A few weeks into the New Year, how many of your clients’ resolutions have already fallen by the wayside? Exercise more. Eat less. Spend more quality time with family.
Well it’s not too late to help your clients tackle a very important resolution that up to two-thirds of adults in our country ignore — estate planning. That’s right, it’s the topic no one likes to think about, but everyone knows they should take care of … wills, trusts, powers of attorney, and more.
Your clients don’t have to be intimidated by it! In fact, celebrity stories are a great way to break the ice to remind everyone of what they need to do.
So, with the help of some recent stories in the news, here are Trial & Heirs: New Years Estate Planning Resolutions for 2012, for you to share with your clients. (Also, we recently gave an interview discussing some of these stories, which you can
1. Help Clients Plan Now and Stop Procrastinating.
R&B legend Etta James was 72 when she passed away last week, after suffering from leukemia, dementia and other problems. Canadian Olympic skier Sarah Burke was only 29 when she died recently from injuries in a freak skiing accident, despite being one of the top athletes in the world. It’s a sad reality that accidents and serious medical conditions can affect any of us, at any time. We all need to be prepared.
While it’s easy to procrastinate doing a will, trust or other legal document, the consequences can be devastating. Take author Stieg Larsson, whose Girl With The Dragon Tattoo book and sequels achieved global success. The recent Hollywood movie adaptation has grossed over $140 million worldwide since it was released a month ago.
Larsson died without even a will. This sparked a huge lawsuit between his live-in girlfriend of 32 years and his brother and father, whom the girlfriend claims were not close with Larsson. The family members inherited his now-vast estate (conservatively estimated at $40 million) and sued because the girlfriend has possession of a laptop with an unpublished fourth manuscript. You can read about the
Larsson died unexpectedly at the age of 50 from a heart attack. His procrastination with his estate planning means he did not get to decide whether his girlfriend or his family members inherited his estate.
Don’t let your clients make the same mistake with their estates. They’ve worked hard their entire lives; shouldn’t they decide who receives what, when, and how? No one should procrastinate and let the laws in the state they live in determine who receives their property after they pass away.
2. Clients Should Appoint Medical and Financial Decision-Makers.
Etta James’ final year of life was marred by controversy, between her husband of 42 years and her two adult sons from prior relationships. Her 2008 power of attorney gave legal authority to one of her sons, but her husband claimed it was signed after James already had dementia and was not competent. They fought in court over who would make her financial and medical decisions, and even how much money her husband would be allowed to have to pay for her care. You can read our
Luckily, the family reached a resolution a few weeks ago, around the time James’ illness was declared terminal. The settlement allowed her husband to make her medical and financial decisions as her conservator (called guardian in some states), but only permitted him to control $350,000 for her medical care.
Britney Spears is also under conservatorship, despite being much younger than James … or indeed, the large majority of adults who have conservators or guardians. Just recently, her father announced that he was going to ask the court to terminate the medical/non-financial part of her conservatorship so she could get married without restriction. Reportedly, he will hang onto the financial control. We have written before that the reasons for this are suspect, and may be for the purpose of
Whether your clients are 30, like Spears, or in their 70′s, like James (or any other age for that matter), it’s critical for them to have power of attorney and living will documents in place, in case they should suffer a serious medical condition or accident. Without these, your clients’ family members — even spouses — would have no right to make medical or financial decisions unless they go to court and seek guardianship and/or conservatorship.
As the Etta James case illustrates, this can be a breeding ground for a family fight. Even when there isn’t family fighting, such as in Britney Spears’ case, these court proceedings are still intrusive, public, expensive and very cumbersome.
It’s far better for your clients to keep themselves and their family out of court by having the proper medical and financial decision-makers appointed in their legal documents. That way they’ll be protected, in case something should happen to them that renders them unable to make their own decisions.
3. Don’t Forget About Updating Wills, Trusts and Other Legal Documents.
Think you can stop reading because your clients already have will, trust and power of attorney documents in place? Not so fast. When was the last time they updated their documents? Have they had life events like divorce, the birth of new children, starting a new business, or moving between states?
If so, or if they haven’t had their documents reviewed in the last three to five years, your clients still have work to do. Heidi Klum and Seal should take notice. When couples — especially those with children — file for divorce, it’s important to visit their attorney or financial planner and start the process of updating legal documents. Would your clients want their ex-spouses to make medical decisions for them or receive their life insurance? That often happens when documents aren’t updated.
Author Michael Crichton’s estate highlights this point. He died at the age of 66 from throat cancer, when his wife was six months pregnant. He never updated his will to include the new child, and in fact, his will had language excluding any new children. His adult daughter from a prior marriage and his wife fought in court over whether the baby should be allowed to inherit. You can read about the
Ultimately, the Judge ruled in favor of the wife, and the baby was allowed a share of the inheritance. But it never should have gone that far.
4. Get Your Clients’ Affairs Organized.
This is a critical step in the estate planning process which many people overlook. What good are properly-drafted wills, trusts, and power-of-attorney documents if no one can find them? Let your clients know they should inform family members where their documents are stored. And we highly recommend that clients use an estate planning organizer to list out their legal and financial documents and assets, so their family members know where to go if tragedy should strike.
Look at the recent Italian cruise ship disaster. There were reports of passengers stuck on board, calling loved ones to make sure the kids where going to be taken care of and telling people where to find their wills and other legal documents.
No one should wait for a personal tragedy; remind clients to prepare ahead of time. Once they organize their legal and financial affairs and let trusted loved ones know where the important legal and financial information is located, your clients can rest easier at night and not worry about protecting their families if something should befall them.
5. Encourage Clients to Talk With Their Family Members.
The proper estate planning is an act of love for family members, because family members pay the price when it’s not done or is done improperly. So talking to loved ones is an important part of the process. It’s not a matter of telling people what they will receive — that can certainly be kept private. But it’s very important for clients to let loved ones know they’ve done their planning, where their documents and information are located, and who the professionals are that they work with.
Clients should also talk to their family members to see if they’ve done their own estate planning. If they are not sure how to bring up the conversation, you can suggest that celebrity stories are a great way to break the ice and get the dialogue started.
Today we’ve shared just a few stories to get started; you can visit
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By Danielle and Andy Mayoras, co-authors of
