Want Your Estate To Go To The Dogs? Yup, We Can Do That.

Posted on June 22, 2010 by Victor Medina

Welcome to Absurd Estate Planning.  A category I had to create just to hold stories like this one.

Making the estate planning news recently is the inheritance by Conchita the Chihuahua of a $3 Million dollar trust fund and a $8.3 Million dollar mansion in Miami Beach.  You can read the full text from the Wall Street Journal here, but the WSJ starts out:

Her name is Conchita, a thin, spa-loving, diamond-draped heiress, and she’s at the center of one of America’s nastiest estate battles.

She is also a dog—a chihuahua who was the favorite of the late Miami heiress Gail Posner, a daughter of the corporate takeover artist Victor Posner.

Here’s a picture of Conchita.  She’s on the left.

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(I’m not sure that’s Conchita’s real hair.)

How do I know this?  Because this decedent, Gail Posner, left $26 Million to seven of her bodyguards, housekeepers, and aides, along with the inheritance to Conchita, under a Will – which is quite public so everybody knows about it.  It’s also now the subject of a challenge by Gail Posner’s only living child (of the two-legged variety), who is alleging undue influence by the beneficiaries of the Will.

There are a couple lessons here about “undue influence” and the privacy benefits of not leaving millions of dollars to a non-human via a Will – but honestly, I can’t stop chuckling long enough to go into detail about it.  I’m not sure my clients, current or future, would ever find relevance in the story of Conchita the Chihuahua. Suffice it to say that even the rich, famous, and loony can’t get it right.  For the record, when it comes time to depart this Earth, I will not be leaving any non-human my cherished iPhone XG-5000.

Not to discriminate against the cold-blooded, Posner also provided for the care of her….turtles.

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Moral of the story: When you make your own estate plan, don’t put your head into your shell….or any other orifice, for that matter.

 

Posted by Victor Medina, Medina Law Group, LLC

Photos by The Daily Beast, and courtesy of Flikr user whitepebbles and the CC license.

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Estate Planning in a Google Search Story

Posted on April 12, 2010 by Victor Medina

Just like the famous Google Ad about finding love in Paris, we’ve created our own Estate Planning Google Search Story. It’s all about why searches on estate planning keep bringing up “www.JerseyEstatePlanning.com” as the top result and finally asks the question, “Who is www.JerseyEstatePlanning.com?”

The answer, of course, is: Medina Law Group, YourLawyers4Life.

Here is the video:

Posted by Victor J. Medina, Medina Law Group

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The Power of Story-Based Planning Part 2

Posted on February 24, 2010 by Victor Medina

Continuing with the great stuff from Scott Farnsworth and Sunbridge Legacy Builder Institute. Here is the second installment in Scott’s series about the power of story-based planning. Again, I don’t usually repost other people’s information, but I’ve got a different audience than Scott does for his blog, and I want this information out in the public.

The Power of Story-based Planning Part 2

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.

Original post by Scott Farnsworth. Published on February 24, 2010 on New Jersey Estate Planning by Victor Medina, Medina Law Group.

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Story-Based Planning vs. "Numbers"-Based Planning

Posted on January 25, 2010 by Victor Medina

One of the things that guides my practice is the gap between what clients want and what most advisors and planners can deliver. In my experience, clients want a caring advisor who can help them build and leave a legacy to their loved ones (financial and otherwise). However, most professionals lack the skills and tools help clients build that legacy. I work very hard to meet my client’s needs and provide the experience and results that they want.

One of my “secret weapons” is my association with the Sunbridge Legacy Builder Institute and , run by Scott Farnsworth in Harmony, FL. You can learn more about Sunbridge by clicking on their name. I wanted to share something that Scott wrote on the difference between Story-Based Planning and “Numbers”-Based Planning.

This article is written as a note to other advisors and planners, but I share it with you because I think it is an excellent illustration of the gap that I referenced at the beginning of this post. I want to comment further on all of this, especially regarding why I’ve adopted this model in my practice, but I don’t want this post to run too long. For now, enjoy Scott’s article.

The Power of Story-based Planning – Part 1 – By Scott Farnsworth

Virtually all my “official” training as an estate planning attorney and a Certified Financial Planner has been about numbers. Tax rates, code sections, rates of return on investments, asset allocation models-the unwavering focus has been on something quantifiable. The underlying message always came through loud and clear: unless something can be tallied on a ledger sheet, it isn’t worthy of our professional attention and probably isn’t all that important. Only “numbers-based planning” is real planning.

But my gut-and my real-life experience-told me something different. They told me that when numbers-based planning collided with human beings, i.e., our clients and their children and grandchildren, either the planning was never actually implemented by the clients, or the wheels came off when the planning landed with a thud on the succeeding generations. They told me that the most clever and tightly-wound estate or financial plans could and would be unraveled by the people they were designed to “help” or “protect.” They told that we planners ignore the human issues at our peril, and at the peril of the beautiful numbers-based plans we crank out.

My sense was often that with numbers-based planning, the tax tail was wagging the dog-driving the planning instead of riding in the back seat along with all the other significant but not critical factors. One significant study found that the likelihood of a family-based business surviving into the second generation was inversely correlated to the amount of tax planning the first generation had done. (Correlates of Success in Family Business Transitions, Morris, Williams, Allen, and Avila, Journal of Business Venturing 12, 365-401, 1997) In other words, the tax doctors were actually killing the patients they were hired to “save.”

Numbers-based planning might work if we were planning for robots, but we’re not. We’re planning for real flesh-and-blood people. I recall a series of conversations with a couple from New York City who had spent tens of thousands of dollars for one of the premier law firms in the country to draft a plan to care for their estate and their two teenage children. The plan touched all the legal and tax-planning bases, but in the words of the wife it was “cold and impersonal, not what I want to leave for my children.” The expensive, well-drafted plan was never executed but remained nothing more than a pile of paper, glistening with lawyerly brilliance on the surface but empty and meaningless underneath.

Unfortunately, that couple’s experience is repeated all too often. In my view, such outcomes will not change until we take a fundamentally different approach to this whole business of estate and financial planning. They will not change until we spend more time listening to client stories than tallying up their balance sheets; until we tailor their plans to the human hopes, dreams, and fears imbedded in their stories; and until the plans we create help them tell the story of their legacy-of who they really are and what impact they have had and hope to have on the people and causes they love. I call this approach story-based planning.

-Scott Farnsworth

Posted by Victor J. Medina, Medina Law Group, LLC

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Living Trusts For The Non-Rich

Posted on January 21, 2010 by Victor Medina

The term “trust fund” conjures up images of mansions, yachts and huge fortunes. But once the province of the very rich, trusts have found themselves into the lives of many families who’ve never thought of themselves as wealthy.

Trusts come in myriad forms, but for middle-class families, the living trust is popular because the person creating the trust can enjoy lifetime benefits. You can deposit assets in your own trust and ask the trustee to manage them prudently and pay the income to you, so you have more time for hobbies, travel and family.

Later, there are other important advantages. The property in a living trust that survives you can avoid the costs, publicity and delays of probate and speed property distribution to your spouse or other beneficiaries. If you choose, the trust can continue for their benefit in order to provide sound investment management and reliable financial support.

What Is a Living Trust, Anyway?

Unlike a trust you might establish by will, a living trust is set up by a written agreement between you and the trustee, and it takes effect immediately.

While you can be your own trustee, you may prefer to name a professional trustee to manage the trust assets, keep good records, pay you a regular income and—should you become incapacitated—pay your household and medical bills.

A living trust can be revocable or irrevocable. The advantage of a revocable trust is that you don’t give up control—you can amend its terms or even cancel it whenever you wish. On the other hand, you may want to put some of your assets in an irrevocable trust so you can achieve other significant goals.

For example, you could set up a charitable remainder trust to pay yourself a dependable income for your lifetime and then distribute the remaining principal to our organization. The substantial, current income tax savings as well as future estate tax savings of this kind of trust magnify its appeal.

Your Estate Plan, Too

A revocable living trust can be an important part of your estate plan. It’s an ideal vehicle for holding title to real estate outside your home state. You can make your life insurance payable to your trust. And the trust can include a credit shelter trust provision to help minimize estate taxes and other provisions to make gifts to family and charitable beneficiaries.

Along with your attorney, we can show you how a living trust can blend your personal needs, estate plans and philanthropic intentions.

SOURCE: University of Georgia in an article written by Mary L. McCormack

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Colbert Report Platinum Club – Estate Tax Repeal

Posted on January 14, 2010 by Victor Medina

I thought folks would be up for a change of pace. Here is what Steven Colbert thinks about the estate tax repeal. Pick it up at the second segment at minute 12:00. Enjoy.

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Probate and Living Trusts in NJ & Transferring Non-Financial Assets

Posted on December 9, 2009 by Victor Medina

Folks in the Princeton area are probably familiar with the US 1 newspaper that is handed out free to area businesses. It’s a good paper that offers a lot of insightful articles on business-related issues and items of interest in the Princeton area.

Usually, the newspaper includes an editorial, and a few months ago, one of the editors submitted a column about how difficult and frustrating it was to wind up the affairs of his mother’s estate. The thrust of his story was that he never got a chance to begin to grieve the loss of his mother, as she quickly became a set of papers and projects to be completed.

I completely sympathize with his position. As an attorney that helps families go through transitions, it’s all too familiar a situation that the person gets lost behind the process. That happens, too, by the way, when we help older folks transition from life on their own to an assisted living facility and then a nursing home.

One of the things that we focus on, especially when we get a chance to do proactive estate planning, is the transfer of wealth of the non-financial assets. The goal that we share with our clients is to make the transition as seamless as possible while at the same time allowing the client to maintain control and flexibility over their assets during their lifetime.

Ours is an atypical approach to estate planning, to be sure, but we find that this philosophy and approach resonate with almost every client and planning partner we encounter.

Also in this article was a suggestion by the writer that the use of living trusts was overrated in New Jersey because of the ease of the probate process. While I disagree with the notion that living trusts are overrated, I agree that the acceptance of a will into probate process in New Jersey is relatively painless. The Surrogate’s office makes the process of submitting a will and having Letters of Administration issued a fairly smooth one. (Especially when you have a qualified attorney to help you along the way.)

However, I was more than a little amused by the rest of the editor’s column, in which he begins to lament the obstacles and struggles that occur in the actual administration of the estate. I say amused only because most of his difficulties would have been greatly reduced by the existence of, you guessed it, a living trust.

Here is the link to the article where the editor gratefully published my response.

Posted by Victor Medina

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Balloon Boy Fallout – Should Heenes Lose Custody of Children if Guilty of Hoax?

Posted on October 22, 2009 by Victor Medina

Amber Watson-Tardiff, who posts a regular column on NJ.com about Parenting Advice for New Jersey parents asked me to comment for an article she was writing about the fallout from Balloon Boy, including anticipating court intervention with the parents.

You can read the whole article here – and I’ve pasted most of the column below (and bolded my portion for my mom’s easy reading):

It was just a week ago that the nation was captivated and horrified by the runaway weather balloon that supposedly carried away six-year-old Falcon Heene–or so we thought. But the Heenes could now be, charged with staging an elaborate hoax.

While most people seem to be focused on the criminal charges the Heenes may face, what damage was inflicted on their children? And does the state of Colorado have grounds to intervene?

Clearly the incident had a detrimental effect on balloon boy himself, as the world watched him vomit on live TV during an interview with Meredith Viera.

Today we hear accusations from a former co-worker of Mayumi Heene claiming that Richard Heene is unbalanced and worrying that a Jonestown incident could ensue if his wife and children are not taken out of the home immediately and placed in protective care (apparently Richard was trying to earn enough money from a reality show so they could build a bunker and hide from the sun exploding in 2012).

And while I hate to see any child taken out their home and placed into the hands of strangers, there may be legitimate cause for concern.

In fact, it may already be too late to avoid state involvement according to Victor Medina, managing partner of Medina, Martinez & Castroll, a Pennington, NJ law firm focused on counseling families in crisis.

According to Medina, the state agency charged with child welfare has a responsibility to make sure the Heene kids are safe.

“If this was truly a hoax, you can bet the parents will have to explain why they thought it was a good idea to involve their kids in this stunt. If it wasn’t a hoax, then Richard and Mayumi Heene will still have to say why they permitted such a potentially dangerous situation to unfold. Either way, the Heenes can expect to answer for their actions as parents,” he said.

But state intervention isn’t always the answer, Medina contends. “By all accounts, this was a loving, if misguided, family. Sometimes the court system can get over-involved in the lives of a family and create more of a mess down the road. As in all things, reactions have to be carefully measured so that the best interests of the children, both balloon boy and his siblings, are served,” he says.

So what, if anything, can the Heenes do at this point to ensure their kids don’t wind up in the care of strangers if they are incarcerated or deemed unfit as parents by the state?

According to Georgia Family Law attorney, Steve Worrell, it’s not too late to make custody arraignments should both parents get slapped with jail time.

Worrell says, “The Heenes can name guardians now for their kids in the event the state deems it necessary to intervene. Then if they are found to be unfit, their choice of guardians will likely be honored by a court unless the selected parties are also found to be unfit.”

Only time will tell what’s going to happen with these poor children, but I’d like to know what you think? Should the state intervene to protect the welfare of these kids? Or is this just a case of poor judgment from otherwise loving parents that can be easily fixed with counseling?

Article written by Amber Watson-Tardiff and featured at NJ.com Parenting Guidance Section posted here on October 22, 2009.

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Estate Planning Myths & Misconceptions – Myth #3 – An Estate Plan Is Not A Will

Posted on August 25, 2009 by Victor Medina

Most people think of “doing estate planning” as the act of creating and signing a will. While in some cases, a will is the best instrument, you can’t get to that answer without engaging in a comprehensive process where the lawyer gets to learn about you and your family, your goals and desires, your values and expectations. Only then can an effective estate planning attorney recommend the best document or set of documents to create an estate plan that “works” for you.

While it is a near certainty that some day you will die (notice how a good attorney never lets himself get painted into a corner), the truth is that you will more likely experience a long-term disability than a catastrophic death. If all you have is a will, you’ve done nothing to plan for that disability. A comprehensive approach will include planning for your disability as well as your passing.

In the end, estate planning should be about giving you the control and flexibility to live your life with peace of mind, knowing that there are safeguards in place that will help you provide for your loved ones if you are disabled. An effective estate plan will let you give what you want, to whom you want, when you want them to have it, and in the way you want them to have it. All the while providing a way to allow you to pass along your wisdom with you wealth.

Posted by Victor Medina
Medina, Martinez & Castroll, LLC

Posted in Disability, Living Will, Myths & Misconceptions, Simple Wills | 1 Comment

Estate Planning Myths & Misconceptions – Myth #2 – All Estate Plans Are The Same

Posted on August 21, 2009 by Victor Medina

In my first post, I talked a little about those attorneys who offer to do it all for you (real estate, commercial litigation, business representation), including your estate planning. Just as not all estate planning attorneys are the same, Myth #2 is that not all estate plans are the same.

Despite what Suze Orman will tell you (and sell you), you should not get your estate plan out of a box. If the attorney (or financial professional) you’re interviewing is bragging about how easy it is create a will or a trust, you should run, not walk, in the other direction. The term “boilerplate” as it pertains to your entire document, should not be a source of comfort, but a source of concern.

The truth is that not all estate plans are, or should be, the same. While the word processing elements of an estate planning document is not altogether difficult (did you know that attorneys own computers?), a will or a trust is not something that should be created by the attorney without input from you.

A good estate planning attorney will want to spend time with you to figure out your hopes, your dreams and goals. Once you teach us the family, we will help you learn the law, and together we will create an estate plan that works.

Posted by Victor Medina
Medina, Martinez & Castroll, LLC

Posted in Do-It-Yourself Legal Planning, Myths & Misconceptions | Leave a comment