5 Myths About Starting an Estate Plan and Why They Aren't True.

1.    “I don’t have an estate. Why would I need the services of an estate planner?”

You may not own a second home, or even a first one, but chances are you have an estate and just don’t realize it. A house, household furnishings, motor vehicles, art work, investment accounts, stock options, comic book collections, and anything else that you own is part of your estate.  By this definition, we all have an estate, even if it is just a bicycle and a running balance in a bank account.

The common misconception is that only the wealthy can benefit from the services of an estate planner, but the process of estate planning is customized to match your individual needs, and accommodate an estate of any size.  Even the most basic estate plan can ensure that you have a Durable Power of Attorney in effect, for making both medical and financial decisions in case you become incapacitated.  It could also provide at least a will, which lays out your final wishes as to the division of assets among family members and friends. From there, based on how complex your asset portfolio or family may be, you can build and protect your assets during your life, and after.

2.    “I’m too young to need any estate planning documents. That’s not something that I need to worry about until I’m older.”

If you are old enough to have “big kid” responsibilities such as home ownership, parenthood, managing financial investments, or running a business, you are certainly old enough to begin putting together an estate plan.  It’s not the age of a client that dictates their need for estate planning, it is their asset portfolio and the family surrounding them that matters most.

Life throws us curveballs.  Some day, you may realize that you have never been, and never will be, invincible or clairvoyant.  There is no minimum age for when undeservedly bad things happen to you and completely upend everything in your life.  Not that I want you to spend your time living in fear, but when you have a family or business depending upon you, wouldn’t it be nice to know that there is a game plan in place in case something happens? The answer is: yes.

3.     “I drafted a will from a free online template. That’s good enough, right?” 

With the advent of the internet and immediate access to information, we know just enough about a lot of things to be a danger to ourselves and others. Although drafting your own estate planning documents isn’t as ill-advised as, say, extracting your own wisdom teeth with nothing but a crescent wrench and a YouTube video, there is a reason why most people would seek the advice of an estate planning attorney first.

It’s not that I doubt your intellect to fill out an online will template, and it’s not because I am a glutton for punishment and took not one, but two different state bar examinations, earning the privilege to call myself a lawyer.  It’s just that, during my time as an attorney, I have seen the end results of self-help legal services that are neither pretty nor cost effective to try to clean up after the fact.

Drafting your will does guarantee that you have something in writing…and something is better than nothing. But if it’s not the right something, if it isn’t drafted properly, or doesn’t include the necessary language to accomplish what you think it does, you are better of spending your time refining your home dentistry skills.

There are plenty of day-to-day tasks that you can do with out the professional assistance in order to save money. You can mow your own lawn, clean your own car, dye your own hair.  When it comes to drafting documents that will nominate the guardians of your young children and provide for their wellbeing if something happens to you…at the very least take what you have drafted to an attorney for review.  Your family deserves at least that much consideration.

4.    “My children have a great relationship, so I trust that should anything happen to me, they will be able to handle my affairs without any conflict.”

No. No, they won’t. If there were any positive correlation between the strength of a family’s relationship before and after an estate administration, I would be out of a job.  There is nothing like a little residual sibling rivalry, mixed with raw emotion caused by the loss of a parent, and sprinkled with money to incite a first class Battle Royale.

Even a carefully drafted estate plan won’t entirely eliminate the possibility that someone will have their feelings hurt by your directives.  It can, however, serve as evidence of your intent and can stop a lengthy litigation in its tracks.

No relationship has been made stronger or better by years of litigation. If you aren’t specific about whom you want acting as your trustee/executor/agent, and what percentage of your assets go to each of your beneficiaries, your name may be come synonymous with a four letter word in the eyes of your family. If you care about your children, and wish for their relationships to flourish as they grow older, draft a specific estate plan and talk to them about it when they reach the appropriate age.

5.     “Estate Planning attorneys are expensive and I can’t afford to hire one.”

Some attorneys cost more than others, but that doesn’t mean that there aren’t affordable attorneys providing high quality estate planning services.  Nor is it worth the risk of not hiring one (see Myth #3 above).

I encourage people to do their footwork when looking for an estate planner in their area. Ask for referrals from trusted friends, co-workers, or professional advisors.  Meet with a few attorneys to get a sense of those with whom you will feel most comfortable.  The estate planning process is fairly invasive and personal, so you want an attorney who you trust. 

As part of this interview process, inquire as to price (hourly, flat fee for packages of services).  Most attorneys, including myself, offer new estate planning packages at a flat fee.  I prefer this method because I can spend more time educating my clients on the documents that we are drafting and neither party is watching the clock. The price range will vary, depending on your region (San Francisco tends to price higher than, say, Sacramento or Lake Tahoe), so it’s a good idea to shop around.

Keep in mind, estate planners provide a service that is intended to save your estate sometimes tens of thousands of dollars in probate, litigation, and tax expenses.  It may be a big initial out of pocket expense, but peace of mind and saving your family money and time later on are invaluable investments.

For more information on the estate planning process and the services offered by KJS Law, please join us on Wednesday, June 18th at 5:30 PM at Tahoe Mill Collective (150 Alpine Meadows Rd, Tahoe City, CA) for Drink Responsibly: An evening of beers, brats, and basic insights on financial and estate planning. More information can be found here.

Drink Responsibly June 18th, 2014

Join Kate Shaw, from KJS Law, and John Manocchio, financial advisor with Waddell & Reed on Wednesday, June 18th at the Tahoe Mill Collective for Drink Responsibly: An evening of beers, brats, and basic insights on financial and estate planning.

The evening will begin with brief presentations by both Kate and John covering a broad introduction to financial and estate planning services, and how anybody can benefit from both. 

Following the presentations, Kate and John will host a complimentary micro-brew and sausage tasting flight. During this time, guests are encouraged to follow up with the presenters and ask any questions they may have, meet new people, and enjoy a beer. 

If you or anybody you know is interested, invite them to join the party on Wednesday, June 18th from 5:30-7:30 pm at the Tahoe Mill Collective, located at 150 Alpine Meadows Road.

Rsvp by June 17th to kate@kjslawtahoe.com or jmanocchio@wradvisors.com.

Drink Responsibly

MARK YOUR CALENDARS!

WHEN: Thursday, April 17th, 2014 at 5:30 pm

WHERE: Uncorked Truckee, 10118 Donner Pass Rd, Truckee, CA 96161; (530) 550-5200

WHAT: Drink Responsibly; An Evening of Fine Wines Paired with Useful Insights on Financial and Estate Planning.

Join KJS Law and John Manocchio, financial advisor with Waddell & Reed, for a brief information session on how basic financial and estate planning can benefit you.  Following the presentations, there will be a complementary wine tasting and light refreshments served.

This event is open to the public, so bring your partner, family members, co-workers, neighbors, or friends and come learn a little more about financial and estate planning.

RSVP to kate@kjslawtahoe.com by April 16th.

Hope to see you there!

Thinking Outside of the Estate

What is the first thing that you think of when you hear or read the phrase “estate planning?”  Is it a sprawling countryside compound, complete with the Bentley parked in a front and a butler to greet guests?  I want for you to strike that image from your brain because, contrary to that common misconception, you don’t need an “estate” to benefit from the services of an estate planner. 

No matter what you own, how old you are, or your tax bracket, an estate planner (like me!) can work with you to draft a series of documents to provide benefits while you are living, as well as once you have passed on.

Because estate planning goals and objectives vary and are dependent upon every client’s individual situation, an estate plan can be fully customizable to the extent that the law allows.  For high net worth clients, the focus is often on tax planning and ongoing asset management for generations to come.  But for other clients, where there may be no real tax benefits available, a planner is often drafting to ensure that debts can be paid and family members are provided for should the need arise.  Variables such as your asset portfolio and family situation (married vs unmarried vs married for a 2nd or 3rd time; children under the age of 18 vs adult children; no living heirs; etc.) are balanced against what your long-term goals and objectives may be.  Taking those variables into consideration,  a planner can then determine what documents need to be drafted in order to accommodate all of your needs.

The process itself is consistent regardless of the client.  It begins with the initial consult to identify such variables as stated above.  It’s also an opportunity to educate the client on how estate planning works.  I find that most people are intimidated by the idea of not only addressing their own mortality, but actually planning for it.  This initial consult is intended to answer questions and set aside any reservations that clients may have.

For the sake of efficiency, I provide my new clients with a questionnaire requesting a wide range of personal, family, and financial information.  This information-gathering process at the beginning of any estate planning relationship is by far the most labor-intensive period for the client.  It’s also incredibly important as it provides the most accurate snapshot of the client’s situation and assists me in determining what specific documents the client may benefit from.

The most important step for any client is to identify who the players in their plan will be.  By players, I mean the people that you nominate to take over for you if or when you become incapacitated or die.  These designations can come in the form of trustees, executors, agents acting as the Power of Attorney for either financial or medical decisions, or the guardians of young children.  With each designation comes a hefty task of managing assets, administering the estate (dividing assets, paying taxes, paying creditors upon your death), or raising children.  I counsel my clients to sit with these appointments and really evaluate those whom they want to take on these responsibilities.  It is not about loyalty or popularity. It is about trust.

Once I have all of the information in front of me, the drafting can begin.  There are a myriad of documents that we have available to us as planners. Just to name a few, we can use a combination of trusts, wills, and power of attorney documents to create a shield to guard our clients from the unexpected. 

After the documents are finalized, I am there to help my clients put these documents to work.  For example, assets may need to be transferred into a trust that we have created or copies of your estate plan need to be distributed to family members.  I can help with that.  I also make sure that my clients take copies of the Power of Attorney documents to their financial institutions and medical providers.  In this very litigious world, many financial and medical institutions prefer to have a signed Power of Attorney document on their own letterhead or prepared by their legal teams, for added protection. 

In addition to being customizable, the estate planning process provides flexibility; however, an estate plan is only as effective as you allow for it to be.  Just because the documents are signed and executed doesn’t mean that the process is finished. To the contrary, estate planning is an ongoing process and requires the client to review and update their plan as they go through life.  Only then do they maintain the security and protection that an estate plan is intended to provide.

The trickiest part of planning is that we are doing our best to predict the future and account for just about every “what if” scenario that could present itself.  In a perfect world, you plan for and prevent any disaster that may come your way.  Alas, the world is not perfect and it is nearly impossible to know what will happen next year, next week, or tomorrow.  This is true whether you are 25 or 85, live in a modest single family home or that sprawling country spread that we talked about earlier. With a well-crafted and maintained estate plan, just about anybody can defy the odds.

Have questions about what sort of an estate plan might work best for you, or want to schedule a free consult? Feel free to email Kate at kate@kjslawtahoe.com.

Let the Re-framing Begin!

Welcome to the KJS Blog!  This first entry marks a big milestone in my life, better known as My First Blog Post Ever.  The pressure is on, and my challenge lies in the content- relevant to my services, nothing too personal or tangential.  This estate planning blog is going to cover far more interesting topics than just death and taxes.

My objective as both an attorney and small business owner is to appeal to a less conventional audience.  Older and wealthier generations have long been the target market for estate planners.  However, today’s estate planning clients no longer fit the mold.  They are young families who want the security of knowing that if something happens to them, their spouse and children will be protected.  They are a newly married, same-sex couple who, courtesy of the recent US Supreme Court Ruling, may now reap all of the tax and estate planning benefits that have long been afforded to only heterosexual couples.  They are single parents seeking to insure that appropriate nominations are made for the guardians of their young children.  The bottom line- everyone has a need for estate planning, they just may not know it yet.

Each post will walk through a component of estate planning so that you, too, can realize where the benefits lie.  Discussing your future, finances, and family will be interesting, relevant, engaging.  Be prepared for a broad range of messaging- videos, commentary on current issues that directly or indirectly play into my practice (and your future).   You might laugh, you might cry, but most importantly, you will gain insights into how estate planning can work for you.  

Now, it just wouldn’t be a legal blog without some ground rules. First, none of the information conveyed in my blog posts are intended as legal advice, nor does it signify the commencement of an attorney-client relationship.  This content is for informational purposes only.  There are no duties of confidentiality owed because in case you have forgotten, this is the internet and a public site.  Nothing is anonymous.  If you read a post and have questions that are specific to your situation, I encourage you to email me directly rather than post the question in a comment to the post. 

Secondly, I am licensed to practice law in the great states of California and Washington (with Nevada hopefully joining in on the fun in 2014).  There will be posts that cite to CA or WA estate planning issues specifically and some information that is incorporated in general practice regardless of the state.  I will be sure to clarify this in my posts.  If you have a question that is state specific, please contact me and I can do my best to refer you to an attorney in your home state who may be able to better help you.  

Thank you for taking the time to check out my blog.  Stay tuned for the next installment.