Planning At Different Life Stages

Individuals need different estate planning instruments at different times of their lives, essentially building on what they had earlier.

1.  An 18 year old should have a health care power of attorney and HIPPA disclosure form so parents can assist with medical decisions.

2.  Unmarried and recently married couples need wills and health care documents to take care of each other during sickness and after death.

3.  Couples with young children need wills and trusts to designate a guardian and to provide for their children.

4.  Divorcing couples need to revise documents to remove the soon to be ex-spouse from them.

5.  Re-marrying couples need a pre-nuptial agreement and perhaps a trust to provide for the new spouse, but ultimately distribute assets to children from a prior marriage.

In summary, for the recent high school grad, the soon to be betrothed, or soon to be re-married, the ideal present is a gift card for legal services.      

Nora Ephron's Lists

"When Harry Met Sally" remains one of my favorite films.   Nora Ephron, its screenwriter died yesterday.  In her last book, Ms. Ephron mentioned a humorous list of items she will not miss and items she will miss after death.  

The not missed list is dry skin, Clarence Thomas, the sound of the vacuum cleaner, and panels on “Women in Film."

The missed list is her kids, Nick (her husband), taking a bath, coming over the bridge to Manhattan, and pie.

Update 6/27:  After today's Obamacare decision, apparently Chief Justice Roberts will now be on the missed list.  Unfortunately.  

RIP.

Health Care Power of Attorney

As part of an estate plan, an individual should have a health care power of attorney to make medical decisions in the event of incapacity.  Key factors/characteristics of a decision maker are:

1.  Level head.
2.  Question raiser.
3.  Lives near the individual.

Under these criteria, I doubt the Lohan family would designate Lindsay to make their decisions.  

Wills, Privacy and Joe Paterno

Wills are public records.  Any assets distributed by the will are also public.  In Hamilton County this info is all accessible  on-line.  

Joe Paterno's family recently was criticized because they asked for, and received, permission to keep his will under seal. After a bit of an outcry, they agreed to remove the seal.

A few thoughts on this issue:

1.  The will is vanilla - all of his assets will go to his trust agreement.  I see no reason to keep this info private other than general public figure hubris which thinks that laws and policies for everyone else do not apply to public figures.  c.f. Geithner, Tim and Rangel, Charles among others.

2.  By asking for an exception to the privacy rules, the family and its attorneys made this a public matter.  Now, they have attorneys in Cincinnati opining on the will and their privacy request when it would most likely have remained under the radar for everyone except those in State College.    

3.  The interesting info that the family would like to keep private is the net worth of JoePa.  This info could have been remained private if the trust were funded during JoePa's life, or if the financial assets had transfer on death designations.

I do not know if the assets were re-titled in his trust, but there is no excuse for not doing so.  Anyone who is  85 years old should make sure that his estate plan is current and assets are titled properly.  An 85 year old with an aggressive form of cancer should make sure to review his estate plan and asset titling as of yesterday.      

The Worst Estate Planning?

Fifteen years ago, a friend mentioned to me that divorce is the worst kind of estate planning.  Those words ring true not only for estate planning, but also financial planning.  Accordingly, here are 10 things a divorce lawyer will not tell you.

n.b.  It is purely coincidental that today is my 19th wedding anniversary.

Advice for Executors

In these 7 tips for executors, I think the two key tips are:

1.  Seek professional advice.
2.  Do not rush the process.  I advise my clients that the probate process is a marathon, not a sprint.  Of course, if the executor follows tip one, he would know this.  

You Have a Will, Now What?

Once you have a will, you should do the following to make the executor's eventual task easier:

1.  Inform your executor where the will is located.
2.  Place a list of your financial assets, including life insurance policies, with the will.
3.  Place a list of on-line passwords with the the will.
4.  Place a list of instructions about various items of personal property with the will.

Do not place the will in a safe deposit box - it will be inaccessible.

Living Wills - Making Them More Effective

Living wills are great conceptually, but can be vague when actually needed.  Some advisors propose making them more detailed and walking people through a lengthy series of questions about specific situations.  Because this topic makes clients squeamish on a good day, and because clients' wishes about death change as it becomes more imminent, people either would not complete a living will or it would not reflect their current wishes.  The proposed solution is no solution.

Instead, I recommend executing a health care power of attorney in addition to the living will.  The health care power of attorney allows  a family member to make decisions for the incapacitated client.  After executing the health care power of attorney, it is imperative to discuss wishes with the designee. Of course, with Obamacare's "death panels," perhaps this will all be moot.      

Avoiding Rogue Trustees

Choosing a trustee to manage funds for your children is second in  importance only to choosing a guardian for them.  I advise separating the trustee and guardian duties.   Unlike the author, if there is no perfect candidate, I recommend a bank or trust company rather than two "B" candidates.   After all two Bs, still average a B.  If there is not a suitable family member, go for the "A" of professional investments and management provided by a trust department.  

Telling Your Children About Your Estate Planning

What should you tell your children about your estate plan?

1.  Which child is in charge of the estate.
2.  Which child is in charge of the medical decisions and what your wishes are.
3.  Where the documents are located.

Do not tell them which child you love the most/least.