Monthly Archives: August 2015

Incongruities

Pencil

Yesterday morning, as I was getting dressed and thinking about my slate of meetings for the day, I decided to put a pencil in my pocket along with a pen. Normally, I wouldn’t devote any thought to this action, but as I picked up the very beautiful Parker Duofold I inherited from my father, I paused, and reflected on the significance of it.

My father was a science teacher by trade, and you might think that being a teacher, he wouldn’t have any ambivalence towards the humble pencil, which allows the holder to convey thoughts to paper, and to refine those thoughts through judicious use of the eraser. However, even my earliest memories of him helping me with my homework contain various echos of him complaining about my use of a pencil. When I grew older, I think when I was in junior high school, I asked him why he didn’t like using pencils. His response was typical for my father, who was a man of few words:

“Because the very act of using a pencil implies that you will make a mistake.”

Even then, I appreciated the brevity and confidence embodied in that simple sentence, but I didn’t share the sentiment. I could say that it was my own contrary nature, which is a trait which I can directly attribute to both him, and the paternal line of my family, and while it would be partially true, the more honest answer was that I reserved brash confidence for the things I was absolutely sure of, and my experience in school was that I still made mistakes.

As I grew older, and my education progressed, my confidence and skill both appreciated, but I never lost my affinity for the humble pencil. I used them for tests. I used them in drafting class. I used them in band. I used them when I wrote papers. And I used the eraser, right alongside, even if I used it less frequently as time wore on, without giving a serious thought as to why I did so. It wasn’t ever in the forefront of my mind until one of my first classes in law school when a professor made it clear to me why I still used a pencil, even as I rapidly and efficiently scrawled lecture notes in ink in pages of the notebook before me. He waited until everyone was seated and quiet, and like a performer, realizing he had the complete attention of his audience, he reached into his pocket, and pulled out a yellow No. 2 pencil, and held it above his head so that everyone could see it clearly. Without stopping to clear his throat, he announced to the quiet lecture hall “As attorneys, we think with these.”

To be completely candid, I couldn’t tell you what he said after that, because I was still absorbing his statement, and considering its implication. Suddenly, it became clear to me. I didn’t use pencils because I expected to make mistakes; I used pencils because any initial thoughts committed to paper can always be refined and improved upon.

And this, more than anything else, is why I still use pencils.  Even now, when surrounded by the ubiquity of desktop computers, laptops, tablets, and smart phones, I often use pencils to make initial thoughts better.  Pixels are nice, and the delete and backspace buttons work as well as any eraser, without need for replacement, or pesky soiled shavings, but they don’t have the same sense of timelessness, or feeling of gravitas that handwritten words, pressed into paper, seem to carry.  A pencil is portable.  It never needs to be plugged in.  A virus can’t wipe out what you’ve written with a pencil.  Malware cannot hold its work product hostage.  I can use a pencil anywhere.  I refine phrases and words, and increase clarity. I can use a pencil to distill ideas their bare essence. And I relish the promise and potential of a blank notepad and a pencil, as the anticipation of what might flow out of my mind and on to that paper builds slowly in my stomach and the small of my back.

I reflected on this journey of realization, as I regarded the beautiful mechanical pencil in my fingers, and then the question occurred to me: How is it that a man who rejected the implication implicit in the use of a pencil came to own such an ornate one?

I pondered it for a few moments, as my eyes drank in the sheen of the mother-of-pearl body, and the shine of the brass cap, which is engraved with his initials, KLW. And then it occurred to me. The eraser was under the cap, which is not at all easy to remove. It isn’t a writing utensil that you would use if you anticipated making mistakes.

Well played, Dad. Well played.

Advertisements

Leave a comment

Filed under Uncategorized

The Three Biggest Obstacles To Completing An Estate Plan

Although everyone should have an estate plan, I am constantly amazed at how many people procrastinate about following through with this key responsibility.  When I was new to the practice of law, it was much easier for me to look at the planning that many people fail to do, and dismiss it as irresponsibility and selfishness, but nearly a decade and a half of practicing law has softened my perspective, and I have an empathy for people who haven’t yet executed documents that will make life easier for those they leave behind when they pass away.  This is due in large part to some of the things I have had clients tell me when they have come in to start the process.  There are many different reasons why estate planning is not a high priority for a lot of people, but they generally fall into one of three categories:  The fear of confronting one’s own mortality, fear about the cost, and struggles with family conflicts and/or a desire to be “fair” with all of the children.

The Fear of Confronting One’s Own Mortality

After witnessing how this obstacle affects people, I am convinced that for many of them, it is an unconscious and reflexive reaction.  The last thing that most twenty- or thirty-somethings want to think about is the idea that they could be dead tomorrow.  This may be because of busy lives, with jobs, and kids, and obligations, and hobbies.  It might be because they are still young, and healthy, or believe themselves to be healthy, and for many people, that patina of the invincibility of youth might not lose its luster until middle-age, and its aches and pains that don’t go away, or the sudden loss of former classmates and peers injecting the inevitability of death into the forefront of their thinking.  After talking with several long-time life insurance salespeople I know, I tend to believe that there is something to this perspective.

When middle-age comes, some react by retreating farther from the idea of estate planning, and always seem to find reasons to procrastinate and not make decisions, sometimes to the consternation of their spouse, who may have a newfound desire to address these issues, if only to find a measure of peace in knowing that there is a plan, and with it, the comfort of knowing that they will not be at the mercy of statutory schemes which might not reflect the promises and expectations underlying their relationship.

Others surrender to the knowledge that life always ends, and that sometimes, it is sudden, and unexpected.  I have observed that these people are often motivated a maturity and a deep enough love for their families to want to make that time as easy as possible, and perhaps also to leave a legacy for the future.

Fear About The Cost

As a now middle-aged person with two kids of my own, I understand the reluctance to agree to have an attorney sit down and prepare a set of documents at a cost of hundreds of dollars an hour with apparently no cap the eventual cost.  One of the wonderful contradictions about estate planning is that while every time I draft someone’s documents, those documents are unique, because they are tailored to their situation and their desired outcome.  But. in most cases, I also know exactly how much it should cost, because the means of getting there is often substantially similar to others I have drafted.  Still, it doesn’t really matter how you explain this to a client, because they understand that they might have the one set of documents that takes longer, and if you quoted a range, their memory will always gravitate toward the low end.  Recently, after years of consideration, I made the decision to offer flat fee estate planning documents for “simple” estates…a circumstance that I discuss thoroughly with clients after reviewing their particulars, because sometimes they believe their estates to be “simple”, when they really aren’t.  The fact is, after considering it, the fee structure works out to what the client probably could have expected to pay for me to prepare the documents on an hourly basis, but I also understand how the certainty of knowing exactly what they are going to pay can be a selling point.  Every now and then, I will get someone who believes that the cost for preparing “simple” or modest estate plans is still too much.  This is an objection that I understand, and it is why I often try to put it in perspective.  I recently had a brake job done on my car.  It was something that needed to be done, and I did it because it had a tangible benefit not only for myself, but for my wife and children.  Getting your estate planning done is something that you would do for the same reasons, and the cost was actually pretty close to being the same.

For people who have more complex estates, the costs will be greater, and flat fees aren’t necessarily an option.  But there is usually more at stake, and not planning accordingly can mean paying taxes that might have otherwise been avoided (and the need to sell assets in order to pay those taxes), and an end result that wasn’t what anyone wanted, along with the insult of greater than average probate costs incurred in the injury of that conclusion.  In these situations, I generally find that the clients understand that the cost is a legitimate expense of getting their affairs managed properly.

Struggles With Family Conflicts and/or A Desire To Be “Fair” With All of the Children

This is the obstacle that I have the most empathy for, probably because I have children of my own, and until I did, I couldn’t really understand the old saying “You love all your children equally, but you love each one of them differently.”  I have spent countless hours with parents who struggle with sussing out how to be fair with each child, while being keenly aware of the strengths and weaknesses of each.  This is a dilemma made more difficult for parents who own businesses, because often, there may be one of more of the children who have no interest in the business, but that is where the bulk of the wealth of the family is centered, and one or more of the children have an active interest and role in the day-to-day operations of the business.  These are situations which require the attorney to present several options to the parents, and to help the evaluate each one before deciding on one.

Sometimes, I see parents struggling with how a child is living their life.  It might be an issue with the child being a spendthrift.  It might be that the parents deeply disapprove of the child’s spouse.  It might be a history of conflict with the child, that may or may not include some violent episodes.  It might be alcoholism or drug use.  It might be the child’s sexual orientation.  Any one of these can cause a great deal of anguish for parents who are struggling to finalize estate plans.  I’ve heard the pain in a parent’s voice when they describe the reason why they are struggling with trying to treat a child equally with the rest of their children.  Sometimes, I can help them feel a little better about that burden, by offering an option whereby a more responsible sibling can be made trustee of the spendthrift’s share, or through the creation of a testamentary trust which will keep the addicted child from receiving a lump sum which will be lost in a binge which may also take their child’s life.  I have shared the agony of parents who have disinherited children because of conflicts or irreconcilable differences, which the parties have been unable or unwilling to resolve.  And I have come to understand that even for the ones who don’t appear to have struggled at all with such a decision carry the weight of that decision as a private wound.

One of the many lessons I have learned in years of practice is that everyone should have an estate plan, not only to deal with their own death, but to make sure that someone they trust has the ability to make medical and financial decisions on their behalf if they become temporarily or permanently disabled.  The nature of any of the contingencies that a decent estate plan would address are usually the kind for which people can find reasons to procrastinate, but if deciding for yourself isn’t reason enough to take care of this important task, providing the peace of mind of an actual plan for your loved ones should be.

Leave a comment

Filed under Empathy, It Ain't Perry Mason, Pieces of the puzzle, Planning, Trusts, Wills

Will or Trust? A Decision, Not Dilemma.

When I am doing estate planning for clients, often my biggest obstacle is someone I’ve never met.  That person is “My Buddy…”

I’ve discussed this person with attorneys who practice in other areas of law, and surprisingly enough, “My Buddy…” has often contributed free advice to their clients as well.  And as with my clients, the advice given to their clients by “My Buddy…” is usually worth every penny.

That said, I don’t worry about it too much.  Sometimes it means having to take a few extra minutes to explain things, and maybe draw some diagrams outlining various options and outcomes, but I know that I’m lucky in this respect.  “My Buddy…” better hope that some of the family law attorneys I know never catch up to him, because his advice has made their jobs exponentially more difficult, especially since in the context of divorce cases, clients frequently put a lot more weight on the advice and counsel of “My Buddy…”  than they do on that provided by their own attorney.  In the context of estate planning, “My Buddy…” often has often told my clients that they need to have a trust, so they can “avoid probate”.  I don’t encounter this as much as I used to, but occasionally, I still take an appointment with someone swayed by “My Buddy…” and his bar stool lawyering, or worse yet, someone who was taken in by the smooth sales pitch of a “trust mill” in the 90’s, and has a nice looking binder full of tabs, separating various documents, which often fail to accomplish what the owner believes they were told they would when they hired a fly-by-night outfit to prepare a cookie-cutter set of documents, dress them up in a nice package, and then do zero follow-up, ensuring that an expensive package prepared to “avoid probate” ends up…going through probate.

Because of “My Buddy…” (or trust mills), I frequently meet with people who announce early on in the appointment that they need to have a trust, so they can avoid probate.  When this occurs, I usually put my pen down, look them in the eye, and ask them why that is.  Sometimes, they explain that they need to avoid probate because it is a horrible and time-consuming process.  Sometimes, they can’t tell me why, but they are certain that this is true.  And sometimes, they believe that it will result in a tax savings when they pass away.  Depending on the client’s response to the first question, my reply is some variation of the following:

I’m not sure what state you may have lived in prior to Washington, but here, probate is not a big deal.  The process is fairly streamlined, and if the heirs all get along, don’t burn the estate down fighting over it, and there aren’t any oddball assets creating valuation issues, or other items that are out of the ordinary, the estate can be wrapped up in 6 or 7 months, and it really can be done fairly inexpensively (at which point I quote a price range that is much less than the tale of lamentation relayed to them by “My Buddy…”. Probate also has certain statutory mechanisms that can allow you to legally cut off certain claims against the estate after a set period of time which are not available with trusts.

As for tax savings, if your estate is large enough to meet the state or federal estate tax thresholds, there may be some ways to achieve tax savings without bothering to prepare a full-fledged trust agreement, and going through all the effort necessary to complete transfers to the resulting trust so it accomplishes the goal of avoiding probate.

At this point, I ask them a series of questions to determine if there is a good reason, or a need for a trust agreement, rather than a Will.  If they own real estate outside the state of Washington, then they should consider a trust agreement, most likely a revocable living trust, to own that real property, in order to  avoid the need to go through probate in the state were the real estate is located, as well as in Washington.  If their estates are large enough to meet the state and or federal estate tax thresholds, then a trust agreement may be appropriate, although they may be able to achieve tax savings with a trust will.  If they have heirs who have disabilities and who receive state or federal assistance, then we may discuss a special needs trust or a supplemental needs trust in order to avoid disqualifying that heir for further assistance with an outright inheritance.  If they own a business, or several businesses, then there may be reasons to consider a trust agreement, especially if not all the intended heirs are interested in owning or running the business. And if they are just very private people, and they do not want the descent and distribution of their estate to be part of the public record (even through much of the financial data is no longer submitted into the court record), then a trust agreement of some type might be the best option for them.

That said, much of the value of working with an attorney to do your estate planning instead of relying on the dubious advice of “My Buddy…”, or worse yet, a form service like Legal Zoom, is that a good attorney should ask a lot of questions, so he or she can be certain of preparing the right documents in the correct manner to accomplish your intended goals, AND the attorney should then be following up, so that assets are properly transferred.  This helps to prevent a surviving spouse or heirs from facing the added burden of learning that documents were not correctly prepared, and they have to take actions they never intended.  And if your estate is complicated, or has a tax problem, a good attorney will also work with your accountant or CPA to make sure that the course of action you choose makes sense financially, and if it doesn’t, you are made aware so you can make an informed decision.  Working with an attorney on estate planning may end up costing a little bit more than just buying some forms, or drafting your own with the assistance of “My Buddy…”, but the peace of mind is worth every extra cent paid.

Leave a comment

Filed under "My Buddy...", Planning, Probates and Estates, Trusts, Wills