Starting today, I will be posting about conferences and seminars I will be attending or presenting. Here's my schedule for the week of November 3 through 8:
Nov. 4 - Bernstein Private Wealth Symposium
Hotel Nikko, San Francisco 8:30 - 1:30. You can read more about it here. The Bernstein symposium will focus on the roots of the current financial mess, and the potential for opportunities. Since much of estate planning is about preserving wealth for future generations, this should be informative.
Nov. 6 through 8 - State Bar of California Taxation Section Annual Meeting
Grand Hyatt, San Francisco. This is a three day event covering all manner of topics related to taxation. I will be attending seminars on taxation related to estate planning, wealth transfer and other trust and estate related issues.
These two conferences should provide a host of topics for future posts. Stay tuned!
Showing posts with label Education. Show all posts
Showing posts with label Education. Show all posts
Thursday, October 30, 2008
Monday, June 23, 2008
"Spending It All" is Not an Estate Plan
Last Saturday there was an interesting article in the New York Times about how increasing costs and other factors may reduce the potential inheritances of heirs. The article talks about how increased life expectancy, changes in social security and medicare laws, the decline of pensions, increases in health care costs, divorce, declining home equity, lifetime transfers of wealth, and other factors will deplete most estates, leaving little or nothing for the children.
One of the biggest obstacles I come across as an estate planner is "I don't need an estate plan. I plan on spending it all." This is a close cousin to the ever-popular "I don't have anything. Why do I need a will?"
My mantra about estate planning is "Control, Control, Control." The most important thing that an estate plan gives you is control. Control not only over who gets your money when you die, but over who makes decisions about your health care and personal care if you are incapacitated, who administers your estate when you die, who will take care of your children if they are under 18 and you are unable to take care of them, and on and on. Most of the control you get over your estate plan has little or nothing to do with how much money you have.
The problem with the "I intend to spend it all" philosophy is that presupposes that you know exactly when you will die, and have planned your spending accordingly. Most people don't know exactly when they are going to die. This goes for healthy young people as well as the terminally ill. I have talked to people who were told they had six months to live - 10 years ago. People on death row don't even know exactly when they are going to die. They just know, like everyone else, that it's going to happen some day. It has happened where death row inmates have died from natural causes while awaiting execution (just type "death from natural causes while on death row" into Google). It is because of this uncertainty that you should have an estate plan in the first place.
The concerns in Ron Lieber's column are real. Many people don't have a ton of money, and assuming they live long enough, we can only hope that they have enough to meet their needs as they get older. But don't construe this as a reason for not needing a living trust, durable power of attorney for personal care, or advance health care directive, among other things. The fact is that, if you live long enough, and are no longer able to take care of yourself, you will need someone to make the decisions relating to the concern in Mr. Lieber's article. A complete estate plan gives you control over your estate and affairs. That control is not dependent on how much money you have to give away (or even if you have any money to give away).
One of the biggest obstacles I come across as an estate planner is "I don't need an estate plan. I plan on spending it all." This is a close cousin to the ever-popular "I don't have anything. Why do I need a will?"
My mantra about estate planning is "Control, Control, Control." The most important thing that an estate plan gives you is control. Control not only over who gets your money when you die, but over who makes decisions about your health care and personal care if you are incapacitated, who administers your estate when you die, who will take care of your children if they are under 18 and you are unable to take care of them, and on and on. Most of the control you get over your estate plan has little or nothing to do with how much money you have.
The problem with the "I intend to spend it all" philosophy is that presupposes that you know exactly when you will die, and have planned your spending accordingly. Most people don't know exactly when they are going to die. This goes for healthy young people as well as the terminally ill. I have talked to people who were told they had six months to live - 10 years ago. People on death row don't even know exactly when they are going to die. They just know, like everyone else, that it's going to happen some day. It has happened where death row inmates have died from natural causes while awaiting execution (just type "death from natural causes while on death row" into Google). It is because of this uncertainty that you should have an estate plan in the first place.
The concerns in Ron Lieber's column are real. Many people don't have a ton of money, and assuming they live long enough, we can only hope that they have enough to meet their needs as they get older. But don't construe this as a reason for not needing a living trust, durable power of attorney for personal care, or advance health care directive, among other things. The fact is that, if you live long enough, and are no longer able to take care of yourself, you will need someone to make the decisions relating to the concern in Mr. Lieber's article. A complete estate plan gives you control over your estate and affairs. That control is not dependent on how much money you have to give away (or even if you have any money to give away).
Tuesday, May 6, 2008
Estate Planning Symposium (not so) live blogging
Last Friday and Saturday I attended an Estate Planning symposium put on by Continuing Education of the Bar. Speakers included practitioners from San Francisco, San Mateo, and Contra Costa counties. The conference was loaded with very useful and up-to-date information on bypass trusts, marital deduction, generation-skipping transfer tax, and other important topics, but the biggest takeaway was this:
"Estate planning is a process and not an event."
Preparing an estate plan is not something that happens all at once. It may start with a phone call to an attorney, followed by filling out a questionnaire, either by yourself or with the attorney, and then a conversation with the attorney. The conversation is where the planning really begins, because it is there where all of the imporatant information is conveyed: who you are, who your family is, what your goals are. The process of turning this into a coherent plan is not a simple one, and it doesn't end once the will or trust is drafted and signed by you. Your life may change. Your goals may change. The laws may change. The plan, if it is prepared properly, should be structured to accommodate changes, but it must be looked after and cared for.
With that in mind, many practitioners believe that it is therefore impossible to properly do your job with a flat fee arrangement. I have been a great supporter of the flat fee because I believe it fosters creativity and efficiency for attorneys. But I also acknowledge that it may limit an attorney's options, particularly where an estate plan may evolve and become more complicate than either the attorney or their client had originally anticipated.
I don't believe that hourly billing is inherently bad. Nor do I believe that a flat fee for an estate plan is always a bad idea. The most important thing in regard to fees is making sure your client knows that they are getting for their money, and is not surprised by how much it costs.
"Estate planning is a process and not an event."
Preparing an estate plan is not something that happens all at once. It may start with a phone call to an attorney, followed by filling out a questionnaire, either by yourself or with the attorney, and then a conversation with the attorney. The conversation is where the planning really begins, because it is there where all of the imporatant information is conveyed: who you are, who your family is, what your goals are. The process of turning this into a coherent plan is not a simple one, and it doesn't end once the will or trust is drafted and signed by you. Your life may change. Your goals may change. The laws may change. The plan, if it is prepared properly, should be structured to accommodate changes, but it must be looked after and cared for.
With that in mind, many practitioners believe that it is therefore impossible to properly do your job with a flat fee arrangement. I have been a great supporter of the flat fee because I believe it fosters creativity and efficiency for attorneys. But I also acknowledge that it may limit an attorney's options, particularly where an estate plan may evolve and become more complicate than either the attorney or their client had originally anticipated.
I don't believe that hourly billing is inherently bad. Nor do I believe that a flat fee for an estate plan is always a bad idea. The most important thing in regard to fees is making sure your client knows that they are getting for their money, and is not surprised by how much it costs.
Friday, May 2, 2008
Off to School
I will be attending a two-day conference on Estate Planning put on by Continuing Education for the Bar (CEB), a joint venture btween the University of California and the State Bar of California. Yes, that's a Friday and a Saturday. All day both days. I am dedicated to my craft.
In the meantime, you can read my guest post on Susuan Cartier Liebel's excellent blog Build a Solo Practice, LLC.
I will be posting on interesting items from the conference.
In the meantime, you can read my guest post on Susuan Cartier Liebel's excellent blog Build a Solo Practice, LLC.
I will be posting on interesting items from the conference.
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