Tag Archives: The Practice

The Bad News Is…

One of the things that law school didn’t really prepare me for was the clients who you can’t help.

When I first started practicing law, I was eager to help clients and potential clients, and there was one who stands out in my memory as the first one I couldn’t help.  He had cosigned on a car for a relative, who had defaulted, and he came to see me, because the bank had come calling on him.  I saw nothing in the documents or the circumstance he described that would permit me to be of any meaningful assistance, but I was slightly worried that he might try to hurt me after I told him that I couldn’t help him.

He was very deliberate as he pushed back from the table, and left the room, never saying a word, and his jaw set like a rock.  After my initial relief at not having to dodge a punch or three wore off, I recall thinking “Well, that’s one person whom I’ll never see again.”

But I was wrong.

Before I moved on from that firm, the man came back to see me two more times.  The next time I met with him, he had a contract he wanted me to review before he would decide whether or not to sign it.  I was delighted that he consulted with me first.  I read through the document, noted a few points that I though he should be aware of, which prompted him to tell me that he was going to think about it before deciding to sign or not.  After wrapping up my notes, I looked up and said “Can I ask you something?”

He smiled and said “Let me guess.  You want to know why I came back.”

I nodded my head and said “Yes.  I could tell you were pretty upset when you left last time.”

He laughed and said “You’re not wrong, but I will tell you that I wasn’t upset with YOU.  In fact, I liked the way that you didn’t sugar coat it, even though you didn’t like telling me that there was nothing you could do.  You were honest with me, you didn’t waste my time, and you told me what I did wrong without making me feel stupid.  I knew I had found someone I could trust, and that makes you worth the money you charge.”

I saw him one more time, when I wrote a Will and powers of attorney for him.  Again, he expressed his thanks for the straightforward advice, and the no-nonsense approach.  I still think of him often, because I still encounter people whom I can’t help.  I won’t say that it’s easier telling clients this now than it was then, but I find that by trying to be respectful of their time, and by trying to not make them feel stupid because they made a mistake, I give them something of value, even if it was only allowing them to leave with the dignity they had when they walked in to my office.  Not everyone reacts well to such news, but I have managed to keep a few of them as clients because I approached their problems in this manner, which turns a negative into a much larger positive.

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Filed under Contracts and Agreements, Empathy, Logic Isn't Always The Life Of The Law, Pieces of the puzzle, Planning, The Practice, Wills

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.

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

Initiative 594’s Inheritance Trap

I-594 isn’t just a compounding of previous violations of the Second Amendment, it is also fraught with traps for the unwary, including one for those who inherit pistols. The language in question is as follows: (4) This section does not apply to: (g) A person who (i) acquired a firearm other than a pistol by the operation of law upon the death of the former owner of the firearm of (ii) acquired a pistol by operation by operation of law upon the death of the former owner of the pistol within the preceding sixty-day period, the person must either have lawfully transferred the pistol or must have contacted the department of licensing to notify the department that he or she has possession of the pistol and intends to retain possession of the pistol in compliance with all federal and state laws. This means that as part of the probate process, the Personal Representative/Administrator of the estate and the attorney need to determine as soon as possible if the deceased owned pistols.  If no one checks, and the designee or heir takes possession without following these steps, then they have broken the law…even if it is the spouse of the deceased.  What can make an error a travesty is that the transfer or notification to the Department of Licensing must take place for every pistol that is acquired, meaning that if someone inherits more than one pistol, and doesn’t follow these steps, they may now be convicted of a misdemeanor for the first pistol, and a felony for each subsequent one. As a practical matter, if you are actually planning ahead, and you want to leave your pistols to someone, you should probably discuss this requirement with the intended recipient, and put language in your Will requiring your Personal Representative to make sure that these steps are followed, and to name a backup recipient if your first choice cannot pass a background check, or has had their concealed weapons permit revoked.

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Filed under Pieces of the puzzle, Planning, Probates and Estates, The Practice

Successor Liability…The Hazard Many Never See Coming

I was at an event recently where another attendee found out that I am a business attorney, and he asked me what I thought was the number one thing that people who try to buy a business without hiring an attorney should worry about.

I had to consider it for a moment, because I didn’t think the Inquisitor would be amused by my saying “Everything.”  After mentally flipping through the various traps and pitfalls, I finally said “Successor Liability”.  The Inquisitor’s face wrinkled up, and he said “What’s that?”

I told him “The short answer is that Successor Liability is when you think that you’re just buying a business, and then you discover that you’ve also bought your predecessor’s obligations and debts.”  Apparently that answer wasn’t sexy enough, because he soon found an excuse to drift to the other side of the room.  My feelings weren’t hurt, but I found his reaction to be illustrative of the way many people enter into the purchase of someone else’s business: sometimes the biggest problems receive the least attention.

Sometimes,  I encounter someone who thinks that they have found a clever way around a potential problem, such as when someone decides that rather than purchasing the seller’s business entity, they will instead just purchase the assets, because “then the debts of the business are still the Seller’s problem.”  Sometimes, this will end well for the buyer, which may be purely coincidental, because these Buyers rarely check to see if the business has any sort of tax liens, tax warrants filed against the business (and consequently the assets) in the local Superior Court, or if there are any UCC filings that apply to the assets they want to purchase.  But invariably, the situation that creates the most heartburn is when a Purchaser is unaware of unpaid taxes owed by the Seller, and the Purchaser learns about it for the first time when the taxing authorities inform them of the lien against the property, or inform them of a pending Sheriff’s sale.  When this happens, things are frequently already at the point where an attorney can’t stop what is going to happen, leaving the Purchaser to have to resort to the courts to try to get a remedy that may not come until years later, when the process is complete, and they have had to spend thousands of dollars to get a judgment that they may or may not be able to collect on.

Buying a business is supposed to be a time of anticipation and optimism.  Risks that you never even anticipated can wreck those emotions, and make an occasion that you make have worked years for into a curse that will take you on a journey through the court system that will take years, and thousands, or hundreds of thousands of dollars before you are through.  This will make the cost of a consultation with a knowledgeable attorney to help you with the purchase seem miniscule by comparison…or as a client of mine has stated on more than one occasion, “It’s just cheap insurance.”

 

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Filed under Business Law, Contracts and Agreements, Pieces of the puzzle, The Practice

Always Learning…

I was helping out on the grounds at church this morning, and my pastor and I got talking about the things that school doesn’t teach you about either of our professions.  And I told him that one of the things about doing estate and probate work is that I bring clients face to face with their own mortality.  But the lesson they didn’t teach in law school is that they also bring me face-to-face with mine.

You expect that you will deal with people dying in this line of work, but nothing prepares you for how you feel about it when you actually liked them, or came to consider them as friends.  Or how you’ll feel when you watch their kids squabble over what was left behind, and end up squandering the estate left to them with love, and the hopes that it would be a blessing, rather than a curse.  It isn’t much of a legacy, and there have been times when I have been glad that some of these clients and friends didn’t live to see what knuckleheads their children turned out to be.

It isn’t always doom and gloom.  I’ve seen some remarkable acts of kindness and reconciliation, some recognized as such, and some not so much, but it helps me to maintain the perspective that some people can’t help it.  And in some cases, Mom and Dad knew, and planned accordingly.

Being an attorney, you get used to keeping people’s secrets, and when it comes to family, some of them are doozies.  But when you see the effect of some of these secrets up close, you realize that they aren’t really secrets at all, but just the individual manifestations of problems that some people want to pretend society doesn’t have, or that society is capable of “fixing” by itself, with yet another law, or regulation, as if addressing the behavior is the same thing as addressing the cause of the behavior.   But then, if law school taught these things, maybe our professional role would be much more about counsel than it would be about law, and there are days when I’m not so sure that some members of our tribe are equipped for that, either.  But that is an observation for another time.

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Filed under It Ain't Perry Mason, Logic Isn't Always The Life Of The Law, Pieces of the puzzle, Probates and Estates, The Practice