California Estate Planning Practice Blog

Turkey Talk.

Don't you think that estate planning, financial planning and other sorts of financial preparation like saving for college, retirement or purchasing life insurance would be less taboo in general  if people discussed these matters with their family routinely? 

I mean everyone already knows that Brit is divorcing Kevin. Shouldn't everyone know that you've got a great college savings account opened up for your child? You don't have to share specifics, but just general sentiments.

Thanksgiving is just around the corner.

Imagine sitting at the family table at Thanksgiving and announcing that you figured out your gross estate is $1.6 million if you died today and that you are starting to think about tax planning as part of your estate planning. What would everyone think? In reality, who cares as these issues are so important that talking about them is really the best thing.

Talk about planning for the future, talk about what would happen if Mom or Dad died, talk about saving money for college in a 529 plan. Just talk. When you talk, you share ideas, compassion and a sense of motivation that taking care of your estate planning and financial affairs is truly an important thing to do.

Commonalities in End of Life Situations.

I met with two gentlemen over the past week who were both recently diagnosed with end stage cancer. They were from completely different walks of life. One very wealthy and the other struggling to make ends meet.

They also needed legal services in different areas. One had a probate matter to be handled and another needed to complete his estate plan for his family.

They were both in a rush to resolve their legal matters before they succumb to their recent cancer diagnosis.

While I like being able to help clients in need and assist in resolving their legal issues on an emergency basis, it was hard to see them face the realities that their lives are ending sooner than later.

The other sad part was that, while the clients appreciated my assistance, they were very angry to be facing the end of their lives in a very frustrating way.  I can empathize. I watched my mother get frustrated too as she battled lung cancer for a few short weeks before succumbing.

Umbrella Insurance Policies.

With the news about Jeffrey K. Skilling's sentencing regarding Enron, it brought up an interesting discussion between me and Delia Fernandez. Delia posts often under Financial Advisories by Delia on this blog.  She's terrific, by the way.

We started talking about umbrella liability insurance policies and whether I knew that those policies paid for the legal defense of OJ Simpson and President Clinton. I've posted about umbrella insurance policies before. Read them here and here. I hate to use this word, but "clearly" these policies are a bargain.
 
Here are two links for interesting reading about umbrella liability insurance policies:  Businessweek and Court TV.

As Delia says, "what a hoot of a topic!"

It Is Not What You Earn, But What You Spend.

The phrase that is the title of this post was spoken recently. It was spoken in the context of  budgeting and spending your money on things you think you cannot afford:

"It is not what you earn, but what you spend."

This came in context when a friend of mine was inquiring about hiring a personal trainer for one month to jump start her new fitness regime.  She wanted to start a regular exercise program to avoid normal aches and pains. She felt that her left knee was hurting her because she was not using the equipment at the gym properly.

So, the trainer, after quoting his fee of $100 for 4 sessions and drafting a plan to continue her working out on her own, my friend said what most people say: I can't afford it right now, but I will get back to you.

His reply was that it is not what you earn, but what you spend. Meaning if she truly wanted to afford the 4 personal training sessions because it was important to her health then she ought not to spend so much in other areas. Ix-nay Starbucks?

This is truly an interesting concept as it can apply to estate planning as well. Sure, attorney fees are not easily affordable, but is estate planning one of things that should be accomplished by most individuals and families to prepare for the inevitable in life? I think so.

A Trust For My Daughter.

I have a toddler. [My life is hard. Getting in and out of Trader Joe's with my sanity is a major struggle.] But, of course, being a parent is a wonderful joy. It is also a time when a formerly carefree individual starts to worry. I worry often about everything related to raising a child and being a parent.

I also worry quite a bit about me dying too soon. It's a good worry for me -- keeps me on my toes with my diet, regular exercise and keeping my "being too busy to have time for my family" barometer in check. 

My family track record isn't so good so it adds fuel to my worries about me dying too soon. My mother was 46 when she died. My father was 54 when he died. Both suddenly died from untimely yet generic health related causes (one cancer and the other heart attack). So I worry with a good reason.

I finally decided to do something about it. I am in the process of obtaining a second term life insurance policy* on my life so that if I do die untimely, my child(ren) will have a small pot of money set aside for higher education and life expenses. I am also creating a separate revocable trust to hold this policy and naming a successor trustee outside of my immediate family to manage this trust if needed.

It was hard for me to create this trust. I wasn't sure who to nominate as successor trustee. I named a trusted friend first and a corporate fiduciary second. I also wasn't sure how to distribute the proceeds. I decided to make distributions before age 19 discretionary and distributions after age 19 mandatory. I also decided to distribute one half of the corpus (what's in the trust in terms of assets) at age 25 and the remainder at age 29.

Despite my internal struggles and a reminder of how my clients struggle as they go through this same process, I feel much better having this in place.

Sure, being a trust fund baby is a good thing. But it is also a large price to pay for losing a parent too soon. God forbid, it never happens.

Knock on wood with both knuckles.
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*Yes, this policy was agreed to by my spouse. It will be confirmed as separate property asset and not part of my community property estate with my spouse having no right to make a surviving spouse election against the policy. Besides we have reciprocal policies for our community property revocable trust.

In Loving Memory.

Over 4th of July weekend I hosted a lovely 50th birthday party for a very dear friend of mine. We met over ten years ago when I worked at The Aerospace Corporation. We've remained good friends over the years. She had a big bash for her 40th birthday. I don't remember being there, but there are pictures to prove it. Two years ago I offered to host the 50th birthday bash. And we did with an awesome salsa theme replete with salsa dance lessons, mojitos and delicious pulled pork.

During the course of the party, I met all of her wonderful friends and family. I spent a considerable time talking to the most amazing couple about their 3 boys, remodeling backyards and their passions in life. My husband and I had a terrific day getting to know this couple. I even told my friend after the party that they were so wonderful, kind and loving.

I received an email this morning saying that they were killed in a car accident on vacation over the last weekend in July. Their three boys survived the accident unhurt losing their parents.

I am in complete shock. Personally, I hate road trips. But, running over and over in my mind, is that this is a just a smack dab real life reason to get your affairs in order.  Families with young children need to have estate planning in place. We need to name guardians for those babes (they were 3, 5, and 8 years old), have life insurance policies for them and do everything possible to minimize their grief.

May they rest in peace. May their boys have the strength and courage to mourn their parents and live their lives knowing that their parents loved them dearly.

Hypocrisy.

I am not a hypocrite. I talk about the importance of estate planning all day long because I know why it's important. My parents passed away when I was in my twenties eight years apart. My brother and I had to open probate for my Dad's estate. It was torture. But this is not the reason for this post.

This post is about hypocrisy.

I listened to a presentation about disaster planning the other day. It was a powerpoint presentation and extolled the virtues of disaster planning. Very detailed. At the end of the presentation, my first question to the presenter who was a business owner herself, was do you have your own disaster preparedness plan in place?

Quick pause. No. [Ah ha! This lady does not practice what she preaches.]

Okay. At least when someone asks me if I have my own estate planning in place, my answer is yes. I had an attorney prepare the documents I talk about all the time for my family.

Yes, it's that important.

Eliciting a Fast Response? You Bet!

I had to laugh ... I was about to step out for a lunch meeting and checked my email one last time.

There it was. An email from a blog reader quoting my July 15 post where I wrote, buried in the middle of a diatribe on real estate and probate, that,  "I answer questions about estate planning all day long without charging anyone. A quick email or a quick mention in person will always elicit an answer from me."

Elicit being the key word.

The kind reader wrote in her email that "I am writing to you after I read in your blog that a quick email will always elicit a response from you." I had to reply. Her email was dated 11:44 a.m. and my reply* went out at 11:57 a.m.

Not too shabby, eh?

* Though my reply said I was going to a lunch meeting and would respond to her substantive question afterwards. LOL. I did respond more thoroughly an hour later in case you wonder.

Reviewing Your Estate and Financial Plans Is Like Baking a Cake.

I heard an interesting analogy this morning. It was about how often you should review and examine your financial planning. It is  apropos to estate planning as well.

The analogy was this:

When you bake a cake in the oven at 350 degrees, do you leave it there without checking on it? Of course not. You check it on it often either through the oven window or propping the door open during throughout the baking process. Would you leave it there for two years with the oven on and not checking it? The resounding answer from the audience was of course not!  [This is a chocolate cake analogy by the way ... note the use of the chocolate colored font.]

If you have a financial plan or estate plan in place, be sure to check on it often. It doesn't have to be every 15 minutes. Every year is a good milestone for a mental review.

For estate plans, you want to mentally note any changes in your family structure because of birth, death or divorce.  You will also want to note if you have recently acquired or any additional assets that need to be included in your trust or dealt with in some manner. You will want to also note if your wishes have changed with respect to your executors, successor trustees and beneficiaries of your estate plan.

And, lastly, consider reviewing your estate plan with an attorney every two or three years to ensure that your plan is both in compliance with and incorporates current laws.

Someone Noticed.

A lovely and blushing post about how I practice law as one of countless solos with a heart for clients from Carolyn Elefant, Esq.

Carolyn's website My Shingle is "a website for and about solos and small law firms..." Carolyn's practice revolves around energy regulatory work and renewable project development.

Thanks for noticing.