The following article is written by Fellow Estate Planning Attorney, Alexis Martin Neely
I have major mixed feelings about LegalZoom.
I’m not going to lie, I am mighty impressed by the business acumen of the lawyers who started LegalZoom. Generally speaking, lawyers are the worst business people, but not these guys. They are smart.
And I’m pretty impressed that they’ve got the American public thinking about proactive legal planning for their businesses and their families. It’s a great first start considering that 69% of you haven’t even named guardians for your kids!
What concerns me though is that people are relying on legal documents alone and not getting legal guidance and they think everything is good to go, when it’s often not.
The truth of the matter is that oftentimes creating your own legal documents provides a false sense of security and the breach is only discovered when it’s too late to do anything about it.
It’s kind of like if you built your own house during the summer when the weather was really good and you thought you knew what you were doing, but unknowingly overlooked a key element like putting waterproof felt between the sheeting and the shingles (who would know that, I thought you’d just put the shingles right on the wood).
You might not find out right away that you had overlooked this important item, but a couple years later the sheeting would start to rot away and by the third winter you’d have rain and snow in your house and by the time you figured out what you had done wrong, it’d be too late to do anything about it.
It’s the same with do it yourself estate planning, really.
It will seem really easy and as if you’ve done everything you’re supposed to do. And, you’ll go through your life thinking that you’ve done a really good thing for your family or your business. But then, a crisis will come, like a lawsuit, hospitalization or even worse, a death. And your family will be scrambling to figure out what to do and quite often, they’ll find out they’re screwed by something simple, but integral, you overlooked.
Like not titling the ownership of your house properly. Or, not signing the bylaws for your corporation. Or not issuing the share certificates. Or, not signing your Will properly. Something that seems dumb, but is super easy to miss. Even for lawyers.
Sadly enough, it doesn’t only happen when you do it yourself; this false sense of security can happen when you work with a lawyer too. In fact, most estate plans in place today are in grave danger of failing. My own father-in-law spent thousands of dollars on an estate plan and we ended up in Court probating his Estate anyway.
I’ll tell you more about what happened and what to look for in your own estate plan to make sure that doesn’t happen to your family next week.
In the meantime, if you are going to do it yourself, take this advice:
1. Get whatever you do reviewed by a lawyer. It’s better to know than to wonder. Contact a Personal Family Lawyer to review your Do It Yourself Legal Documents (Suze Orman Will & Trust Kit, LegalZoom, Trust on the Web, any of them) and if you use certificate code DIY, they’ll waive the $950 existing plan review and consultation fee.
2. Make sure you do the whole job, not just part of it. For example, if you incorporate yourself, don’t think filing documents with the State alone is the final step – you need corporate operating documents, you need to issue stock or membership interests, you need contracts and board resolutions, meeting minutes and a registered agent. If you don’t have all of these things (and more) your personal assets are not protected from your business risks.
3. If you have kids, make sure you’ve adequately provided for their care. Most do it yourself legal products (and lawyers themselves for that matter) don’t adequately plan for the things parents really care about. For less than $15, my book, Wear Clean Underwear! A Fast, Fun, Friendly-and Essential-Guide to Legal Planning for Busy Parents, will guide you to exactly what you need to do and help you fix whatever you may have done wrong.
Doing something is better than nothing, but doing something wrong and thinking everything has been taken care of is the worst of all.
"Written by Alexis Martin Neely, author, speaker, Personal Family Lawyer, Family Financial & Legal Expert for Better TV and MOM. Alexis makes it super easy for your family to talk about and plan for sticky subjects like money, death and taxes. Subscribe to Alexis’ free online magazine "Family Wealth Secrets" at: www.FamilyWealthMatters.com."
I found the article repinted below in the San Jose Mercury News, about an "End of Life" case going on right now in Fresno. Thanks go to fellow Personal Family Lawyer John Erik Fraker of the firm Ainer & Fraker, for alerting me to this case.
As the title indicates, there are definite parallels to the Terry Schiavo case.
The potentially more terrifying part about this case: The family is in agreement that she should be kept alive, but it is the Public Guardian (acting as conservator) who is petitioning the Court to remove life support – WITHOUT any indication that this is what the patient would have wanted.
If that doesn’t get you motivated to fill out an advance directive, nothing will.
A question of life support
FRESNO CASE HAS ECHOES OF SCHIAVO STORY
Article Launched: 07/28/2008 01:32:32 AM PDT
FRESNO – Three years after the fight over Terri Schiavo pulled the nation into the end-of-life debate, the case of a comatose Fresno County woman is reopening old wounds – and could prove more inflammatory.
The family of Janet Rivera, 46, wants to keep her alive in a Fresno hospital. The county, acting as her legal guardian, wants a court to decide whether that’s the right thing to do.
Among the questions her situation has raised: Should a government agency be able to overrule family members and withhold life support when the patient’s wishes are unknown?
The Terri Schindler Schiavo Foundation helped find a lawyer to represent the Rivera family, said Schiavo’s brother, Bobby Schindler.
Rivera’s situation is more alarming than his sister’s, he said. "We had a family dispute," he said. "This is a family in agreement."
Doctors said Schiavo, 41, was in a persistent vegetative state, and her husband, Michael Schiavo, decided to have the feeding tube removed. The Schindlers wanted her kept alive. After a lengthy court fight, the tube was removed in 2005; she died 13 days later.
In Rivera’s case, the county became involved after the hospital contacted the Public Guardian’s Office. According to court records, one of the concerns was that Rivera’s conservator at the time – her husband – was not making decisions related to his wife’s health.
Dr. David Hadden, the county’s coroner, public administrator and guardian, has said the county did not seek to become conservator. He said he decided to seek a judge’s opinion because five doctors have said Rivera’s condition is untreatable and irreversible.
The county removed life support July 11 but had it reinstated Tuesday. Hadden said he restored it because Rivera was surviving longer than expected and he wanted to hear a judge’s opinion. A Fresno County judge on Wednesday granted a temporary order for life support to continue until the case is heard this week.
Rivera has been comatose for two years following a heart attack. It’s unclear what her preferences about life support would be.
"We never really talked about life and death things much," said Rivera’s brother, Michael Dancoff of Berkeley.
Experts say the county is taking a chance by trying to make an end-of-life decision for Rivera.
It’s unusual for a conservator to argue for removing life support without evidence that’s what the patient would want, said David Magnus, director of the Stanford Center for Biomedical Ethics.
While Hadden says financial considerations have played no role in deciding whether to keep her on life support, her family contends Rivera might not be in this situation if she had more money or better health-care coverage. Rivera’s medical bills are being paid by Medi-Cal, the state-federal insurance program for low-income families.
Today’s post is from guest blogger William John Camp of Warner Robins and the law firm of Westmoreland, Patterson, Moseley & Hinson. In my opinion (and in the opinion of many other attorneys in Georgia) John is the premier attorney in Georgia of family law issues related to the military. He has been invited by the Chair of the ABA Military Family Law Committee to draft legislation that would provide greater protection to members of the Armed Forces who are deployed to locations that will interfere with their custody/visitation of their children. He also worked with the Georgia Child Support Commission and wrote the section on the Amendment that concerns computing Gross Military Income.
Mr. Camp has 22 years of legal experience as an active duty Air Force Staff Judge Advocate to assist military and federal civil service clients in addressing their Family Law matters. Whether it is federal benefits, pensions, child support, or complex custody and visitation matters, Mr. Camp knows first hand the problems faced by members of the Armed Forces and the federal civilian work force when they proceed through a separation or divorce.
His 31 years experience as an attorney is not reserved just for his firm’s military clients. He practices exclusively in Family Law and provides all of his clients with practical and down-to-earth advice when addressing their concerns. His experience and steady manner brings confidence to a turbulent time in our clients’ lives.
A frequent speaker for the Georgia Institute on Continuing Legal Education and Mercer Law School, Mr. Camp lectures to other attorneys across the State of Georgia on dividing military and federal retirement pensions, international issues on custody and support, and general family law matters.
In the 2008 Amendments to the Georgia Child Support Guidelines, there has been a significant change in how we compute Gross Income for Members of the Armed Forces. The effect of the new law is to limit what is included in Gross Monthly Income to be (in most cases) only three components: (1) Base Pay; (2) Basic Allowance for Subsistence (BAS); and, Basic Allowance for Housing (BAH) at the without dependent rate determined without in any area of assignment variable housing costs. The Judge or Jury may, however, include Special and Incentive Pay; Family Separation Allowances, and Cost of Living Allowances if it chooses.
The BAH figure that will be used is found in the 2008 Military Pay Tables accessable at the Defense Finance and Accounting Service Website: ( http://www.dfas.mil/militarypay/militarypaytables.html). At page 2 of the 2008 Pay Chart, there is a Table entitled "BAH RC/T" with columns showing the "with dependents" and "without dependents" rates based upon Pay Grade. The column with the "without dependent rates" is the one that will be used to compute Gross Monthly Income. This rates in these two columns are the portions of the BAH that does not have "location variable housing costs". (For Authority, see: http://www.defenselink.mil/militarypay/pay/bah/02_types.html)
If an attempt will be made to include the Military Member’s Cost of Living Allowances, Family Separation Allowances, Special and Incentive Pay items, etc., the computation of the monthly gross pay becomes much more complicated.
Military Bonuses are ALWAYS included in computing gross monthly income. However, only a few military members receive bonuses, and they are typically paid one each year and do not appear in their Military Leave and Earnings Statement. They would however, appear in the their IRS Forms W-2.
Q: Wills vs. Trust. . . why do you say we need both?
A. A Will is a legal document that tells a Court how you want your assets to be distributed after your death. If you have over a certain amount of assets (varies by State), it requires the Executor to go into Court and get an order from the Court to distribute your assets using a process called Probate. Probate can take quite a long time in some states and is typically quite expensive. The worst part is, it’s totally public and subject to the oversight of a broken court system. It is only operative in the event of your death and not your incapacity, so your loved ones could have difficulty getting access to your assets in the event that you were in the hospital and could not communicate.
A Trust is a legal document that tells a Trustee (chosen by you as the creator of the Trust) how you want your assets to be handled if you are incapacitated or in the event of your death. So long as your assets are owned properly by the Trust, it does not need to be brought before the Court, so it’s totally private. And, the person you choose as the Trustee has totally control over the process, which is often a lot less expensive and much quicker than the Court process called probate, which is required with only a Will.
You need to have both because a Trust only works if your assets are owned in the name of your Trust and sometimes an overlooked asset gets left out and it will be subject to the Will.
Q: What is a living will? Why does each person need one?
A: A Living Will is a document that lets your doctor and other healthcare professionals know how you want healthcare decisions made for you if you cannot communicate and should appoint an agent to make those decisions for you. It’s also known as an Advance Health Care Directive or Health Care Directive.
Every adult needs one so that there is no question about whether they want to be kept alive on life support or given hydration or nutrition in the event that they are permanently incapacitated.
Everyone remembers the Terry Schiavo situation in Florida in which Terry’s husband and parents disagreed about Terry’s wishes. The case ultimately went to the Florida Supreme Court and even the State Legislature. A simple document would have made all of that unnecessary.
Today, it’s critical that a Living Will or Advance Health Care Directive also include provisions appointing an agent under the Health Insurance Portability and Accountability Act or HIPAA so that the agent can access your medical records if it’s necessary to make medical decisions.
I worked with one client who was not able to get her mom moved from the hospital where she was on life support to a rehabilitative medical facility for where they may have been able to wean her off life support for over 3 weeks because mom’s health care directive documents were lacking this critical appointment.
Q: What is probate and how does it impact/affect the dispensation of the will?
A. Probate is the Court process that assets must go through whenever anyone dies with anything titled in their own name. Each State has a different cut off on the amount of assets someone must have before a probate is necessary. In California, if someone has less than $100,000 in assets and no real property, they will probably not have to have their assets probated.
The way this comes up is that someone dies and then their family wants to either close bank accounts, sell property or cash in investments. None of this can be done without an order from the Court through a probate if the assets were owned in their loved ones name.
In contrast, if the assets are owned in the name of a Trust, the family can contact their loved ones’ lawyer (hopefully they were working with a Personal Family Lawyer so they know the assets were titled correctly and they have a trusted advisor to turn to) who will complete some paperwork and guide the loved ones through the process with ease.
Find a Personal Family Lawyer at http://personalfamilylawyer.com/lawyers/find.php.
Q: Who should have a Will/Trust?
A. Anyone who cares about their family and wants things to be as easy as possible for their loved ones after they are gone or if they become incapacitated should have a Will and/or a Trust. But, just having these legal documents is not really sufficient.
What’s really going to make things as easy as possible after the death of a loved one is a relationship with a trusted Personal Family Lawyer.
You see, form legal documents are not going to guide the family; only a relationship with a trusted advisor will do that.
Q: What happens to your money/property/debt after you die?
A. After you die, whoever is in charge of finalizing your estate will inventory all of your assets and liabilities. It’s best if you’ve left behind an easy to follow inventory. A Personal Family Lawyer conducts a Family Wealth Inventory with his or her clients and then updates that document throughout life so its easy to access when something happens.
If the assets are greater than the liabilities, the person in charge of the estate will use the assets to pay the liabilities and then distribute whatever is left pursuant to the Will or Trust. If there is no Will or Trust, then the Court will order the distribution according to State law.
If the liabilities are greater than the assets, the person in charge of the estate will notify the creditors, pay what can be paid and close the estate. In that case, there would not be a distribution to loved ones.
Q: How can you protect your surviving loved ones after you die?
A. The best thing you can do for your surviving loved ones so that life will be as easy as possible for them if you can’t handle your own financial affairs during life and then after your death is to establish a relationship with a Personal Family Lawyer during your lifetime.
If you do that, you will have made the decisions about how you want everything to go after you are gone with a trusted advisor to guide you to the best possible solutions. And, you will leave your loved ones with a gift far greater than money or things; you will leave them feeling loved and well taken care of. They will never have to wonder what to do or how to do it because the lawyer you worked with during your lifetime will be there to guide them.
Q: What do parents need to know in order to protect/provide for their young children?
A. Parents need to know that one of the first calls they make after their baby is born (or even before) is to a Personal Family Lawyer who will guide them to structure their money and their life in the best way possible for their child’s future well-being and care.
Parents must name both short-term and long-term guardians for the care of their kids. And, they must give clear instructions to all of the people they choose. If they don’t do this, they leave their kids’ future in the hands of a broken Court system and a judge that doesn’t know what’s important to them.
Parents must also be clear about the Values, Insights, Stories and Experience they want to pass on. And, they must make sure that the money they leave behind will be immediately available to whoever they choose to raise their children, in a protected manner.
All of this is easy with the guidance of a Personal Family Lawyer, but can be a real nightmare for the families of people who die without planning.
Parents can be guided through an easy three-step process of choosing the right people as guardians for their kids and learn how to avoid 1 of 6 common mistakes at http://gakidsprotectionplan.com/.
SOURCE: Family Wealth Matters Blog
While reading my Twitter posts this week, I was very pleased and surprised to see a post from @lexmonitor indicating that I was named featured author of the day for July 23, 2008! LexMonitor is a daily review of law blogs and journals highlighting prominent legal discussion and the professionals participating in this conversation.