Month: July 2010

“Oh, We Didn’t Use an Attorney…We Bought It Online”

July 28, 2010 /

Because I regular comment about the risks and dangers of online estate planning documents, I’ll keep this post short.  The words above were heard by a banker friend of mine.  The context of the statement is just to good to not write a post about it.

The customers have a very elderly aunt (in her 90s) for whom they have power of attorney.  They brought the document into the bank because aunt needed to them to get into her safe deposit box.  So the banker sends the power of attorney to the bank’s legal department.  The answer back – “no.”  Why?  Because the power of attorney made a very general statement about financial powers and did not include the ability to access a safe deposit box.  The banker’s suggestion to them was to go back to the attorney who drafted it and have it changed.  They’re response was, “oh, we didn’t use an attorney . . . we bought it online.”  So, they had to go get elderly aunt who lives almost an hour away, bring her into the bank on a different day, and have her authorize drilling the safe deposit box (she had lost the keys).  Were they upset?  You bet they were!  But it was of their own doing.

And they were lucky!  How?  Because if aunt hadn’t been competent, they would have had to go to court to get the authorization.

Almost every attorney I know who specializes in estate planning includes a provision in the power of attorney to cover the above example.  Why?  Because it’s what we do.  We deal with it on a daily basis.  Although not having the one provision is not the point, we know that more and more financial institutions are requiring specific authority for different transactions such as accessing a safe deposit box.

Do you have a similar story?  Email me or share it in the comments below.  I always enjoy hearing from my blog readers.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan.  He specializes in Whole Family Wealth™ planning for professionals with minor children, doctors/physicians, 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.

Motley Fool Tries to Explain a Trust

July 25, 2010 /

You know me.  I’m not a fan of folks giving advice in an area about which they’re not qualified.  And as long as people would take it for what it’s worth and seek out the advice of professionals in the area, I’m ok with it.  But many do not.  Many folks hear or read advice from a big name (e.g., Dave Ramsey) and take it as the best advice to follow, rather than just the opinion of someone who is not a professional in the area.

So, what does that have to do with the Motley Fool?  It is exactly what they did in their “Ask the Fool” section in the Sunday, July 25, 2010 business section of the Grand Rapids Press.  First, I want to say that I’m a big fan of the Motley Fool for financial advice.  Much like I’m a fan of Dave Ramsey’s advice for getting out of debt.  However, when they decide to go “off the farm” and delve into an area that is not their expertise, my enthusiasm for their advice quickly wanes.

The question asked in the “Ask the Fool” section was: What’s a trust?  Brevity of the response aside, it mis-stated part of the concept and gave some advice that is far short of ideal.  They stated that a trust is a legal tool whereby someone gives control of property to a person or an institution.  Ok, close enough in my book.  I would say it is a contract/agreement between the creator of the trust and the trustee agreeing that the trustee will hold title/ownership of the assets for the benefit of the beneficiary(ies).  Then they go on to say that the beneficiary owns the property but the trustee controls it.  I beg to differ.  Who the “owner” is depends on the terms of the trust.  Maybe the beneficiaries are the owner, maybe not.  Yet they just make the blanket statement and leave it at that.

Some will say, “Mike, you’re really splitting hairs here.”  Maybe I am, maybe I’m not.  So surely they must have advised the person asking the question to talk to an estate planning attorney, right?  Nope!  Their response was to “learn more from a financial adviser!”  Yep, that’s right.  A financial adviser.  I guess that shouldn’t be a surprise since Motley Fool is known for giving sound financial advice.  Yet here they are (incorrectly) answering a question about a “legal tool” (their words) and then directing folks to a financial adviser rather than an estate planning attorney.  Would they suggest a reader talk to an estate planning attorney about the best long-term investment to get the reader to retirement?  Of course not!

So there you have it.  Again, a well respected person/group highly qualified in one area can’t help but give advice on a topic about which they are not professionals.  And then they direct readers to someone who, although qualified in the financial arena, is also not qualified to give proper advice.

What do you think?  Am I blowing these issues out of proportion?  Should these individuals and institutions be held accountable for the “off the farm” advice they give and the way it could harm the legacy of families?  I would love to hear your thoughts . . . even if it is to tell me I’m “off the farm.”

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan.  He specializes in Whole Family Wealth™ planning for professionals with minor children, doctors/physicians, 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.

Legacy Planning for Your Whole Family Wealth™

July 22, 2010 /

When meeting people for the first time, I’m regularly asked “what do you do?”  I help families create a lasting legacy through Whole Family Wealth™ Planning.  Of course that prompts the question, “what is Whole Family Wealth™?”  I thought I would share the answer here so everyone can benefit.

Whole Family Wealth™ is about planning to pass on more than just what you have – it’s about who you are and what is important to you.  Your values, insights, stories and experiences.  Because it is those values, insights, stories and experiences that are going to matter most to your children/grandchildren when you are no longer around.

For instance, the Allianz American Legacies Study found that non-financial items that parents leave behind, like ethics, morals, faith and religion, are ten times more important to people than the financial aspects of inheritance.  And that makes sense.  If you think about it, by having your values, insights, stories and experiences shared with them, your family will be able to build their own financial wealth.  Sadly, it doesn’t work in reverse.  Once you are gone, so are any values, insights, stories and experiences you haven’t passed on.  Experience has shown me that even though we think we do a great job of sharing those “intangible assets,” in fact we have so much more that we could have shared that would have added a lot to the Whole Family Wealth™ of our loved ones.

So, how do we plan for your Whole Family Wealth™?  We do several things:

  • First, we take a significant amount of time to really learn about who you are as a person – your goals, wishes, hopes, and dreams for yourself and for your loved ones.  We want to know who you are as a person and what is important to you.  One of our clients commented that “Mike was very easy to talk to and I was able to convey my thoughts and feeling about my plan.  He listened to me very patiently and gave me his full attention.”
  • Second, we work with you to determine how we can use planning as a way to pass on these goals, wishes, hopes and dreams.  The idea being that your plan is uniquely representative of who you are and what is important to you.
  • Third, we include ongoing reviews of your planning at least every 3 years in all of our planning levels to make sure your plan is still in line with your legacy goals.
  • Fourth, we include a Priceless Conversation in all our planning levels.  This is a conversation we have with you on various subjects that enables you to share your legacy from your heart, not your head.  We record the conversation to a CD which is then placed in a presentation box with a summary of the conversation and the questions – this becomes the first part of your “legacy library.” There are numerous topics about which we can have a Priceless Conversation.
  • Finally, we are constantly seeking out new ways to help you convey more of your Whole Family Wealth™ based on our own efforts and your feedback

Have questions?  Curious to know more?  Wonder how your specific family situation can benefit from Whole Family Wealth™ Planning?  Give us a call or send us an email.  And if you reference this blog post your Peace of Mind Planning Session will be FREE ($750 value).

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan.  He specializes in Whole Family Wealth™ planning for professionals with minor children, doctors/physicians, 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.

Asset Protection Planning for Physicians

July 18, 2010 /

Growing up with a mom who has worked in the medical field for over 35 years, I know of the sacrifice and struggle that Michigan physicians face on a constant basis.  They are constantly targets of malpractice lawsuits as well as other legal actions such as employee lawsuits for sexual harassment, unfair termination and discrimination; and business and practice-related litigation.  And it seems that Physicians are targeted for every ill-conceived investment idea.  Yet they sacrifice their time and expertise to help care for others.  It is truly a noble profession.

Do they deserve to be in these cross hairs?  I sure don’t think so.  That’s why I’ve been working on better serving physicians and their families.  Contrary to what many believe, asset protection planning is not all about offshore trusts and Swiss bank accounts.  It is about adopting advanced planning strategies that legally place assets beyond the reach of creditors, discouraging lawsuits by lowering a physician’s financial profile so that they become a far less attractive target, and enhancing leverage in negotiations if a lawsuit is filed.

Know that although asset protection planning is confidential, it is NOT based on secrecy or fraudulent transfers, does NOT involved hiding assets and is NOT a tax dodge.  Professional and personal convictions don’t allow such unethical (and potentially illegal) methods.

It is important for Michigan physicians to work with an estate planning attorney who is both well versed in these advanced planning strategies AND can understand the threats Michigan Physicians face and the constantly changing environment in which they work.  Are you a Phyisican or do you know a Physician?  Please share your thoughts.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan.  He specializes in Whole Family Wealth™ planning for professionals with minor children, doctors/physicians, 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.

Michigan Pet Trusts

July 14, 2010 /

For many of us our pets are truly members of our family.  Whether a “traditional” pet like a dog, a cat or a horse, or a “nontraditional” pet like a snake, duck or llama, we care for them much like we do our human family.  And many of us are concerned what would happen to our pets if something happened to us (death or incapacity).  Would someone care for them or would they end up in a shelter?  Who would care for them?  How would they care for them?  And would they treat them the same way we did?

Well, guess what?  You CAN plan for your pet’s care if something happens to you and the way to do it is through your estate plan.  Michigan is one of the growing number of states that recognizes the care we have for our pets and provides a way for you to plan for their care if you aren’t able to care for them yourself due to incapacity or death.

You can plan for your pet’s care by setting up a Pet Trust with Lichterman Law.  Although unique to each family and pet, there are a few general requirements for Pet Trusts:

  • It must be for a domestic or pet animal
  • A Pet Trust terminates when no living animal is covered by the Pet Trust
  • None of the Pet Trust’s principal and income can be used for anything other than for the benefit of the covered animal(s), unless otherwise stated in the Pet Trust

We can create a plan that ensures your pet is cared for how you want and by who you want.  Why wouldn’t you set up a Pet Trust so all your family members are cared for?

Contact us if your pet is a member of your family and you want to make sure they are cared for properly if something happens to you.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan.  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.

Why Estate Planning Is Especially Important for Women

July 11, 2010 /

I love perfect timing!  I read through a recent blog post by Danielle G. Van Ess, a colleague of mine and fellow Wealth Counsel member, that fit right in with my ongoing blog series introducing estate planning.  I started the series by looking at how critically important estate planning is for various family types and situations such as parents with minor children and professionals.

Well, Ms. Van Ess recently wrote a blog post on how vital estate planning is for women (read it here) based on a Forbes.com article.  I strongly encourage you to read her post and the Forbes article – the information is too vital to pass up.  Although Massachusetts and Michigan laws may differ, many of the concepts mentioned in the articles are the same.

I won’t rehash the post or article here, however I do have a couple of thoughts to share:

  • The importance of adequate life insurance on BOTH parents cannot be overstated.  The vast majority of families  I meet with are under insured by any measure.  And I typically find that mom is more likely than dad to be under insured.  Ms. Van Ess points out the importance of life insurance for stay at home moms.  Just think dad – if something happens to mom, you are doing to have to stay home with the kids, hire in-home help or pay for daycare.  How would that financial change affect YOUR family?  Talk to your life insurance agent or financial adviser to make sure you are adequately insured.  If you would like suggestions on who to contact, just let me know.
  • Don’t underestimate your importance in putting a plan in place for your family.  I can count on one hand the number of times we’re contacted about estate planning by dad.  It is almost always mom.  You play a vital role as the key decision maker for planning.  Make sure the decision of how you plan and who you work with is the best for your family.

Do you have stories to share about the importance of the estate planning for you and your family?  For your mom, sister, aunt or friend?  Please share.  I always enjoy hearing about others’ experiences.

Michael Lichterman is an attorney specializing in estate planning and helping provide peace of mind to families and businesses throughout Grand Rapids and West Michigan.  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.

Parents Waiving Liability For Their Child: Is YOUR Business Protected?

July 7, 2010 /

Are you a business owners that provides or manages some form of activity to minor children?  If so, do you typically have the parents sign a pre-injury liability waiver?  Guess what?  The Michigan Supreme Court recently reaffirmed that a parental pre-injury liability waiver is unenforceable under Michigan law.  Why?  Because a parent lacks authority, absent special circumstances, to bind his or her child by contract.  Only time will tell what impact this has on the provision of recreational and sporting activities for kids and how much litigation crops up because of it.

If you’re interested in reading the actual court opinion, you can read it here.

What do you think?  Is the law in Michigan right?  If not, should the court have come to a different decision?  How should we strike a balance between a business’ ability to “contract away” liability and the protection of young children no matter what the circumstances?

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 doctors, nurses, lawyers, other professionals with minor children, 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.

National Article on the Dangers of DIY Estate Planning

July 5, 2010 /

I recently read this article from U.S. News & World Report on the Dangers of DIY Estate Planning.  I think the article is well written and does a good job of representing both approaches – DIY or work with a lawyer.  I, of course, believe the better option is to work with a lawyer.  And specifically with one who focuses on estate planning.  There are many nuances and, like the article says, each individual and family is unique – think of them each as snowflakes . . . none are the same.

I have consistently recommended against DIY estate planning solutions except under a few, specific circumstances.  My reason for sharing the article is to give you an unbiased opinion on the topic from someone other than me.  I encourage you to read it.  The are only a couple of items I think need clarification:

  • I think the following statement is misleading: “all the legal assistance money can buy didn’t help Michael Jackson get his affairs in order before his unexpected death.”  If you’ve read about his estate and the effort (or lack thereof) that was put into it, you quickly realize that, although he could afford “all the legal assistance money can buy,” he did not use it.  He had a surprisingly small amount of estate planning, especially given the size of his estate.
  • Even Legal Zoom acknowledges (via their own study) that only 25%-35% of parents have named guardians for their children and yet they treat it like any other estate planning decision.  This is by far THE most important estate planning decision for parents with minor children and it deserves proper counseling (yes, attorney and counselor at law is my title) to help them reach the decision on who should care for their children if something happens to them.  The decision is too important to leave it undecided or poorly executed.
  • It CAN be worse than doing nothing.  I know of one case where a parent inadvertently disinherited their child – ouch!

So, what do you think of the article?  What are your thoughts on DIY estate planning versus working with a lawyer?  What is it that you don’t like about working with a lawyer?  Please share.  I am constantly looking to improve how I and other estate planners can better serve families.

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 doctors, nurses, lawyers, other professionals with minor children, 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.