Month: June 2010

A Family Mission Statement Can Help Any Family

June 30, 2010 /

This is a guest post from Ron VanSurksum, CFP originally posted on his blog here and reproduced here with his express permission.

A Family Mission Statement Can Help Any Family Manage Assets, Philanthropy and Direction

A family doesn’t need a surname like Vanderbilt to benefit from a family mission statement.  A mission statement is a collaborative document created by one or more generations of family so standards and goals can be set for the handling of all family assets, including businesses and philanthropy in particular.

While mission statements aren’t legal documents – in fact, many are done both in written form and on videotape as a companion to legal wills and directives –  their purpose is to make a record of the family’s values, goals and aspirations and how those sentiments should drive future decisions about family wealth management, business succession plans and charitable pursuits.  Multi-national companies have mission statements. Non-profit corporations have mission statements.  A mission statement for your family, helps identify and clarify specific values and goals, facilitates group decisions, instills confidence and encourages unity.

It should also identify family leadership who will work with other relatives in implementing those goals.

While the end product should produce a document built from discussion, argument and consensus, it’s not so much about the piece of paper as the process. Many families start the process as a way to build consensus about long-term financial, business, estate and philanthropic goals, but the conversation can take twists and turns that don’t directly involve the family money. In this process, a family can identify the strengths, weaknesses and unearthed priorities of all family members and might reveal leadership few had expected.

Trained financial advisors including financial planners, tax experts and estate attorneys, can help explain the process and set an agenda for families to follow in creating the mission statement. While some extended families may elect to bring in a facilitator to guide their process, there are generally four components to a family mission statement – estate issues, philanthropy, business planning and family dynamics in general.

It also helps to start with some questions that can guide the discussion.  Many experts start with questions that first get family members talking about their relationships and how their dynamics work, and then move into business and money matters.

  • What’s most important about our family?
  • What do you think our goals should be?
  • When do you feel most connected to the rest of us?
  • How should we relate to one another?
  • What are our strengths as a family?
  • Where do you think we’ll be as individuals in 5, 10 and 15 years?
  • In order, what are the five things you value most in life?
  • How should we behave toward each other?
  • How should we take care of relatives who are or become sick or disabled?
  • How should we resolve our disputes?
  • How important is the family business to you?
  • What should we be doing differently with our family money as well as our assets inside the business?
  • What professionals or structures should we bring in to help us manage our wealth?
  • What’s the best way for us to be building our wealth?
  • What do you think the role of our family should be in helping the community?
  • What should we be doing individually and as a family with regard to philanthropy?

Structurally, the written mission statement can be whatever you agree it should be – most experts say it should be no more than a paragraph long, but that’s a guideline, not a rule. It is also very important to focus on the positive, meaning what you want to accomplish and achieve as a family, as opposed to want you want to avoid. And it needn’t be set in stone – a family should have a meeting every year or two to revise or approve its mission.  The family mission statement helps a family establish its identity and the variety of voices within, and those voices may be subject to change over time. The family mission statement is a living, breathing document that can evolve over time. In today’s fast paced world, it is easy to get caught up in the here and now, a family mission statement can help you stay true to your family’s values. As a result, families may not feel the pressure to keep up with the Joneses because their mission  statement helps achieve balance. It is also very important to focus on the positive, meaning what we want to accomplish and achieve as a family, as opposed to want we want to avoid.

The right mission statement can help reset goals and diffuse tensions later. It can also be used to moderate discussions that inevitably happen after major changes within the family – death, divorce or happily, an increase in the number of heirs and participants.

As for the age of the participants, it can start in very basic form with younger children and the process can mature as they age. It’s actually a good idea to bring young members into a customized version of the process for youngsters so they can comfortably adjust to working as adults with the older members of the family.

For additional resources on how to create a family mission statement, please consider utilizing any of these websites

http://www.nightingale.com/mission_select.aspx?from=homepage&element=missiontitle

http://www.ehow.com/how_2043790_write-family-mission-statement.html

http://www.franklincovey.com/msb/

June 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Ronald J. VanSurksum, a local member of FPA.

Fond Farewell and Moving the Cheese

June 27, 2010 /

If you follow me on Facebook or Twitter or receive my weekly e-newsletter (opt-in here) you’ve likely noticed that I’ve been hinting at some big changes at the firm.  So what’s the big news?  I have a new Client Services Director!

I have been blessed to have Paula as my Client Service Director since last September.  If you’ve called or email the office you most likely talked with Paula.  She is the kind voice that conveys our unique approach to estate planning (we call it “whole family wealth planning”) and lets each person know they are truly appreciated.  Everyone enjoys talking with her.  How do I know this?  Because that’s what everyone tells me.

So why a new Client Services Director if I have such a great one already?  Paula lives in Kalamazoo and worked “virtually” from her home.  She had an opportunity come up that was better for her family and her own business.  Although I’m sad to see her go, it is the right move to help fulfill her hopes and aspirations.  I wish her the very best and have no doubt she will be incredibly successful.  I am glad that I can call her a friend (and will stay in touch).

And I’m very pleased to welcome our new Client Services Director, Kristi Lallo!  Although I was reticent about the change at the beginning, it turns out my initial “fear” of the change was nothing more than a fear of “having my cheese moved.” Kristi is already becoming an invaluable member of the team.  She brings a wealth of experience, knowledge and customer service excellence.  I’m excited about the firm’s future with her directing Client Services.

If you had the pleasure of working with Paula, please let her know how much she is appreciated.  And please give a call or send an email to give Kristi a warm welcome.  We always enjoy hearing from our clients, friends and business associates!

Why You Should Care About Estate Planning: Professionals

June 13, 2010 /

Moving along in my Intro to Estate Planning series, we will continue to look at why planning is important for  family of different types and at different life stages.  I started by uncovering the many benefits estate planning holds for parents with children under 18.  If you are a parent with children under 18 years old and still have questions, contact me to have your questions answered.

The next group we’ll look at is more of a “type” of family rather than a stage of life: professionals.  My definition of a “professional” is broad, including doctors, lawyers, certified public accountants (CPAs), accountants, bankers, financial advisers, nurses, teachers, middle- to high-level company managers, CEOs, company Presidents, and other similar positions.  I view this group so broadly because they all share similar concerns, at varying degrees.

Some important reasons proper estate planning is critical for professionals (and their families) include:

  • Guardianship remains one of the most important reasons to estate plan if you have children under 18 years old.  Without designating who you want to raise your children in your absence, a court will decide who will care for them. If you haven’t named guardians for your children, you should run, not walk to an attorney specializing in estate planning (and focusing on guardianship decision).  If you have named guardians, you most likely made at least 1 of 6 common mistakes.  Contact me to learn more!
  • Asset Protection. As a professional with a special skill, you face a greater threat of liability.  You have worked hard to accomplish great things and are building a secure financial future for your family.  Don’t leave it exposed to future divorce, lawsuits and creditors.  And this pertains as much to you as it does to your children and grandchildren (and on down the line).  You can pass your financial wealth on to them protected from divorce, lawsuit and creditors as well.
  • Planning for your incapacity to avoid bitter conflict about your finances and your health care. You need to give people you trust the legal authority, guidance and direction on how to handle your finances and your health care.  Enhanced Powers of Attorney, EnhancedPatient Advocate Designations, and Living Trusts are key components to making sure your wishes are recognized and followed.
  • Avoiding probate.  Without a proper plan in place, your hard earned wealth will go through a time consuming and often costly court process. Wouldn’t you rather your family be able to benefit right away and receive more of what you worked so hard to accomplish?
  • Passing on your “whole family wealth,” not just your money.  This includes your values, insights, stories and experiences – who you are and what is important to you.  In my experience this is THE most overlooked part of estate planning.  The professionals I’ve worked with have accomplished a lot and continue to reach new levels of accomplishment.  Yet in most circumstances they have not taken the time to explain their struggles, how they overcame, and what they learned – these are far more important than money to their kids, grandkids, and future generations.

These are just a few of the reasons professionals need an estate plan.  Can you think of more?  Please share your thoughts and experiences.

With my next post in the series, I will look at the “sandwich generation” – people who have concerns about their parents and their children.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  He specializes in “whole family wealth” planning for professionals with minor children, doctors, nurses, lawyers, and the “sandwich generation” (caring for parents and children) – and does so from a Christian perspective.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

Make sure you pass on your “whole family wealth,” not just your money.  This includes your values, insights, stories and experiences – who you are and what is important to you.  In my experience this is THE most overlooked part of estate planning.  It happens to be one of the most fulfilling privileges I have when working with families.

Online Wills and Trusts Company Gets Slapped With Class Action Lawsuit

June 7, 2010 /

Pardon the interruption of our regularly scheduled “introduction to estate planning” programming for this breaking news.  I figured it was bound to happen sooner or later and now we know . . . sooner.  According to this article, Legal Zoom recently became the subject of a class action lawsuit.  The suit accuses Legal Zoom of “unfair and deceptive” business practices.  The suit alleges the deception is in Legal Zoom’s claim that “‘. . . virtually anyone'” can create a valid legal document through the site and that the ‘customized’ documents made by nonlawyers would be reviewed for ‘accuracy and reliability,’ [giving] customers a false sense of security.”  What happened in the specific situation that brought about the lawsuit?  They bought a revocable living trust, a will and a durable power of attorney that later had to be fixed by an attorney.  My colleague Candice Aiston wrote about it here.  And to be fair, you can read Legal Zoom’s response to Candice’s post here.  It’s always best to hear both sides of the story so you can form your own opinion.

I’m not making any comment about the validity of the lawsuit, or lack thereof.  However, if you’ve been reading my posts for any period of time you know that I believe online- and software-based will-making software leaves many people with a false sense of security.  The sad part is that most people don’t find out that the security is false until they die, and then it is too late! Their family is left cleaning up the mess.  Think about a child’s toy.  They come with specific pieces that are designed to fit together a certain way and their are directions telling you how to construct it.  Yet somehow, I still find a way to put it together wrong (causing untold frustration) or never getting it put together at all!  What about you?  Think about how unique each individual is . . . and each family.

An estate plan is not a cookie cutter situation and you should run (not walk) away from anyone (lawyers included) who tell you it is.  Each person, each family, is like a snowflake – unique in who they are and in the legacy they want to create and pass along to their family after they’re gone.  And that is just one of the reasons working with an attorney who specializes in estate planning is key to making sure you pass along your “whole family wealth,” and not just a set of documents that distributes your “stuff.”  Call me if you’re interested in learning more about sharing who you are and what’s important to you – making sure your values, insights, stories and experiences will benefit your family for generations to come.  It’s about far more than money.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  He specializes in the needs of professionals with minor children, doctors, lawyers,  CPAs, and those in the “sandwich generation” (caring for parents and children), and does so from a Christian perspective.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

Why Should I Care About Estate Planning?

June 3, 2010 /

Having figured out what estate planning “is” in my previous post, let’s move on to why estate planning is important.  Because the topic is so broad, I’m going to break it down and address it based on common life stages.  If you are curious how it applies to YOU, contact me and let’s talk about it.

Let’s start by looking at how critically important estate planning is for parents with kids under 18 years old.  It really doesn’t matter if all or some of your children are under 18.  These important issues apply if any of them is under 18:

  • Establish guardianship for your children under 18 – not doing so will leave their care up to a court to decide.  Someone who doesn’t know you and what’s important to you, your family dynamics, and your desires for your children’s future, will be the one making the decision who will raise them.
  • Establish temporary guardianship for your children – not doing so could leave them in the hands of child protective services or temporary/permanent foster care.
  • Make sure you have a comprehensive protection plan for your children so your babysitter, family, friends and guardians/temporary guardians know what to do if something happens to you and have the legal documentation to prove it.  We include instructions for these important people and even include a family emergency ID card for your wallet/purse.
  • Have your estate structured so your kids don’t succumb to “lottery winner syndrome” when they receive all of their inheritance outright at 18 years old.  Think about that for a second.  Let’s take an example: 2 children and an estate valued at $500,000 (and remember life insurance is included in the amount they receive).   Each child will receive whatever amount of their $250,000 share is not used up by the time they are 18.  Can you imagine?  Let’s say that ends up being $100,000.  How would you have handled $100,000 when you were 18?  I know how I would have handled it and it’s not pretty.  I read one study that said over half of outright inheritances are spent within 3 years of receiving them – no matter how much was received.
  • If you are a professional and subject to potential liability, make sure you structure your plan in a way that ensures your assets are there to benefit your kids and not lost to lawsuits, creditors and other liabilities.
  • Make sure you pass on your “whole family wealth,” not just your money.  This includes your values, insights, stories and experiences – who you are and what is important to you.  In my experience this is THE most overlooked part of estate planning.  It happens to be one of the most fulfilling privileges I have when working with families.
  • Have a health care directive (patient advocate designation) in place for yourself and your children to minimize conflict about your medical care.

These are just a few of the reasons families with kids under 18 need an estate plan.  Can you think of more?  Please share your thoughts and experiences.

With my next post in the series, I will look at why planning is vital for “professionals” – and you may be surprised how many families are in that group.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  He specializes in “whole family wealth” planning for professionals with minor children, doctors, nurses, lawyers, and the “sandwich generation” (caring for parents and children) – and does so from a Christian perspective.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses in Grand Rapids, Grandville, Cascade, Forest Hills, Ada, Byron Center, Caledonia, and the surrounding areas.  He specializes in “whole family wealth” planning for professionals with minor children, doctors, nurses, lawyers, and the “sandwich generation” (caring for parents and children) – and does so from a Christian perspective.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.