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Legal Gangsters: Netflix’s I Care a Lot Uncovers the Dark Side of Legal Guardianship – Part 2

The Netflix movie I Care a Lot provides a dark, violent, and somewhat comedic take on the real-life and not-at-all funny dangers of the legal (and sometimes corrupt) guardianship system. While the film’s twisting plot may seem far-fetched, it sheds light on a tragic phenomenon—the abuse of seniors at the hands of crooked “professional” guardians.

Last week in part one of this series, we offered a brief synopsis of the movie, which revolves around Marla Grayson, a crooked professional guardian who makes her living by preying on vulnerable seniors, and we then outlined the true events that inspired the fictional account. The film’s writer and director, J. Blakeson, came up with the idea after reading news stories of a similar scam involving a corrupt professional guardianship agency in Las Vegas.

In that case, a real-life Marla Grayson named April Parks, who owned a company called A Private Professional Guardian, was sentenced to up to 40 years in prison in 2018 after being indicted on more than 200 felonies for using her guardianship status to swindle more than 150 seniors out of their life savings. While I Care a Lot is fictional, the Parks case also inspired the 2018 documentary, The Guardians, directed by award-winning filmmaker Billie Mintz, and his film details the terrifying true events that ravaged the Nevada guardianship industry.

In a Facebook post, Mintz praises I Care a Lot as “a perfect introduction to guardianship,” but worries that because of the movie’s heavy focus on violence and Russian mobsters, “people won’t believe it’s real.” However, as Mintz points out, “I assure you that everything you see about guardianship is true.”

Indeed, while the Parks case is the most famous, similar cases of senior abuse by professional guardians are on the rise across the country. A 2010 report by the Government Accountability Office found hundreds of cases where guardians were involved in the abuse, exploitation, and neglect of seniors placed under their supervision. And given the country’s exploding elderly population and our overloaded court system, such abuse will almost certainly become more common.

Additionally, although most of the cases that have made the news have involved the elderly, the fact is, any adult could face court-ordered guardianship if they become incapacitated by illness or injury and haven’t put the proper legal protections in place.

To this end, here in part two, we’re going to explain how you can protect yourself and your loved ones from such abuse using proactive estate planning. 

 

How It Happens

Should you become incapacitated without any planning in place (due to illness or injury), your family (or a friend) would have to petition the court in order to be granted guardianship. In most cases, the court would appoint a family member as guardian, but this isn’t always the case. If you have no living family members, or those you do have are unwilling or unable to serve or deemed unsuitable by the court, a professional guardian would be appointed. 

Beyond the potential for abuse by professional guardians, if you become incapacitated and your family is forced into court seeking guardianship, they are likely to endure a costly, drawn-out, and emotionally taxing process. Not only can the legal fees and court costs drain your estate, but if your loved ones disagree over who is best suited to serve as your guardian, it could cause a bitter conflict that could tear your family apart and make it less likely that you get the kind of care you want.

In another scenario, should your loved ones disagree about who should be your guardian, the court could decide that naming a relative as your guardian would be too disruptive to your family dynamics and appoint a professional guardian instead. However, if you have the proper planning vehicles in place, it is highly unlikely for a guardian to be appointed against your wishes.

 

A Comprehensive Plan For Incapacity
Should you become incapacitated, a comprehensive incapacity plan would give the individual, or individuals, of your choice the immediate authority to make your medical, financial, and legal decisions, without the need for court intervention. Moreover, such planning allows you to provide clear guidance about your wishes, so there is no mistake about how these decisions should be made.

There are several planning vehicles that can go into a comprehensive plan for incapacity, but a will is not among them. A will only goes into effect upon your death, and then, it merely governs how your assets should be divided, so it would do nothing to protect you in the event of incapacity.

When it comes to creating your incapacity plan, your best bet is to put in place a number of different planning tools rather than a single document. To this end, your plan should include some or all of the following:

 

  • Durable financial power of attorney: This document grants an individual of your choice the immediate authority to make decisions related to the management of your financial and legal affairs.
  • Revocable living trust: A living trust immediately transfers control of all assets held by the trust to a person of your choice to be used for your benefit in the event of your incapacity. The trust can include legally binding instructions for how your care should be managed, and the document can even spell out specific conditions that must be met for you to be deemed incapacitated.
  • Medical power of attorney: A medical power of attorney grants an individual of your choice the immediate legal authority to make decisions about your medical treatment in the event of your incapacity.
  • Living will: A living will ((sometimes called an advance directive) provides specific guidance about how your medical decisions should be made during your incapacity, particularly at the end of life. In some instances, a medical power of attorney and a living will are combined in a single document.

But here is the thing about all of these documents—they are just documents and not guidance for the people you love. If you really want to keep your family and friends out of court and out of conflict, you cannot just rely on documents to do it. Rather, these documents should be created by a lawyer who will get to know you, your wishes, and be there for you throughout the many stages of life, plus be there for your family and friends if and when you can’t be.

 

Communication is Key

In addition to the above planning tools, it is equally—if not more—important for your loved ones to be aware of your plan and understand their role in it. As part of our planning process, we hold a family meeting with all of the individuals impacted by your plan where we walk them through your plan and explain the reasoning behind your decisions and what they need to do if something happens to you.

By combining your comprehensive incapacity plan with a team of people who care for you, can watch out for you, and know exactly what to do in the event tragedy strikes, we can make it virtually impossible for you to be abused by a professional guardian.

Don’t Put It Off
Although incapacity from dementia is most common in the elderly, debilitating injury and illness can strike at any point in life. Given this, all adults 18 and older should have an incapacity plan. Furthermore, planning for incapacity must take place well before any cognitive decline appears since you must be able to clearly express your wishes and consent for the documents to be valid.

In light of this, you should get your own planning handled first, and then discuss the need for planning with your aging parents as soon as possible, and from there, schedule a Family Wealth Planning Session with us to get a plan started. And if you or your senior loved ones already have an incapacity plan, we can review it to make sure it has been properly set up, maintained, and updated. Unfortunately, a plan put in place years ago is unlikely to work now, so updating is critical, and unfortunately often not overlooked.

Indeed, once you have a plan in place, make sure to regularly review and update it to keep pace with life changes, changes in your assets, or changes in your family structure. And if any of the individuals you have named become unable or unwilling to serve for whatever reason, you will need to revise your plan—and we can help with that too.

 

Retain Control of Your Life and Assets

To avoid the loss of autonomy, family conflict, and potential for abuse that comes with court-ordered guardianship, we invite you to meet with us as your Personal Family Lawyer®. While there is no way to prevent dementia and other forms of cognitive decline or an unexpected illness or injury, we can put planning tools in place to ensure that you at least have some control over how your life and assets will be managed if it ever does occur. Contact us today to schedule your appointment.

 

This article is a service of Stephanie Hon, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Legal Gangsters: Netflix’s I Care a Lot Uncovers the Dark Side of Legal Guardianship – Part 1

The Netflix movie I Care a Lot provides a dark, violent, and somewhat comedic take on the real-life and not-at-all funny dangers of the legal (and sometimes corrupt) guardianship system. While the film’s twisting plot may seem far-fetched, it sheds light on a tragic phenomenon—the abuse of seniors at the hands of crooked “professional” guardians.

In this two-part series, we’ll discuss how the movie depicts such abuse, how this can occur in real life, and what you can do to prevent something similar from happening to you or your loved ones using proactive estate planning and our Family Wealth Planning process. For support in putting airtight, protective planning vehicles in place, meet with us as your Personal Family Lawyer®.

Note: This article contains spoilers for the movie I Care a Lot.

At the beginning of the movie, we meet Marla Grayson, a crooked professional guardian who makes her living by preying on vulnerable seniors. A professional guardian is a person appointed by the court to make legal and financial decisions for senior “wards” of the court, who are deemed unable to make such decisions for themselves.

Working with a corrupt doctor, Marla targets wealthy victims and gets a judge to order these individuals unfit to care for themselves and then appoint her as their guardian. From there, she and her business partner/ girlfriend, Fran, move the seniors into a nursing home, seize their homes, and sell all of their assets for their own financial gain.

Marla’s scheme takes a turn for the worse when her latest senior victim, Jennifer Peterson, turns out to be the mother of a Russian mob boss named Roman Lunyov. After Marla has Jennifer placed in a long-term care facility, Roman tries unsuccessfully to get his mother out of the facility, first by bribing Marla, then through the court, and finally by trying to break her out. 

While this may seem ludicrous, this kind of abuse actually happens outside of the movies to seniors with significant assets, even those with caring adult children like Roman. 

At this point, the movie descends into a violent back-and-forth between Roman and Marla, as they each try and fail to kill one another until they both decide that rather than murdering each other, they could make more money by going into business together. 

Fast forward to several years later, we learn that Marla and Roman have become millionaires after starting a global chain of senior care services, called Grayson Guardianships, which employs thousands of crooked guardians overseeing hundreds of thousands of “clients” all over the world.

 

Based On True Events

With its over-the-top violence, kidnappings, and Russian mobsters, some might dismiss I Care a Lot as nothing but Hollywood hype and find it hard to believe that an operation as sinister as Marla’s could ever actually exist. But the fact is, the movie’s writer and director, J. Blakeson, came up with the idea after reading news stories about very similar (less the mob and murder) situations. And knowing such things actually happen makes the movie even more terrifying.

“The idea first came when I heard news stories about these predatory legal guardians who were exploiting this legal loophole and exploiting the vulnerability in the system to take advantage of older people, basically stripping them of their lives and assets to fill their own pockets,” Blakeson told Esquire Magazine. “They run through their money as fast as possible, store them in the worst care home, and just forget about them. Just park them and then move on to the next one, and that felt almost like a gangster’s operation.”

And while the real-life scams never reached a level on par with Grayson’s Guardians, one crooked professional guardianship business in Las Vegas did manage to bilk hundreds of unsuspecting seniors out of their life savings. As we detailed in our previous article, Use Estate Planning to Avoid Adult Guardianship—and Elder Abuse, a real-life Marla Grayson named April Parks, who owned a Las Vegas-based company called A Private Professional Guardian, was sentenced to up to 40 years in prison in 2018 after being indicted on more than 200 felonies for using her guardianship status to swindle more than 150 seniors. 

In her case, prosecutors described how Parks, in a similar fashion as Marla, used a shady network of social workers and medical professionals who helped her track down her elderly victims. On the lookout for wealthy seniors with a history of health issues and few living relatives, Parks was often able to obtain court-sanctioned guardianship during court hearings that lasted less than two minutes.

From there, the guardians would force the elderly out of their homes and into assisted-living facilities and nursing homes. They would then sell off their homes and other assets, keeping the proceeds for themselves. Even worse, the guardians were often able to prevent the seniors from seeing or speaking with their family members, leaving them isolated and even more vulnerable to exploitation.

 

The Most Punitive Civil Penalty

What makes these cases particularly tragic is the fact that for the most part, everything these unscrupulous guardians did is perfectly legal. As Blakeson put it, “They had the law on their side, and there was nothing you could do.” Although guardianships are designed to protect the elderly from their own poor decisions, guardianship can turn out to be more of a punishment than a benefit. 

In a 2018 New York Times article detailing the state of the guardianship system in New York, Florida congressman Claude Pepper described guardianship as “the most punitive civil penalty that can be levied against an American citizen, with the exception, of course, of the death penalty.” 

Indeed, once you’ve been placed under court-ordered guardianship, you essentially lose all of your civil rights. Whether it’s a family member or a professional, the person named as your guardian has the complete legal authority to control every facet of your life. While guardianship is governed by state law and varies from state to state, some of the most common powers guardians are granted include the following:

  • Determining where you live, including moving you into a nursing home
  • Complete control over your finances, real estate, and other assets
  • Making all of your healthcare decisions and providing consent for medical treatments
  • Placing restrictions on your communications and interactions with others, including family members
  • Making decisions about your daily life such as recreational activities, clothing, and food choices
  • Making end-of-life and other palliative-care decisions 

Additionally, though it’s possible for guardianship to be terminated by the court if it can be proven that the need for guardianship no longer exists, a study by the American Bar Association (ABA) found that such attempts typically failAnd those family members who do try to fight against court-appointed guardians frequently end up paying hefty sums of money in attorney’s fees and court costs, with some even going bankrupt in the process.


Protection Through Planning

Given the potential for neglect, abuse, and exploitation that guardianship affords, it’s crucial that seniors and their families take the proper steps to prevent any and all possibility of falling prey to such scams. Moreover, because any adult could face court-ordered guardianship if they become incapacitated by illness or injury, it’s vital that every person over age 18—not just seniors—take proactive measures to prepare for potential incapacity.

Fortunately, there are multiple estate planning tools that can prevent such abuse from occurring. With us, as your Personal Family Lawyer®, we can put planning vehicles in place and offer ongoing advisory and support that would make it practically impossible for a legal guardian to ever be appointed—or need to be appointed—against your wishes.

Next week, we’ll continue with part two in this series on the dark side of adult guardianship and offer tips for how you can avoid the potential for abuse using estate planning.

 

This article is a service of Stephanie Hon, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Why You Should Create a Trust To Protect Your Business and Family

Although you can invest in many different types of insurance to protect your business from lawsuits and other liabilities, one of the greatest liabilities you simply can’t avoid, especially if you are the sole owner of your business, is your incapacity or death.

To make certain that your business—and the income it generates for your family—would continue to run smoothly when something happens to you, you need to create a comprehensive estate plan, and it really needs to include a trust. Without such a plan in place, your business will be stuck in an unnecessary court process, and it could easily cause the loss of everything you’ve worked so hard to build.

 

A Will Alone Is Not Enough
When it comes to creating an estate plan, most people typically think of a will. While it’s possible to leave your company to someone in your will, it’s far from the ideal option. That’s because, upon your death, all assets passed through a will must first go through the court process known as probate. The cost of probate, the time of probate, and the complexity of a court making decisions about your business assets are wholly unnecessary. 

During probate, the court oversees your will’s administration to ensure your assets (including your business) are distributed according to your wishes. But probate can take months, or even years, to complete, and it can also be quite expensive, which can seriously disrupt your operation and its cash flow. What’s more, probate is a public process, potentially leaving your business affairs open to your competitors.

Furthermore, a will only goes into effect upon your death, so it would do nothing to protect your business should you become incapacitated by illness or injury. Indeed, if you only have a will in place (or have no estate plan at all), in the event of your incapacity, your family would have to petition the court for guardianship in order to manage your business and other personal and financial affairs.

Like probate, the court process associated with guardianship can be long and costly. And in the end, whether it’s a family member or professional guardianship agency, there’s no guarantee the individual the court ultimately names as guardian of your assets would be the best person to run your company.

 

Maximum Protection For Your Business and Family

Given the drawbacks associated with a will, a much better way to ensure your business’s continued success is by placing your company in a revocable living trust. A living trust is not required to go through probate, and all assets placed within the trust are immediately transferred to the person, or persons, of your choice in the event of your death or incapacity.

Upon your death or incapacity, having your business held in trust would allow for the smooth transition of control of your company, without the time and expense associated with probate or guardianship. Using a trust, you can choose the individual(s) you think is best suited to run your company in your absence, whether that absence is permanent (your death) or temporary (your incapacity). What’s more, within the trust, you can also create a succession plan, which would provide the new owner with detailed—and legally binding—instructions for how you want the business run when you are gone. 

Finally, trusts are not open to the public, so your company’s internal affairs would remain private, and the transfer of ownership would take place in your lawyer’s office, not a courtroom.

Although the majority of business owners will get suitable protection for their business using a revocable living trust, for the most airtight form of asset protection, you may want to consider creating a specialized irrevocable trust. Such irrevocable trusts are quite complex, so they are not for everyone, ask your Family Business Lawyer™ to find out if such a trust would be suitable for your particular company.

 

A Comprehensive Plan

While placing your business in a trust is an effective way to protect your company upon your death or incapacity, it’s merely one part of a comprehensive asset protection plan. To get the maximum level of protection for your business, meet with us, as your Family Business Lawyer™.

We can analyze your business and its assets, and discuss all of the different tools available to ensure the company and wealth you’ve worked so hard to build will survive—and thrive—no matter what.

 

This article is a service of Stephanie Hon, Family Business Lawyer™. We offer a complete spectrum of legal services for families and businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. 

Just Married – 6 Estate Planning Essentials for Newlyweds – Part 1

As we head into the peak of wedding season, if you are a newlywed or are about to tie the knot, add “estate planning” to your do list. And yes, we imagine that at this happiest time of your life, planning for your potential incapacity and eventual death is probably the farthest thing from your mind right now, but getting it handled as part of your wedding planning is the greatest gift you can give your soon-to-be spouse.

First, be aware of the impact of doing nothing. If you were to become hospitalized for any reason prior to your marriage day, the person you love most in the world would not have the legal authority to make your medical decisions and may not even have the authority to see you in the hospital. Your beloved would have no access to your bank accounts and could even be put into a position of having to move out of your shared home abruptly in the event of your death.

If the idea of these potential realities is terrifying to you, call us today to get a “pre-marriage” plan in place, and then, after your marriage, we can update it.

Indeed, once your marriage is official, your relationship becomes entirely different from both a legal and financial perspective. With this in mind, if you’ve recently said “I do” or have plans to do so in the near future, here are six essential items you need to address in your plan.

1. Beneficiary Designations

One of the easiest—and often overlooked—estate planning tasks for newlyweds is updating your beneficiary designations. Some of your most valuable assets, such as life insurance policies, 401(k)s, and IRAs, do not transfer via a will or trust. Instead, they have beneficiary designations that allow you to name the person (or persons) you’d like to inherit the asset upon your death.

You should name your spouse as your primary beneficiary (if that’s your wish), and then name at least one contingent, or alternate, a beneficiary in case your spouse dies before you. And if you have kids, remember to never name a minor child as a beneficiary of your life insurance or retirement accounts, even as a contingent beneficiary.

If a minor is listed as the beneficiary, the assets would be distributed to a court-appointed custodian, who will be in charge of managing the funds until the child reaches the age of majority, at which point all benefits are distributed to the beneficiary outright. 

If you want your child to inherit your life insurance or retirement account, you should set up a trust to receive those assets instead. And if you have significant retirement account assets, you may not even want those assets to go outright to your spouse (or future spouse), but instead, you may want to use a trust to distribute your retirement account assets. If you don’t want your retirement assets to go outright to your named beneficiaries and want them to have the maximum tax advantages, contact us for a Family Wealth Planning Session™.

2. A Will

A last will and testament allow you to designate who should receive your assets upon your death. If you are newly married, you likely want your spouse to receive most, if not all, of your assets, and if so, you should name him or her as the primary beneficiary in your will.

Although your spouse would likely inherit all of your assets should you die without a will, known as dying intestate, depending on state law and whether or not you have children, your assets may not get divided according to your wishes, so it’s always a good idea to create a will (or update your old one) when you get married. And to ensure that your will is created and executed properly, you should always work with trusted legal counsel like us, and never rely on generic, fill-in-the-blank documents you find online.

Trust us—you don’t know what you don’t know here. Online legal document services may be better than nothing for some people, but they may actually be worse than nothing for those who truly want to ensure they’ve considered all of the options. For instance, an online document service cannot help you anticipate and plan for all the potential issues related to your family dynamics and assets that can arise and lead to conflicts and disputes between your loved ones. Yet that’s exactly what you would get when you work with a trusted legal advisor like us and use our comprehensive inquiry process.


Additionally, if you intend to leave assets to someone other than your spouse in your will, or for some reason plan to leave your spouse out of your will, be sure to check our state’s laws governing marital property. In some states, a surviving spouse is entitled to a certain percentage of your assets regardless of what’s in your will. Consult with us, your Personal Family Lawyer®, for clarification on our state’s marital property laws.

 

Finally, although a will is an essential part of nearly every estate plan, as you’ll see below, having a will alone is rarely enough to ensure your spouse and other loved ones stay out of court and out of conflict when something happens to you.

3. A Trust
Upon your death, assets included in a will must first pass through the court process known as probate before they can be transferred to your spouse or any other beneficiary. Probate can take months or even years to complete, and it can even sometimes lead to ugly conflicts between your spouse and other family members. Not to mention, your spouse will likely have to hire an attorney to represent him or her during probate, which can result in significant legal fees that can deplete your estate.

Furthermore, a will only govern the distribution of your assets upon your death. It offers you zero protection if you become incapacitated and are unable to make decisions about your own medical, financial, and legal needs. If you become incapacitated with only a will in place, your spouse would have to petition the court to be appointed as your guardian to manage your affairs.

 

Here’s the bottom line: If your estate plan consists of a will alone, you are guaranteeing your spouse and family will have to go to court if you become incapacitated or when you die.

To avoid the time, cost, and conflict inherent to an estate plan consisting solely of a will, you should consider creating a revocable living trust, along with your will. If your assets are properly titled in the name of your living trust, they would pass directly to your spouse upon your incapacity or death, without the need for any court intervention. 

What’s more, in the terms of your trust, you can even outline the specific conditions that must be met for you to be deemed incapacitated, which would allow you to have some control over your life in the event you become incapacitated by illness or injury. This is in contrast to a will, which only goes into effect upon your death and then merely governs the distribution of your assets. 

Finally, if you are getting married and have minor children from a previous marriage, there is an inherent risk of conflict between your soon-to-be new spouse and your children because your children and new spouse have conflicting interests about what happens to your assets in the event of your death or incapacity. If you want to ensure a lifelong relationship of harmony and ease between your children and your soon-to-be spouse, or new spouse, contact us—we have very specific strategies we can use to support that outcome. 

If you are soon-to-be-married or recently married and anything in this article makes you realize that estate planning isn’t something to put off, but a huge gift to the people you love, contact us to schedule a Family Wealth Planning Session™. This is the first step in considering all of your assets, all of your family dynamics, and getting clear on the right plan, at the right price, for the people you love.

 

Next week, we’ll continue with part two in this series on six estate planning essentials for newlyweds.

 

As your Personal Family Lawyer®, we can guide you to make informed, educated, and empowered choices to protect yourself and the ones you love most. Contact us today to get started with a Family Wealth Planning Session™.
This article is a service of  Stephanie Hon, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Why Estate Planning is a Women’s Issue

A group of wealth strategists at CIBC Private Wealth Management noticed that the women in attendance at educational seminars for client couples were often mum. So, as part of the firm’s Women’s CIRCLE initiative, they started women-only seminars, including one called Finding Your Way. The idea is that if you take an inventory of your financial life, and know a little bit about how the estate administration process works, you’ll be more confident and better prepared to deal with a death in the family.

The surprise: It wasn’t just older women in their 60s and 70s who have been signing up, but Millennial women, wanting to know what they should be doing to manage their own wealth and make sure their parents (especially moms who will generally outlive dads) are in good shape in the event of a death or divorce.

“These concepts are really daunting and quite scary,” says Becky Milliman, a managing director with CIBC Private Wealth Management in Chicago, noting that it takes courage for the less financially sophisticated family member to speak up, and that tends to be the woman.

Here are some top lessons.

Keep a list of trusted advisors. Many of the adult children couldn’t name their parents’ attorney or accountant. You shouldn’t just know their names, you should meet them or at least make a quick introductory phone call. Ditto for financial advisors, bankers, and/or insurance brokers. Keep an updated list with your will. More wealth management firms are rolling out “emergency contact forms” as a backstop for elder abuse. Fill them out.

Use a thumb drive. There were real concerns over digital assets, says Amanda Marsted, a managing director of CIBC Private Wealth Management in New York. Would you know the login information to access your spouse or parents’ accounts? Consider using a password manager, or store password information (and documents) on a thumb drive.

Have the conversation. What if mom or dad (or your spouse) says: “When you need to know, you’ll get the information.” Tell them: You don’t have to share balances, but at a minimum, you should share advisors, bank account numbers, and such. That will prevent much bigger problems down the line.

Keep important documents secure. Are your original wills and trusts at the lawyer’s office? Your real estate deed in your bank safe deposit box? Your insurance policies in one filing cabinet and income tax returns in another? The list goes on: retirement plan statements, birth/marriage certificates, Social Security cards. Make a list of these documents, including where you keep them. “You need to be prepared,” Milliman says.

Plan ahead if you have a family business. If you have a family business, do you have a succession plan in place? In one case, a widow was left with a business her late husband founded that she had no interest in carrying on. Luckily, it turned out to be an opportunistic time to sell, and Milliman helped the widow create a family foundation to minimize taxes from the sale and help her make a difference.

 Source: https://www.forbes.com/sites/ashleaebeling/2018/07/10/why-estate-planning-is-a-womens-issue/#35fdba54536e

Remarrying In Midlife? Avoid Accidently Disinheriting Your Loved Ones

​Today, we’re seeing more and more people getting divorced in middle age and beyond. Indeed, the trend of couples getting divorced after age 50 has grown so common, it’s even garnered its own nickname: “gray divorce.”

Today, roughly one in four divorces involve those over 50, and divorce rates for this demographic have doubled in the past 30 years, according to the study Gray Divorce Revolution. For those over age 65, divorce rates have tripled.

With divorce coming so late in life, the financial fallout can be quite devastating. Indeed, Bloomberg.com found that the standard of living for women who divorce after age 50 drops by some 45%, while it falls roughly 21% for men. Given the significant decrease in income and the fact people are living longer than ever, it’s no surprise that many of these folks also choose to get remarried.

And those who do get remarried frequently bring one or more children from previous marriages into the new union, which gives rise to an increasing number of blended families. Regardless of age or marital status, all adults over age 18 should have some basic estate planning in place, but for those with blended families, estate planning is particularly vital.

In fact, those with blended families who have yet to create a plan or fail to update their existing plan following remarriage are putting themselves at major risk for accidentally disinheriting their loved ones. Such planning mistakes are almost always unintentional, yet what may seem like a simple oversight can lead to terrible consequences.

Here, we’ll use three different hypothetical scenarios to discuss how a failure to update your estate plan after a midlife remarriage has the potential to accidently disinherit your closest family members, as well as deplete your assets down to virtually nothing. From there, we’ll look at how these negative outcomes can be easily avoided using a variety of different planning solutions.

Scenario #1: Accidentally disinheriting your children from a previous marriage

John has two adult children, David and Alexis, from a prior marriage. He marries Moira, who has one adult child, Patrick. The blended family gets along well, and because he trusts Moira will take care of his children in the event of his death, John’s estate plan leaves everything to Moira.

After just two years being married, John dies suddenly of a heart attack, and his nearly $1.4 million in assets go to Moira. Moira is extremely distraught following John’s death, and although she planned to update her plan to include David and Alexis, she never gets around to it, and dies just a year after John. Upon her death, all of the assets she brought into the marriage, along with all of John’s assets, pass to Moira’s son Patrick, while David and Alexis receive nothing.

By failing to update his estate plan to ensure that David and Alexis are taken care of, John left the responsibility for what happens to his assets entirely to Moira. Whether intentionally or accidentally, Moira’s failure to include David and Alexis in her own plan resulted in them being entirely disinherited from their father’s estate.

There are several planning options John could’ve used to avoid this outcome. He could have created a revocable living trust that named an independent successor trustee to manage the distribution of his assets upon his death to ensure a more equitable division of his estate between his spouse and children. Or, he could have created two separate trusts, one for Moira and one for his children, in which John specified exactly what assets each individual received. He might have also taken advantage of tax-free gifts to his two children during his lifetime.

Whichever option he ultimately decided on, if John had consulted an experienced estate planning attorney like us, he could have ensured that his children would have been taken care of in the manner he desired.

Scenario #2: Accidentally disinheriting your spouse

Mark was married to Gwen for 30 years, and they had three children together, all of whom are now adults. When their kids were young, Mark and Gwen both created wills, in which they named each other as their sole beneficiaries. When they were both in their 50s, and their kids had grown, Bob and Gwen divorced.

Several years later, at age 60, Bob married Veronica, a widow with no children of her own. Bob was very healthy, so he didn’t make updating his estate plan a priority. But within a year of his new marriage, Bob died suddenly in a car accident.

Bob’s estate plan, written several decades ago, leaves all of his assets to ex-wife Gwen, or, if she is not living at the time of his death, to his children. State law presumes that Gwen has predeceased Bob because they divorced after the will was enacted. Thus, all of Bob’s assets, including the house he and Veronica were living in, pass to his children. Veronica receives nothing, and is forced out of her home when Bob’s children sell it.

By failing to update his estate plan to reflect his current situation, Bob unintentionally disinherited Veronica and forced her into a precarious financial position just as she was entering retirement. If Bob had worked with an estate planning attorney to create a living trust, he could have arranged his assets so they would go to, and work for, exactly the people he wanted them to benefit.

For example, if he wanted the bulk of his assets to go to his children, but didn’t want to cause any disruption to Veronica’s life, he could have put his house, along with funds for its maintenance, into the trust for her benefit during her lifetime, and left the remainder of his assets to his kids. This would allow Veronica to live in and use the house as her own for the rest of her life, but upon her death, the house would pass to Bob’s children.

Scenario #3: Allowing Assets to Become Depleted
Steve is a divorcee in his early 60s with two adult children when he marries Susan. Steve has an estate valued at around $850,000, and he has told his kids that after he passes away, he hopes they will use the money that’s left to fund college accounts for their own children. But he also wants to ensure Susan is cared for, so he establishes a living trust in which he leaves all his assets to Susan, and upon her death, the remainder to his two children.

Yet, soon after Steve dies, Susan suffers a debilitating stroke. She requires round-the-clock in-home care for several decades, which is paid for by Steve’s trust. When she does pass away, the trust has been almost totally depleted, and Steve’s children inherit virtually nothing.

An experienced estate planning attorney like us could have helped Steve avoid this unfortunate outcome. Steve could have stipulated in his living trust that a certain portion of his assets must go to his children upon his death, while the remainder passed to Susan.

Additionally, Steve might have used life insurance to provide cash for Susan’s care upon his death, or he could have purchased a second-to-die life insurance policy for himself and Susan, naming his children as beneficiaries. Such a policy would ensure that regardless of the amount remaining in the trust, Steve’s children would receive an inheritance upon Susan’s death.

Bringing families together

Along with other major life events like births, deaths, and divorce, enteringinto a second (or more) marriage requires you to review and rework your estate plan. And updating your plan is exponentially more important when there are children involved in your new union.

As your Personal Family Lawyer®, we are specifically trained to work with blended families, ensuring that you and your new spouse can clearly document your wishes to avoid any confusion or conflict over how the assets and legal agency will be passed on in the event of one spouse’s death or incapacity.

If you have a blended family, or are in the process of merging two families into one, contact us, as your Personal Family Lawyer®, today to discuss all of your options.

What You Should Know Before Agreeing to Serve as Trustee

Being asked by a loved one to serve as trustee for their trust upon their death can be quite an honor, but it’s also a major responsibility—and the role is definitely not for everyone. Indeed, serving as a trustee entails a broad array of duties, and you are both ethically and legally required to properly execute those duties or face potential liability.

​In the end, your responsibility as a trustee will vary greatly depending on the size of the estate, the type of assets covered by the trust, the type of trust, how many beneficiaries there are, and the document’s terms. In light of this, you should carefully review the specifics of the trust you would be managing before making your decision to serve.

And remember, you don’t have to take the job.

Yet, depending on who nominated you, declining to serve may not be an easy or practical option. On the other hand, you might actually enjoy the opportunity to serve, so long as you understand what’s expected of you.

To that end, this article offers a brief overview of what serving as a trustee typically entails. If you are asked to serve as trustee, feel free to contact us to support you in evaluating whether you can effectively carry out all the duties or if you should politely decline.

A trustee’s primary responsibilities

Although every trust is different, serving as trustee comes with a few core requirements. These duties primarily involve accounting for, managing, and distributing the trust’s assets to its named beneficiaries as a fiduciary.

As a fiduciary, you have the power to act on behalf of the trust’s creator and beneficiaries, always putting their interests above your own. Indeed, you have a legal obligation to act in a trustworthy and honest manner, while providing the highest standard of care in executing your duties.

This means that you are legally required to properly manage the trust and its assets in the best interest of all the named beneficiaries. And if you fail to abide by your duties as a fiduciary, you can face legal liability. For this reason, you should consult with us for a more in-depth explanation of the duties and responsibilities a specific trust will require of you before agreeing to serve.
Regardless of the type of trust or the assets it holds, some of your key responsibilities as trustee include:

  • Identifying and protecting the trust assets
  • Determining what the trust’s terms require in terms of management and distribution of the assets
  • Hiring and overseeing an accounting firm to file income and estate taxes for the trust
  • Communicating regularly with beneficiaries
  • Being scrupulously honest, highly organized, and keeping detailed records of all transactions
  • Closing the trust when the trust terms specify

No experience necessary

It’s important to point out that being a trustee does NOT require you to be an expert in law, finance, taxes, or any other field related to trust administration. In fact, trustees are not only allowed to seek outside support from professionals in these areas, they’re highly encouraged to do so, and the trust estate will pay for you to hire these professionals.

So even though serving as a trustee may seem like a daunting proposition, you won’t have to handle the job alone. And you are also able to be paid to serve as trustee of a trust.

That said, many trustees, particularly close family members, often choose to forgo any payment beyond what’s required to cover the trust expenses, if that’s possible. But how you are compensated will depend on your personal circumstances, your relationship with the trust’s creator and beneficiaries, as well as the nature of the assets in the trust.

We can help

Because serving as a trustee involves such serious responsibility, you should meet with us, as your Personal Family Lawyer®, for help deciding whether or not to accept the role. We can offer you a clear, unbiased assessment of what’s required of you based on the trust’s terms, assets, and beneficiaries.

And if you do choose to serve, it’s even more important that you have someone who can assist you with the trust’s administration. As your Personal Family Lawyer®, we can guide you step-by-step throughout the entire process, ensuring you properly fulfill all of the trust creator’s wishes without exposing the beneficiaries—or yourself—to any unnecessary risks. Contact us today to learn more.

4 Things Trusts Can Do That Wills Can’t

Both wills and trusts are estate planning documents that can be used to pass your wealth and property to your loved ones upon your death. However, trusts come with some distinct advantages over wills that you should consider when creating your plan.

That said, when comparing the two planning tools, you won’t necessarily be choosing between one or the other—most plans include both. Indeed, a will is a foundational part of every person’s estate plan, but you may want to combine your will with a living trust to avoid the blind spots inherent in plans that rely solely on a will.

Here are four reasons you might want to consider adding a trust to your estate plan:


1. Avoidance of probate

One of the primary advantages a living trust has over a will is that a living trust does not have to go through probate. Probate is the court process through which assets left in your will are distributed to your heirs upon your death.

During probate, the court oversees your will’s administration, ensuring your property is distributed according to your wishes, with automatic supervision to handle any disputes. Probate proceedings can drag out for months or even years, and your family will likely have to hire an attorney to represent them, which can result in costly legal fees that can drain your estate.

Bottom line: If your estate plan consists of a will alone, you are guaranteeing your family will have to go to court if you become incapacitated or when you die.

However, if your assets are titled properly in the name of your living trust, your family could avoid court altogether. In fact, assets held in a trust pass directly to your loved ones upon your death, without the need for any court intervention whatsoever. This can save your loved ones major time, money, and stress while dealing with the aftermath of your death.

2. Privacy

Probate is not only costly and time consuming, it’s also public. Once in probate, your will becomes part of the public record. This means anyone who’s interested can see the contents of your estate, who your beneficiaries are, as well as what and how much your loved ones inherit, making them tempting targets for frauds and scammers.

Using a living trust, the distribution of your assets can happen in the privacy of our office, so the contents and terms of your trust will remain completely private. The only instance in which your trust would become open to the public is if someone challenges the document in court.

3. A plan for incapacity

A will only governs the distribution of your assets upon your death. It offers zero protection if you become incapacitated and are unable to make decisions about your own medical, financial, and legal needs. If you become incapacitated with only a will in place, your family will have to petition the court to appoint a guardian to handle your affairs.

Like probate, guardianship proceedings can be extremely costly, time consuming, and emotional for your loved ones. And there’s always the possibility that the court could appoint a family member you’d never want making such critical decisions on your behalf. Or the court might even select a professional guardian, putting a total stranger in control of just about every aspect of your life.

With a living trust, however, you can include provisions that appoint someone of your choosing—not the court’s—to handle your assets if you’re unable to do so. Combined with a well-drafted medical power of attorney and living will, a trust can keep your family out of court and conflict in the event of your incapacity.

4. Enhanced control over asset distribution

Another advantage a trust has over just having a will is the level of control they offer you when it comes to distributing assets to your heirs. By using a trust, you can specify when and how your heirs will receive your assets after your death.

For example, you could stipulate in the trust’s terms that the assets can only be distributed upon certain life events, such as the completion of college or purchase of a home. Or you might spread out distribution of assets over your beneficiaries lifetime, releasing a percentage of the assets at different ages or life stages.

In this way, you can help prevent your beneficiaries from blowing through their inheritance all at once, and offer incentives for them to demonstrate responsible behavior. Plus, as long as the assets are held in trust, they’re protected from the beneficiaries’ creditors, lawsuits, and divorce, which is something else wills don’t provide.

If, for some reason, you do not want a living trust, you can use a testamentary trust to establish trusts in your will. A testamentary trust will not keep your family out of court, but it can allow you to control how and when your heirs receive your assets after your death.

An informed decision

The best way for you to determine whether or not your estate plan should include a living trust, a testamentary trust, or no trust at all is to meet with your Personal Family Lawyer® for a Family Wealth Planning Session. During this process, we’ll take you through an analysis of your personal assets, your family dynamics, what’s most important to you, and what will happen for your loved ones when you become incapacitated or die.

Sitting down with your Personal Family Lawyer® to discuss your family’s planning needs will empower you to feel 100% confident that you have the right combination of planning solutions in place for your family’s unique circumstances. Schedule your appointment today to get started.

How Do Trusts Help You Save on Taxes?

Many people come to us curious (or confused) about trusts and taxes. So today’s article is going to sort it out and clarify things for you.

There are two types of trusts,

Revocable trusts:

The far more commonly used trusts, have no tax consequences whatsoever. A revocable trust has your social security number as it’s tax identifier, and is not a separate entity from you for tax purposes. It is a separate entity from you for purposes of probate, meaning if you become incapacitated or die your Trustee can take over without a court order, keeping your family out of court. But, until your death, it’s treated as invisible from a tax perspective. At the time of your death, if your revocable trust provides for the creation of irrevocable trusts, then the tax implications will shift.

Irrevocable trust:

Either created during life, at death through a revocable living trust, or through a will that creates a trust, that trust has its own EIN, or employer identification number (also called a TIN or taxpayer identification number). Generally, it pays income taxes on income earned by the trust, as if it’s a separate tax paying entity.

Trust income is taxed at the highest tax bracket applicable to individuals as soon as there is over $12,950 of income, so in some cases a trust can be drafted to provide that the tax consequences pass through to the beneficiary and are taxes at his or her rates. We will often do this when creating a Lifetime Asset Protection Trust for a beneficiary, so that the trust can provide the benefits of credit protection from lawsuits, divorce, or even bankruptcy, but not have the negative tax consequence of the highest tax rates on very little income.

Of course, if you have a trust, and you want us to review it for the income tax consequences to your loved ones after your death, please contact us.

Now, let’s talk about estate taxes. Currently, if you die with assets over $11.58M, then your estate will be subject to estate tax on all amounts over that $11.58M at the rate of 40%. Yep, 40% will go to the government. You can mitigate these taxes, or even eliminate them by using various planning methods, most of which are fairly complex, but worth it if you can save your family that 40% estate tax.

If you are trying to figure out whether an irrevocable trust, or a revocable trust or even a Lifetime Asset Protection Trust is best for you and your beneficiaries, we, as your Personal Family Lawyer®, can help you weigh that decision and make the right choice for yourself and the people you love.

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