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DIY Wills

Consumer Reports reviewed 3 on-line will preparation services.  Their conclusion?

“Unless your needs are simple—say, you want to leave your entire estate to your spouse—none of the will-writing products is likely to entirely meet your needs. And in some cases, the other documents aren’t specific enough or contain language that could lead to an unintended result.”

When a client has an attorney prepare a set of estate planning documents, the client is paying for more than an attorney to correctly insert the names in the document. He is also receiving the attorney’s years of wisdom and experience in administering estates, knowledge of state specific laws, and general knowledge of human interactions through the estate process.

My conclusion? The difference between the attorney’s fee and the cost of a DIY package is small in comparison to the cost of a mistake or overlooking an issue in a self-prepared will.

The Very Rare Estate

I am back after a few weeks of slow estate planning news and 14+ days in Europe.

The story about the family who found a collection of pristine, old baseball cardsvalued at $3 million in their aunt’s attic is interesting for reasons other than the discovery of unknown  valuable assets.  First, it is very rare that an individual’s personal items are worth more than a few cents on the dollar.  Even more rare is the family that is drawn closer together when dividing personal items.

My experience is that distributing personal property, no matter how small the value, can lead to acrimony and hostile feelings between heirs.  To prevent acrimony, individuals should specify which heir is to receive specific items in a memorandum.  Any hostile feelings can then be directed to the deceased and relations among siblings can be preserved. Hopefully.

Ohio Intestacy Statute

When contemplating the big questions in life, did you ever wonder what would happen to your estate in the absence of a will?  Probably not.  But if you are morbidly curious, this calculator will tell you.

Note that this does not apply to insurance proceeds or retirement benefits unless the estate is designated as the beneficiary.  Note also that the State only receives assets if there are no relatives under any branch of the family tree.

How Not to Revise a Will – Thomas Kinkade Edition

At the intersection of estate planing, celebrity, and public voyeurism, is theThomas Kinkade estate litigation.  At the time of his death, Mr. Kinkade was separated from his wife for 2 years and had been living with a girl friend for 18 months.  His girl friend has offered 2 barely legible wills which leave her various sums.  The illegibility is allegedly due to his inebriation while writing.  Generally, a handwritten will is valid as is a will made while drunk (see the full article for some of the conditions and exceptions).   This matter will take years to resolve.

What advice can we glean from Mr. Kinkade’s handling (or non-handling) of his affairs:

1.  Once separated from a spouse, change the estate planning documents immediately.

2.  If changing the documents, hire an estate planning attorney rather than DIY.

3.  If eschewing an estate planning attorney in favor of DIY, write the will while sober, not highly inebriated.

Still unresolved is the effect of his death on the value of his art.  I am betting downward.

Planning For Re-Marriage

Back after a slow 4th of July news week.   A checklist of items to address when getting re-married:

1.  Consider a pre-nuptial agreement.
2.  Revise will.
3.  Change beneficiaries on retirement plans and insurance policies.
4.  Take an inventory of assets (could be useful in lieu of a pre-nup).
5.  Consider a pre-nuptial agreement.  Repeated for effect.  The other items will take care of themselves in the context of creating a pre-nuptial agreement.

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.


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.

No Contest Clauses

A quick primer on “no contest” clauses which are permitted in Ohio.  They work best when the beneficiary has something to lose by challenging the will.  Leaving someone the proverbial $1 is ineffective.  It is best to leave $50,000 or so which is the amount that could be spent in defending a lawsuit from a disgruntled heir.

Social Security and Posthumous In Vitro Babies

The Supreme Court unanimously ruled that in vitro babies conceived after the death of the father are not automatically entitled to Social Security Benefits. State law has to permit them to qualify as heirs at law for intestacy purposes. I can only hope that the forthcoming decision on Obamacare will also be unanimous.

Planning for Second Marriages

Couples in a second marriage face issues different than couples in their first marriage.

1.  How to balance the  financial needs of the new spouse with the expectations of children from the first marriage.
2.  When the second spouse is close in age to the children, how to provide for the spouse without making the children wait their entire lives for an inheritance.
3.  Who/what to designate as the beneficiary of retirement assets and insurance policies.

Of course, like many topics on this blog, these issues can be addressed through the use of a trust in an estate plan. A prenuptial agreement is also important when there are children from a prior marriage.

Expecting Couples

Advice for new parents:

1.  Increase life insurance to at least 10x salary, or 15x if affordable.
2.  Prepare a will which designates a guardian for your child.
3.  Consider a trust to avoid child receiving inheritance at 18..
4.  Jay is a good name for boys.

Minimizing Estate Taxes

Simple strategies to minimize estate taxes:

1. Do not procrastinate. It is tough to plan to avoid taxes when you never get to it before death.

2. Transfer large insurance policies to an irrevocable trust so they pass estate tax free to spouse and children.

3. Give assets away during life rather than waiting until death. Due to the difference in the calculation of gift tax and estate tax, paying gift tax is better than the estate tax.

The article mentions 2 more strategies of limited applicability to most people so I will not summarize them in the interest of brevity.

Contact Me

All Posts By Jay Brinker

I am an attorney located in Cincinnati, Ohio who practices in the areas of estate planning, probate, asset protection, and small business advice. I make a difficult and bewildering process as simple as possible. Most importantly, I provide "more for less" for my clients.