Archive for the ‘Uncategorized’ Category

Building Up Your Business During Summer’s Typical Planning Slowdown

Wednesday, July 6th, 2011

Family vacations tend to dominate the summer months.  Friends and relatives say nothing is quite as stressfull as planning and packing for the long awaited warm weather holiday.  As the mercury climbs your client’s interest in discussing financial matters may decline.  Let’s change that trend.

The Summertime Business Blues 

Once school is out, advisors generally see a slowdown in new clients who are contemplating estate planning.  Parents are taking children on vacation; grandparents retreat to summer hideaways to escape the heat.  The pace of life simply slows down. 

One of the most stressful pre-vacation conversations among families deals with the status of their estate plan and life insurance plans.  Are they current?  The conversation usually goes “Let’s hope that nothing happens, and we’ll deal with it when we get back.”  When the family does get back, however, the topic falls off the “to-do” list until next summer’s hiatus. 


A Pre-Departure Checklist

Over the years we’ve picked up ideas on dealing with summer slowdown.  One way is to keep financial planning lively in your clients’ minds is to create a legal and financial pre-vacation checklist. 

You can send it to your clients via a letter, a fax, an e-mail, a Twitter link to your blog post, a Facebook post, or whatever method works best for you.  Our sample checklist looks like this:

  • Tell your trustee or executor where all of your important documents are located, and make sure they have access to them.  For example, if you keep your important papers in a safety deposit box or safe, make sure you leave them the key or combination. 
  • Review your life insurance policies.  Do you have enough coverage?
  • Double-check the beneficiary designations on life insurance, retirement plans and annuities.  Are they coordinated with your estate plan?  (In my experience,  most are not.)
  • Is your living will and health care power of attorney up to date with the HIPAA Act?
  • Has anything changed thaty your advisors need to know about before you leave town?

A Guilt Free Summer Vacation

If you are working with a family that understands these important issues and wants to do some estate planning before they leave town, don’t worry.  Feel free to contact my office.  Once we know your client’s timeline, we can get the work done before they go.  There’s nothing like leaving for that summer vacation free from guilt and worry!

Living Trusts Provide Protection For Your Potential Incapacity

Wednesday, June 8th, 2011

Revocable Living Trusts serve several important functions in estate planning.  I have already discussed how a Living Trust can be a powerful tool to help an estate avoid probate court (saving time, money and anguish) and how they can provide divorce protection for your children.

Another way a living trust can protect you is in the event you are no longer physically or mentally capable of handling your own affairs.  What are the chances this will happen?  Nobody knows.  Life brings unexpected changes (i.e., car accidents, diseases and other crises).  But if we take time to plan for these potential events, you can save the inevitable stress and problems that accompany declaring someone legally incapacitated. 

Don’t Do Nothing

There are serious consequences that arrise from having made no arrangements from such a situation.  If you own property in your name and you become incapacitated a Court will set up a conservatorship in the state of California.  The Conservator will be named by the Court, not by you.  Many Conservators draw a fee for their services from your estate.  Family members might vie for this position, possibly creating discord against them. 

Any contact that the Court appointed Conservator has with the Court creates additional expenses, which further siphons away your financial resources.  Conservators must file annual accountings and reports with the Court, requiring even more additional expenses.  Judicial proceedings are also generally a matter of public record and your family might be forced to air it’s public laundry publicly.

Living Trusts Save Money

Extra legal fees can be avoided if you create a Living Trust  naming someone specifically to assure the role of Successor Trustee in the event of incapacity.  Through a Living Trust you avoid having a Court appointed Conservator oversee your assets, stop the unnecessary depletion of your estate by legal fees and decide how much to compensate your Successor Trustee.

Create Power of Attorney Documents


When drafing a Living Trust, I advise my clients to also create a Durable Financial Power of Attorney and a Healthcare Power of Attorney.  The same person can be selected by you to hold all three positions, or you can choose different people to hold each power.  Court appointed Conservators do not have the broader powers of administation that are granted by law to Successor Trustees.  By planning ahead, you can name a trusted person to handle your affairs and be assured that your wishes will be carried out and your best interests protected.  A Living Trust allows the Successor Trustee to assume the administration of the trust when you become incapacitated, avoiding a costly Conservatorship a lot of family distress. 

I hope this article has helped you.  If you have a specific concern, please contact our office (909)981-6177.

Living Trusts Provide Divorce Protections to Your Children.

Monday, May 16th, 2011

We have all had the question “My son is in a bad marriage.  What happens if we die and he gets divorced?  Does that mean his ex-wife gets some of our estate?”  This question can be solved by sharing one of the major, and often most overlooked, benefits of using a Living Trust – asset protection for the beneficiaries.

“Traditional” Living Trust Planning

The most common benefit of the Living Trust is to avoid the time delay and reduce the legal fees of after-death probate proceedings.  The time and dollar savings are significant.  In our experience, these benefits are “no brainer” benefits that should be enuogh to get any family to adopt the Living Trust as their estate planning strategy.

Interestingly enough, this is where a lot of planners stop in their design of an estate plan.  Once they are confident that the plan avoids probate, they call it a day and they’re done.  It works, but what if there was a bigger benefit beyond savings?

Protection from a Bad Marriage

The power of this benefit is often overlooked in traditional Living Trust planning.   If drafted properly, a Living Trust can provide divorceprotection to the after-death beneficiaires.  In our case, Mom and Dad are worried that their child is in a bad marriage and they don’t want to have what took a lifetime to build to go to his future ex-wife.  Their son is trying to make it work but it looks rocky.  Mom and Dad are losing sleep.  What can they do?

You, the clever advisor, recommend structuring their Living Trust so that if they die, their son can receive his inheritance; but since it’s kept in Mom and Dad’s trust, he never takes ownership of the assets.  The son can be in control of the money.  He can receive the income and, if necessary, access the principal; but if he gets divorced, his destined ex-wife can’t put a claim on his inheritance.  The power of this idea is astounding.  The ability to not only transfer wealth but do so in a manner that protects the assets for the next generation is a strategy that most families should strongly explore in their planning.

The “After-Death Pre-Nuptial”

The use of the Living Trust in this example allows Mom and Dad to sleep better at night.  They can provide their son with his inheritance and know that their Living Trust is providing the legal effectiveness of a pre-nuptial in that rocky marriage.  The flipside of this is if the son is in a good marriage.  Is this strategy still relevant?  Our answer: absolutely.  Relationships change: they con go from good to bad quickly.  Your clients can feel secure in knowing that you have helped them protect their children and their assets.

As always, I hope this was helpful to you.  If you have a specific case or concern, please contact our office (909)981-6177.