.   If you know anyone who wants the peace of mind that they have a plan that works, I welcome referrals.

What does the 2010 tax bill mean for 2011 estate taxes?

By now everyone knows that the President has signed a tax bill.  The question now on everyone’s mind is exactly what did he sign, and what does it mean to you?

  • Lower payroll taxes in 2011 and the historically low rates of taxes on dividends are good for all of us (not so good for our children and grandchildren, but that’s rant for another day).
  • A 2 year estate tax law will allow the debate to be re-opened during the 2012 Presidential election campaign, but if no new compromise is reached, the rate of taxation will return to the 2001 level of 55% on most estates, 60% on others, and the exemption amount will return to $1,000,000.
  • The estates of decedents dying in 2010 can elect either the new 2011 tax system or the 2010 tax system with a carryover basis.  This corrects a basic inequity that created a notch problem for estates greater than 1.3 million dollars, but less than 3 million dollars.
  • A maximum rate of 35% on both estates and gifts reduces the impact on many estates, but it remains an issue to be considered in planning.
  • For decedents dying in 2011 or 2012, the exemption amount is $5,000,000.
  • For the first time a concept known as “portability” has been introduced which means that a surviving spouse will pay no estate tax as long the survivor’s total estate is less than $10,000,000.  Although this seemingly simplifies planning for couples with a gross estate of more than 5 but less than 10 million dollars, it unfortunately acts as a disincentive for those families and others to complete comprehensive planning that can confer far greater legacy and tax benefits than the default plan.
  • Also for the first time since 2004, the gift tax exemption and estate tax exemption have been reunified, allowing lifetime gifts up to 5 million dollars per person.  For many families this will present unique gifting opportunities that should be completed in the next 2 years.
  • New rules for generation skipping transfers (GST) clarify how 2010 gifts can be handled; guidance that was sorely lacking and created great uncertainty for many families that wanted to make gifts in trusts for grandchildren.  Increased exemption amounts will allow significant amounts of money to reach dynasty trusts at considerable benefit for long term planning.  The gifting and GST rule changes were perhaps the most unexpected and create the greatest opportunities for future tax savings.

Without a crystal ball no one can predict what all this means for 2013 and beyond, but undoubtedly you will hear of many plans and opportunities in the weeks and months to come.  With the lowest income tax rates in a generation and the highest deficits and debts in the history of our country driven by the ever growing entitlement programs and the loss of good middle class manufacturing jobs, it is a near certainty that the new favorable system will be under attack again in 2012.

Look for news of upcoming live presentations I will be giving to answer questions and describe some forward thinking that will keep you informed of what you should or shouldn’t be concerned about in the near term.

This will be my last post for 2010.  Happy holidays to everyone and a prosperous and well planned new year!

Confessions of an Estate Planner

Do I provide what my clients really want?

It has been suggested that estate planning lawyers rely too heavily on what they think clients want, providing services that are the easiest and most economical to give, rather than listening to what our clients really want.

As a result we give our clients hefty estate planning binders containing long documents covering every imaginable situation, and lengthy instructions that give our clients the impression that this work is too complicated for anyone other than professionals, so they need to come back to us to interpret the documents we prepared for them.  But as important as they are, revocable living trusts, pourover wills, financial durable general powers of attorney, health care powers of attorney, living wills and an assortment of related documents are all simply tools of the trade.  They should not be the end result.

I’ve met many people who tell me they have a great estate planning attorney, but I’ve met very few who can tell me why they think so.

I’ve been an attorney since 1979 and have concentrated on advanced estate planning techniques and strategies since 1998.  I have litigated contested probate cases that go awry when the planning fails.  And I have testified as an expert witness on trust matters that almost always arise because the lawyer did not adequately listen to the client’s needs and desires.  The listening failure often occurs because the lawyer failed to ask the right questions.  I’ve interviewed many clients, and I bring my unique experience to each client experience; yet I still find the most difficult part of my job is getting clients to express what they really want.

Right now I want to rededicate myself to creating estate plans that work.  To me, a good plan is one that accomplishes my client’s objectives in a cost efficient manner.  Cost efficiency means avoiding as much estate tax, administrative expenses, and legal fees as possible. It begins with the initial client meeting and isn’t finished until the assets are safely distributed as desired by my client.

I believe the process must begin by intimately knowing what my client owns and values, how each family dynamic works, and my client’s hopes, dreams, and aspirations for how these assets accumulated over a lifetime can be used to assure the comfort of my client, the future success of my client’s descendants, and the support of my client’s favorite causes.

Although a good clear set of documents is a necessary tool, establishing a strong ongoing relationship is even more important, and the linchpin to any successful plan. If you are relieved at “completing” the estate planning process merely because you sign your documents, but don’t identify your estate planning lawyer as among your most trusted advisors, I haven’t done my job.  If you sign a will or trust and then check it off your to do list to never think of it again, then I haven’t done my job.

However, if you are able to think about your estate plan without becoming melancholy, then I have done my job.  If you relish knowing you can call me whenever you have a problem, without fear of the “meter running,” then I have done my job.

These are a few of the things I believe go into a good relationship.  Now I’m interested in what you want in a good client attorney relationship.  I’m listening; please share your thoughts with me.  Your comments will help me be a better advisor for all of you.  I look forward to hearing from you online or in person.

Death and Taxes in 2010

Much has been written and discussed about the absence of an estate tax in 2010.  The debate about what Congress may do rages on and is spiced up with stories about the death of George Steinbrenner and others like the Texas billionaire Dan Duncan, but the little publicized truth is that the 1 year repeal of the estate tax actually imposes both taxes and legal fees on much more modest estates.

As part of the repeal, Congress also repealed the step-up in basis rules and substituted carryover basis rules, which means that any beneficiary who decides to sell the assets they inherited will have to pay tax on the gain—the difference between the amount the decedent originally paid for the asset and the amount the beneficiary receives for the asset.  As you may imagine, this will result in capital gains taxes on many middle class Americans.

There is a limited exception that could protect many small estates, but only if the value of the estate is under $1.3 million. You may think that you have nothing to worry about, that $1.3 million is a lot of money, but you would be surprised at how many “small” estates are actually large estates.  When you take into consideration the value of a home, retirement or savings accounts, a small investment here and a small investment there… the value adds up pretty quickly.

Every estate larger than $1.3 million that fails to file the required report is subject to a $10,000 penalty.  The report must be filed without regard to whether there is any property that benefits from the step up or not. The report must be filed with the decedent’s last income tax return due on April 15, 2011.  In addition to the report to the IRS, the estate must send a copy of the report to every beneficiary or heir that received property as a result of the death, presumably including recipients of life insurance proceeds and IRAs even though no basis adjustments would apply to those assets.

These rules are complicated.  They are not intuitive, require much attention to detail in a timely manner, and carry severe penalties for non-compliance.  The 1 year repeal of the estate tax in 2010, while a windfall for the über wealthy, will be a burden and expense on more modest estates.  If you have a family member who died in 2010 with more than $1.3 million in property (including a home, life insurance and retirement accounts) transferred as a result of the death, you have only a short time to comply and avoid the serious financial penalties.

It’s a big job, and you don’t have to do it alone.  Call me for help today.

Do You Know What You Don’t Know?

I recently came across a New York Times article that reminded me of an all too common experience I encounter in my estate planning practice. In the article author Ron Lieber recounts his experiment with 4 different Do-It-Yourself will drafting software programs and the outcome. Although Lieber goes through the pros and cons of each software program, his final conclusion is that while these programs may make you feel safe, they simply can’t give you the level of protection a trained attorney can—and in some cases these programs actually do more harm than good.

Unfortunately, I am often the bearer of this kind of bad news after the damage is done.  Lawyers consulted after a death cannot undo the damage done by an inadequate or incomplete estate plan, we can only do the necessary work to administer the estate and transfer the assets, hopefully, but not always, to the intended loved ones.  Unlike writing on a blank slate if nothing had been done, first, I must erase the unintelligible mess before I can begin.  This is generally expensive, meaning that the self help remedy defeats its own purpose by becoming more expensive than had the client consulted a competent lawyer in the first place.

The Attorney General of the state of Washington agrees with me.  In an announcement explaining the terms of a recent settlement with LegalZoom, the Attorney General expressed concern that the advertising and service offered was misleading because although it provided forms, it couldn’t provide the advice necessary for a consumer to determine if the forms were being completed properly.  The enforcement of its unauthorized practice of law rules is a major victory for unwary consumers and a lesson for us all.

Something happening in Washington may seem far away from our lives here in Arizona, but this is a serious issue that affects anybody considering an estate plan—or legal work of any kind!  I strongly urge you to look closer at the NYT’s article at the top of this post and then the announcement from the State of Washington.

It all comes back to the fact that you simply don’t know what you don’t know. Finding professional advisors whom you trust to help you determine your intent, to spend the time it takes to know you and your family, and to design an estate plan that will be efficient in terms of cost and effectiveness is of the utmost importance.

In the midst of designing an extraordinarily complex plan recently, I delivered drafts for review of multiple trusts and documents to the clients, one of whom honestly asked if they needed to hire someone to read and explain the words to them.  In the same week, a prospective probate client delivered a perfectly organized file consisting of 30 or more documents that had been prepared by a combination of document preparers and online do-it-yourself packages, all of which looked very good and which had taken a very long time to create and organize.  Unfortunately, all of those documents individually (and certainly the group as a whole) failed to achieve any of the primary purposes – it did not avoid a probate process, it did not transfer the assets to the intended persons, and it will not avoid legal fees.

What do these 2 seemingly disparate examples have in common?  Without knowing what they didn’t know, the client and the prospect were unlikely to make the right decision without relying on the expertise of a competent professional.

I believe estate planning is an important partnership.  If you teach me about your family, your finances, and your hopes, dreams, aspirations, and intentions, then I will teach you the law that must be applied to achieve the result you want to obtain.

The rest is just hard work.  Legal documents are tools to achieve a result.  Anyone can buy a hammer and saw at the local hardware store, but not everyone can build the house they want to live in.  You have spent a lifetime acquiring knowledge and skills and applying your talents to build a life; do you really want to take a chance not knowing what you don’t know?

Estate taxes, gifting, revocable and irrevocable trusts, heirs and beneficiaries, trustees and executors, estates, probate, Last Will and Testaments, power of attorneys, health care directives, and more are the language and stock in trade of good estate planning; using them correctly is difficult.  EVERY case is “fact specific” which means that your circumstances and intentions dictate how the resulting documents are drafted.  Form documents are like a broken clock that is right only twice a day.  Your family may pay a terrible price for the false sense of security of form documents.

Laws and common practice are complex and ever changing.  If you want an estate plan that works, call me.