Tag: grand rapids trusts

The “Story Leading Question” and True Values Planning

August 15, 2010 / Michael

If you haven’t had the opportunity to read the earlier posts in the series on story based planning written by my colleague and mentor, Scott Farnsworth, you can do so here, here and here (sounds funny to have all those here’s!). They give an important backdrop to this post on “story-leading questions.” I have found story leading questions to be one of the most transformative processes I’ve implemented when working with clients. It “opens a door,” as Scott says, to really learning more about who each client is and what’s important to them – true Whole Family Wealth™ Planning.

In “The Power of Story-based Planning, Part 3” I wrote that “the best way to genuinely understand our clients and their values is to ask them thoughtful and insightful story-leading questions in an appropriate setting and then settle back and listen to their answers with all the love and attention and encouragement we can muster. I have learned that who they are and what they deeply value are woven into the stories they tell and can be discovered by a caring advisor.”

So what are story-leading questions? Simply put, they are questions that invite the other person to answer with a narrative. They open the door to a story.

I have found that good story-leading questions exhibit a warm and welcoming interest in the life of another. Good story-leading questions are appropriate to the level of trust and intimacy between those conversing. They don’t put the other person on the spot, nor feel judgmental.

Good story-leading questions also allow the person answering a number of ways to answer the question, rather than leaving them only one possible option.

Story-leading questions are like wizard’s matches: they ignite a warm, crackling exchange of life-experiences and life-lessons. Sometimes, they even kindle bonfires of story sharing. A good story-leading question naturally and comfortably invites the other person to recall and share a little bit of their life with the person posing the question.

Most of us already have a wide array of story-leading questions that we use but most of us are not mindful of them or how powerful they can be, especially when we remember to ask them “in an appropriate setting and then settle back and listen to the answers with all the love and attention and encouragement we can muster,” to quote myself.

Here’s an experiment you can try. When you go home this evening and when the time is right, try out this simple story-leading question with someone you love: “So what was interesting or unusual about your day today?”

Or ask a young parent: “What has your child learned to do lately?”

Or ask a child: “What’s something you’ve discovered lately that makes you happy?”

Or ask an older person: “What’s happening with your grandchildren?”

Or ask a friend: “What’ve you been up to since the last time we talked?”

Then listen, really listen. Show with your countenance and your body language that you deeply want to hear the answer. Don’t rush, don’t compete, don’t minimize or infantilize in any way what they say. Just listen.

I promise if you do, you will discover — or rediscover — magic.

This same approach works in our professional lives. Story-leading questions and attentive, caring listening can transform the planning process.

Our clients safeguard a treasure trove of information about themselves, their lives, their loved ones, and their visions for the future behind a heavy locked door. Opening the door requires two sets of keys. One set is the questions and the other is the listening. Accessing this valuable cache of information can lead to the creation of elegant and appropriate planning for these clients.

Great story-leading questions and attentive, respectful listening are the keys.

Scott Farnsworth, J.D., CFP is an attorney and Certified Planner with more than 30 year in the estate, business, and financial planning fields. He is the CEO of SunBridge, Inc. and the founder of the SunBridge Legacy Network. He is a nationally recognized author and expert on practical, holistic, family-friendly planning. Scott was recently named one of Financial Advisor Magazine’s ‘Innovators of the Year.

Michael Lichterman is an attorney specializing in estate planning and helping families and business owners create a lasting legacy by planning for their Whole Family Wealth™. He focuses on planning for doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned business succession, 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.

Are You Getting REAL Values-Based Planning or an Impostor?

August 11, 2010 / Michael

This is the third in a series of posts on Story Based Planning written by my colleague and mentor, Scott Farnsworth. In this post Scott tackles TRUE values-based planning and what has become a substitute that “poses” as values-based planning . . . questionnaire based planning. Here is what Scott has to say:

In an earlier post I wrote that “values-based planning” is founded on the notion that each client has a personal set of values that should be ascertained early in the planning process and then used to fashion a financial plan or estate plan unique to that client. Most enlightened planners today would concur that financial and estate plans based on client values are far superior to the “one-size-fits-all” cookie-cutter plans that many of us grew up doing.

The question with regard to values-based planning is not whether we should create plans based on client values. The answer to that one is duh-obvious: Yes. The issue is not WHETHER we should do values-based planning, but rather HOW to do it so that it actually works.

In other words, how do we respectfully and accurately ascertain each client’s unique and deeply-held values upon which their planning will be based? What methodology will allow us – and our clients – to look into their hearts, to see there what truly matters, and to then discern how to create a plan with them based on what we have discovered?

Unfortunately, the widely-heralded “values-based planning revolution” has been in my view a case of one step forward, two steps back. This is largely because in nearly every instance what started out to be “values-based planning” quickly morphed into what I call “questionnaire-based planning.” Indeed, with a few notable exceptions, virtually every so-called “values-based” approach is designed to be implemented by means of a cleverly designed, carefully worded questionnaire.

I think that is a tragic turn of events, and here’s why:

A. Questionnaires are blunt instruments that deliver cut-and-dried, categorical answers. As a result, they seduce planners into seeing clients as cut and dried and categorical. But that’s not the way we humans are, especially when we drill down to a values level. We are not pegs to be pushed into differently shaped holes, or colored bobbles to be sorted into different boxes. We are each unique. We are full of nuances, contradictions, uncertainties, and places where the lines are blurred. We don’t fit into four or five neat categories, as most questionnaires require.

Some would argue that being able to offer clients a plan based on which one of several categories they fall into, as determined by their questionnaire responses, is substantially better than the old “one-size-fits-all” method of planning. While it may be an improvement, it is not true values-based planning. Offering clients a choice of cookie cutters is still cookie-cutter planning.

B. Questionnaires have built-in biases, which are based on the assumptions and prejudices of their creators. Regardless of whether these biases are accidental or intentional, a biased questionnaire skews the results away from the client’s true values. When you start with untrue assumptions, you always end up with incorrect conclusions.

I have seen long, beautiful, and well-worded questionnaires that were supposed to assess a client’s values and direct the planner to the type of plan the client needed. Oddly, it seemed that nearly everyone using that questionnaire was steered toward essentially the same plan, one that favored the aims and products promoted by the questionnaire designer. It seems to me that when everyone gets the same answer, maybe the questionnaire is asking the wrong questions.

C. Questionnaires can be “gamed” by clever clients. The process of answering questions in a questionnaire invites clients to consider not just their answers, but the impact of their answers on the planner and the planning process. “Will this answer raise or lower the fee?” “Will this answer make me seem more wealthy or less wealthy?” “Will this answer cast me in a negative light?” “Will I appear miserly, judgmental, prejudiced, immature, or short-sighted if I answer that way?” “Will I be exposing my weaknesses, and will that allow her to take advantage of me in some way?”

Human nature being what it is, the odds are high that clients’ responses will be less than candid and unguarded. Consequently, there is a high probability that questionnaire answers will be scrubbed, distorted, shaded, or flat-out wrong. This makes the results of a questionnaire unreliable as a basis for serious values-based planning.

D. Questionnaires lead to dull, inattentive planners. Questionnaire-based planning doesn’t require planners to listen deeply and attentively to clients, to ask insightful questions, or to employ judgment and wisdom to discern how to weave the client’s life-lessons into the plan. The “correct answers” or the client’s “categories” just “magically” pop out from the responses. Yeah, right.

True values discovery requires careful and attentive listening. Each client and the stories they tell are alive with insight and meaning. They are full of clues and pieces of answers. Real people living real lives are like that. The right answers don’t just pop out; they have to be teased out and then pieced together like a jigsaw puzzle. But when you make a commitment to discover for yourself – and for the client – a clear and complete understanding of what’s really in their heart, their deepest purposes for planning, you discover that the results are unquestionably worth the effort.

E. Questionnaires don’t lead to values-based planning. Questionnaire-based planning is neat, clean, analytical, and easy, but it is incapable of drilling all the way down to the values-bearing strata deep inside the client. No matter how cleverly worded, a questionnaire can never respectfully and accurately ascertain each client’s uniquely personal values. The results are too shallow and mechanical. The intention may be right but the methodology is wrong. Thus, whenever planning becomes questionnaire-based, it ceases to be truly values-based. I call it “faux values-based planning.”

Please understand that I believe there is an appropriate role for questionnaires in the financial planning and estate planning process, which is to help gather data. I have no problem using questionnaires as fact finders. They just don’t work to discover and discern significant client values.

So What?

“So what’s the harm,” you may ask, “in doing questionnaire-based planning? It’s definitely a lot better than the old way we used to do it.”

The most significant harm is that when financial planners and estate planners – even smart, sincere, and well-intentioned planners – think they are doing values-based planning but are only doing faux values-based planning, they stop seeking the real thing. They become enamored with zirconium and fail to find the acres of diamonds just over the next hill. They take the shortcut and never realize they just missed the best part of the journey. As a result, they rob themselves and their clients of the magnificent experience of true values-based planning.

Good is the enemy of great.

The moment earnest planners apply the label “values-based planning” to something that is not and once they start to believe they are doing “values-based planning,” even though it is really only the “faux” variety, they lose the sense of urgency to discover the real thing and are unable to see the need to do more. Once they get locked in, it is nearly impossible to unlock them. As a wise person once said in another context, “the problem is not what they don’t know. It’s what they do know that just ain’t so.”

Values on the cheap vs. paying the price

While questionnaire-based planning may appear neat, clean, analytical, and easy, it is really only values-based planning on the cheap. The real process of values discovery – like virtually every other authentically meaningful human endeavor such as nurturing a fulfilling marriage, raising independent children, growing a beautiful garden, or building a success business – can be disorderly, messy, intuitive, and sometimes challenging. It requires real work. It requires that we pay the price to come to know, really know, our clients. It cannot be achieved with clever techniques.

The Solution

To move into the beautiful new world of true values-based planning, the solution is not to try to come up with a more artful questionnaire. The solution is to recognize that their stories — the oldest and most natural form of human communication – are rich and ripe with the unvarnished truth about our clients’ values. We just need to ask the right questions and then listen, really listen.

I have found that the best way to genuinely understand our clients and their values is to ask them thoughtful and insightful story-leading questions in an appropriate setting and then settle back and listen to their answers with all the love and attention and encouragement we can muster. I have learned that who they are and what they deeply value are woven into the stories they tell and can be discovered by a caring advisor. That is the essence of what I call “Story-based Planning in a Thinking Environment.”

I’m happy to say that I use a questionnaire mostly for fact finding, not for developing a values-based plan. I make it a point in every Peace of Mind Planning Session or Whole Family Wealth™ Planning Session to purposely set the questionnaire aside and spend a significant amount of time listen to my clients’ stories.

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.

Planning For Your Values – Story-Based Planning (Part 2)

August 8, 2010 / Michael

Your values are important to you, otherwise you wouldn’t hold them as values. So why don’t we plan to pass on our values as much as we plan to pass on our retirement account, our cars and other assets we have? It’s a great question and one that is tackled by my colleague and mentor Scott Farnsworth in the second in a series on Story-Based Planning. You can read the first post here. Here is what Scott has to say:

For at least the last decade, the hottest buzzword in the planning professions has been “values-based.” You couldn’t turn around without running into “values-based” selling, financial planning, estate planning, you name it. But what in the world is “values-based planning” anyway?

Looking under the label and behind the question is helpful, I believe. In truth, all planning is based on someone’s values, so the question behind the question is whose values? To acknowledge our professions’ dirty little secret, the truth of the matter is that in the “pre-values-based planning era” nearly all planning was based on the professional’s values or, at best, on the values we assumed the clients held.

If the professional was selling life insurance, lo and behold, one of the key values was “tax-free liquidity at death.” If the professional was selling living trusts, it was generally assumed the clients valued “avoiding probate,” “reducing estate taxes,” and “distributing the assets” in some orderly fashion, usually in a way consistent with the drafter’s trust templates. If the professional was selling investments, every financial plan was based on the premise that the client wanted to pay for his kids’ college and then retire comfortably a few years before he turned 65.

Not surprisingly, every plan a planner created looked strikingly similar to every other plan he created: they were all based on the planner’s values and assumptions, not the client’s.

What the term “values-based planning” was trying to communicate was the notion that each client has a personal set of values that ought to be ascertained early on in the planning process and then used to fashion a financial plan or estate plan that was unique – truly unique – to that client. The real question then became, for those planners actually trying to create plans based on client values, “how do you ascertain the client’s values?” At least now the issue was correctly framed.

This breakthrough led to the advent of what I call “questionnaire-based planning.” Client values, the planning professions assume, can be ascertained through a cleverly designed multi-page questionnaire. But while “questionnaire-based planning” is far better than its predecessors, it still fails in its primary objective: to develop for the planner and the client a clear understanding of what’s in the client’s heart – the client’s deepest purposes for planning. For that you need story-based planning.

In the next installment I’ll outline why “questionnaire-based planning” is merely masquerading as genuine values-based planning. It looks good on the outside, but inside it has no real power to get to the heart of the matter.

To be continued.

Michigan Special Needs Children – Caring Through Planning

August 1, 2010 / Michael

This post is an excerpt from a recent issue of my weekly e-newsletter. I received such a positive response that I thought I would share it with my blog readers as well. If you would like to receive these fun, informative and helpful weekly e-newsletter, click here and put in your information.

Today I want to talk about special children.

Every child is special, in their own unique way. That said, certain children are even more precious–and their needs are great. I’m referring to what many call “special needs children” (though, it’s perhaps better to call them children with special needs–after all, they really are “children” FIRST, and not to be defined first by their “needs”!).

Because this is something which adds certain complications to any family, I thought I’d take a moment this week to address 3 key wealth strategies for families with these beautiful, special children.

Feel free to forward this along to families who come to mind, and let them know that we will certainly assist them with their unique situation.

Let me know what you think!

Here is the standard thinking, in regards to setting up your affairs with children who have special needs:

Families realize that they have to support these children for the rest of their lives. So, they typically write wills and take out significant term life insurance policies. They are careful to name a trust as the beneficiary, because if their child has more than a minimal amount of assets upon reaching age 18, he/she will no longer be eligible for some government benefits.

However, while these families are indeed on the right track, parents with special needs children also should:

1. Set up a second trust. I am a strong supporter of stand-alone special needs trusts. The purpose of this additional trust would be to make sure that the provisions in the parents’ trust don’t disqualify the child from receiving any government benefits that would otherwise be available for his/her care. It’s better to “wall off” what the child receives. The separate trust is also there so that friends and family members can contribute to the child’s care while the family is still alive–without causing the child to lose eligibility for any government benefit programs.

2. Increase savings. These families need a much larger emergency fund than most, and they also need to create a “reserve fund”. They should concentrate on savings–rather than paying off debt–especially if interest rates on loans are low.

3. Plan for three retirements. These families not only have to plan for their retirements, but also for their child’s long-term care. They should maximize their savings and take an aggressive approach with their portfolio to maximize returns over the long run.

While I’m not a financial planner, I thought that these tips were so important that if you find yourself in this situation, you should raise them with your professional adviser.

Warmly (and until next week!),
Mike

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). 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.

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

July 28, 2010 / Michael

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.

Motley Fool Tries to Explain a Trust

July 25, 2010 / Michael

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.”

Michigan Pet Trusts

July 14, 2010 / Michael

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 / Michael

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.

A Family Mission Statement Can Help Any Family

June 30, 2010 / Michael

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.

Online Wills and Trusts Company Gets Slapped With Class Action Lawsuit

June 7, 2010 / Michael

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 / Michael

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.

What Is Estate Planning?

May 31, 2010 / Michael

Based on some recent conversations, it has become clear to me that there is much confusion about estate planning. What is it? What does it mean? Why do it? How to do it? Why work with an attorney? And many more questions I hear on a regular basis. So, I’ll be doing a series of blog posts introducing estate planning and its various components. I don’t know how many posts it will be. I’m pulling many of the topics from my day-to-day conversations, so I’ll keep the series going as long as there are questions. If you have questions, please ask! I’ll make sure to work your questions into this series.

So, the first question – what is estate planning? Wikipedia defines estate planning as “the process of anticipating and arranging for the disposal of an estate.” I believe a much better definition is one I heard from a colleague of mine from Wealth Counsel:

“I want to control my property while I’m alive, take care of me and my loved ones if I become disabled, and give what I have, to whom I want, the way I want, and when I want. Furthermore, if I can, I want to save every last tax dollar, professional fee, and court cost legally possible.”

The one item I always add to that definition is: “to make sure that my children are cared for by who I want, in the way I want.” Of course, this applies only to parents who have minor and/or disabled children.

So here we have the definition, the starting point. Within the definition are many more considerations. To accomplish these goals of estate planning, the following documents are commonly used: wills, trusts, general durable power of attorney, and health care powers of attorney/patient advocate designation. And if you work with a comprehensive Grand Rapids estate planning attorney, there are additional considerations and documents meant to help you pass on your “whole family wealth” – not just what you own, but who you are and what’s important to you! Because if you think about it, the money and the “stuff” will still be around when you pass away, but it is who you are as a person that will be lost – your values, insights, stories and experiences. Check back for the next installment in this series to discover some additional considerations that are vital to having a great estate plan for your family.

Michael Lichterman is a dedicated estate planning attorney 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, nurses, 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.

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