Stripped

I am amazed at how little knowledge most people have regarding estate planning. Far too many people express the belief that the state will take at least some of their property if they die intestate (without a will). Many believe that the estate plan does not allow for much if any creativity, unless they have lots of money. They believe that an estate plan, in fact, is not necessary unless the estate is worth lots of money. They also believe that it costs too much money to develop a good estate plan. Well, I draft wills, trusts, powers of attorney, and other estate planning documents, and I generally charge very little. My rule of thumb: help the client. If you seek diligently, you will find others who feel the same.

I had a funny post for this Friday, but some client issues caused me to rethink my plan, and so on Monday you get the funny post. (Hey, it’s about a friend of mine who can pee over a golf cart. Yes, she can.) Today, I offer some educational nuggets and maybe some inspiration regarding your estate. Yes, I know, not only is it not the funny post, but it is quite the opposite. "Let’s contemplate our deaths, shall we?!"

Dying Without a Will

First of all, every state has an intestate succession statute which distributes the deceased’s estate in the event that no will exists. The typical intestate succession statute leaves everything to the spouse if there exists no children. For the record, "children" usually includes legitimate, illegitimate, stepchildren, adopted children, and those children derived from artificial insemination. If the deceased is married with children, then the spouse gets one half, and the children split the other half. (Read that again if necessary.) If the deceased leaves children but no spouse, then the children split everything. If the deceased leaves no spouse and no children, then the deceased’s parents take everything in equal shares. If no parents exists, then the maternal grandparents split one half, and the paternal grandparents split the othe half. On and on it goes.

Simple Guidelines for the Will

First of all, the authentication of the will can be bedeviled if the will presented for probate has handwritten deletions, modifications, or other marks suggestive of these. For that reason, I strongly advise everyone never to give others a copy of your will. It is senseless, anyway. Why do that? Keep the original in a safe place, and if you just must have a copy, make sure it is watemarked or otherwise notated on every page in such a way that it is clearly identified as a copy. If you want to discuss it with your children, parents, friends - fine. They do not need copies.

There is no requirement that a will be typed, prepared by an attorney, or stored in a safe deposit box. However, understand that software programs and other quick fixes generally do not adequately consider each state’s laws regarding wills and probate. The area of wills and probate is a state-controlled area, and each state has its own probate code. States vary, though not by much typically, in what they formally require in order to have a valid will. In general, a will must be written, signed by the testator, present the intent and capacity necessary to make a will, be dated, and be witnessed. The witnesses may even be beneficiaries.

When a husband and wife prepare wills, they often forget to include a Simultaneous Death clause. This can matter greatly. Understand that a husband and wife cannot operate with just one will. Each person needs his or her own will. Now, consider the spouses dying in a plane crash. If such an event occurs, it can be impossible to determine who died first. The husband’s will may have left a few things to his children from a previous marriage, and the rest to his wife. The wife’s will may have left a few things to her children from a previous marriage, and the rest to her husband. Whose will controls? Good question. That is why the spouses need corresponding Simultaneous Death clauses.

Finally, utilize the Memorandum option. Most jurisdictions allow the use of a separate document called a Memorandum. The Will itself references the Memo and instructs that all bequests in the Memo be satisfied prior to the Will, which directs the division of the remainder. The Memo is a separate, usually one-page document that contains a two-columned list. One column is for the asset to be described, and the other column is for identifying the beneficiary to receive the listed asset. This Memo can be added to over time. For instance, a person can keep this Memo in a safe place and pull it out after the holidays, upon learning that John Junior has always loved the gun cabinet in the garage. Old Crappy Gun Cabinet in the garage…. John Junior. The "Will" was just amended.

Everyone Can Be Creative

Life insurance proceeds are not probate property! This means that this money does not pass under a will. It passes as directed in the contract of insurance - typically called the insurance policy. However, do not ever forget or underestimate the importance of life insurance when it comes to estate planning. Sure, I know. You have a policy or two. Odds are, the beneficiaries of those policies are spouse, kids, maybe even parents. That’s good. However, if you want to do something really cool, create a trust. It’s not too expensive. In fact, I created a trust last week and charged the person $125. Why create a trust? Check this out.

Consider Joe and Amy, who have three children, 10, 6, 3 years of age. If Joe and Amy die, then the estate may receive life insurance money from one or both of the spouses, assuming the other spouse was the beneficiary. In that case, the children (or their guardian…. think long and hard about this…) would get the money. Arguably, a better scenario would have this money being managed in such a way that it could not be spent except as the parents would want it spent were they alive. Hence, the trust.

To make this short, I will complete the example with what I did last week. I established a trust for Joe and Amy. According to the trust, the guradian (or parent if one is still alive) of the children can spend money on behalf of the children only for education, health or welfare. When each child reaches 18, the child gets $2,500. When the child reaches 21, the child gets $5,000. When the child reaches 25, the child gets $7,500. When the child reaches 30, the child gets his or her share. You see, the beneficiary of the $250,000 life insurance policy was the Joe & Amy Children’s Trust. Upon Joe’s death, $250,000 went into a trust, managed by the bank. The bank is authorized to invest with minimum to moderate risk. The trustee is authorized to distribute funds only as authorized in the trust document. Think about this. Let your creativity and imagination work.

Live Well, Die Well

That’s enough for now. Of course, estate and other taxes must be considered. If the estate is valued at a million dollars, the government may get over a third of it in taxes. There are ways to diminish these taxes. Lifetime gifts, shelters, and so on. I will not bore you anymore, though. Just remember that it doesn’t take much these days to have an estate valued that high. Do you have a house, land, a vacation home? If you die in 10 years, what do you imagine their values will be? Add to that the values of automobiles, bank accounts, and so on… It adds up quickly.

Maybe I will post more on this. Let’s see if anyone is awake enough, cares enough, is curious enough to read it, first!

Have a great weekend!

Image Furious Purpose by Mike Williams.

A local law firm specializing in plaintiff’s work (read: personal injury, "ambulance chasers" - which I can say because I worked in that area for a few years) advertises on television. The firm’s catch phrase is "because bad things happen to good people." I know several of the attorneys at this firm, and they are good guys. Nevertheless, I am not a fan of most legal advertising. To put it simply, if the advertising is educational and reflects an underlying desire to assist those who really need legal assistance, then fine. I see few of those ads, though. Instead, I see: "Call the Law Offices of George Sink because we get your money FASTER!" "When you’ve been injured, think GREEN! Bill Green, the Heavy Hitter." "If you need the money owed to you, call Bellinger and Associates. We get the money you need."

 

What the hell? So I guess it is settled. To all of the longstanding, perfectly valid and justifiable reasons to file a lawsuit, now add another: if you need money, sue someone. Not that we needed any reminder of this development, but the overt pandering to this growing greed is dangerous in so many ways. For now, please do not follow the car in front of you too closely. They are waiting for you. If you own a place open to the public, check the floors regularly. Someone will be there soon to slip and fall. Sit tight, play safely, and I will post more on this later. Meanwhile, it is true that bad things happen to good people. For that matter, it is true that bad things happen to bad people, good things happen to bad people, and good things happen to good people. In fact, it is true that things happen to people, and everything has a reason.

Cherrie commented on my previous post, asking why bad things happen to people, asking if the deity is evil, asking if we are being tested, and asking why some must pay for the failings of others. Of course, I have been a "good people" and a "bad people." I have had good and bad things happen to me. I have paid for the moral failings of others, and others have paid for my failings. None of this qualifies me to answer her questions, but you know I consider myself qualified to talk about it, anyway.

Joey walks into a store and sees an item he simply must have. He hasn’t enough money, so he grabs it and runs. In the course of his flight, he collides with Susie, who falls and breaks her leg. By the time she finds someone to retrieve eight-year-old Susie Junior from school, Susie has been adbucted. Joey also darted across the street, causing two cars to collide. The driver of one car lost her unborn baby. In the course of the collision, one car struck an electrical pole, causing power to be lost all along the block. The loss of power caused a home-dialysis patient to lapse into a coma and later to die.

Lots of things happened to lots of people. Did these things happen because Joey stole? Did they happen because Joey’s parents divorced? Did they happen because the store owner was a racist, greedy jerk? Did they happen randomly? Did they happen because the dialysis patient formerly was an alcoholic spouse and child abuser

Arguably, any of these "reasons" could be attributed to the results. Cause and effect are real, and when we begin to truly engage in such analysis, we may be frightened to realize how little control we have over our own lives, those of our children, and so on. We also may realize that it does matter when we plug into our community, our families, our neighborhoods, local politics, and other places where we may serve as one more level of overseers, one more layer of rolemodels. However, when I speak of everything happening for a reason, I am speaking in terms of one simple concept. Oh, "simple" may berate some of you, but in theory, the concept is simple: there is a higher purpose beyond ourselves, and every circumstance will bring us closer to that purpose … eventually.

You may believe the higher purpose is of God. You may not. Whatever. You even may believe there is no higher purpose. I’m sorry. Truly. Assuming there is a higher purpose of some sort, though, then nothing we can do - bad, good or indifferent - will thwart this purpose. One key to a more successful life is to develop the discernment to determine your purpose(s). In so doing, you will be better able to take the bad things that happen and turn them to good.

Susie’s broken leg may or may not have caused Susie Junior to be abducted. What we know is that Susie must change some things, at least temporarily, in her life. This can be good, but we are not in positions to know or judge for her. As for Susie Junior, it is unquestioned that children do not deserve to be abducted, raped, killed. Perhaps Susie starts an organization of some sort to combat predators, to assist victims. Maybe she runs for office. Maybe Susie Junior is rescued and does amazing things. The driver who lost her baby may change her life, in turn changing countless others… On and on it goes… Six Degrees is a new show that touches a little on the concept of the rippling effect of our actions and inactions. Pay It Forward is a movie about a similar concept. Many movies and books are founded on the premise.

Bad things happen to people because nature contains things we do not yet understand. We live in a world with people we do not understand and cannot control. We make decisions without fully realizing the ultimate impact. On and on… Most people who ask the question really are asking "why does God allow it?" That is simple: for God to step in and stop every bad act from happening would be for God to contradict the laws God created in the first place ~ the laws of gravity, physics, the natural systems contained in all organisms, and the natural flow of cause and effect. If God wanted Legoland, things would be drastically different. Imagine being able to direct your boyfriend/girlfriend/husband/wife’s every move and every word. Cool, huh? For how long though? If you make me say I love you and make me buy you flowers and make me clean the house… it means nothing. If you come home and I unexpectedly have done all these things, and I present a wonderful dinner, kiss you and say "I love you," it means something. It is from the heart. God does not desire to control us or this world we have modified. He wants only what we give, from our hearts. Only then does it mean anything.

Q: Why did God create cancer, though?
A: Did God create cancer?
Q: Even if mankind did, why didn’t God stop it?
A: There comes a time when you have to let your children learn the hard way. I do not believe this is evil or that this indicates that the deity is evil. It indicates only that the deity is serious and trustworthy. The deity granted us the freedom to choose and to live as we will. The deity is not playing games, games like killing the prostitute before we can even get naked, saying "Ah ha! Caught ya!" Not evil, just desiring us to turn on our own.

Are we being tested? In some ways, everything is a test. We test each other, especially those in relationships. If, by "test" you mean "playing a game," then no. I do not believe God plays games. I do believe that the only test given is whether or not we will give ourselves to a higher purpose of our own free will.

Why must some people pay for the failings of others? Cause and effect. It is hoped that we learn something along the way, of course. Do not forget, good people… "good" and "bad" are not for us to judge. "Bad things happen to good people?" Bad things happen to people. We are imperfect and ever will be. The higher purpose is the only perfection, and that is why everything works towards its fruition. Even when we can’t see it. Even when we move away from it. Even when we strive against it.

I do not know all the answers. I know what I believe, and I am ever packed for the quest. For though I am just a people, I long for more. In fact, the rest of this litigious nation can call 1-800-LAWFIRM because they want their money faster. I accept that things happen, people pay, and there are reasons… and I am very patient.

Wendy tagged me with a book-themed meme:

1. Name one book that changed your life.

Fred Chappell’s It is Time, Lord. I first read this when I was 17 and was amazed at the way Chappell captured the language and atmosphere of the South. This book still has a profound affect on me.

2. Name one book you have read more than once.

I have read It is Time, Lord three times. I have also read Steinbeck’s Acts of King Arthur and His Noble Knights three times. I first read the latter when I was 15. I thought it was cool that Steinbeck wrote such a book and that no one seemed to know.

3. Name one book you would want on a desert island.

The Bible is the obvious choice for me, if for no other reason than it contains examples of almost every genre. Other reasons exist, though, of course.

4. Name one book that made you cry.

Good Hearts by Reynolds Price.

5. Name one book that made you laugh.

A Short History of a Small Place by T. R. Pearson made me laugh aloud and seek someone to whom to read it. How to Eat Fried Worms made me laugh. Johnathan Franzen’s The Corrections made me laugh (and almost cry) and inspired me to write.

6. Name one book you wish had been written.

What You Should Do in November 1999 should have been written.

7. Name one book you wish had never been written.

I love books, but if I have to choose one here… off the top of my head, I’d say Earth in the Balance.

8. Name one book you are currently reading.

John Marshall and the Heroic Age of the Supreme Court (Newmyer)
Chronicles: Volume One (Dylan)
Fire Sale (Paretsky)

9. Name one book you have been meaning to read.

Having read The Name of the Rose, I have been meaning to read Eco’s Foucault’s Pendulum.

10. Tag three more.

It’s up to you guys, but I’d be interested in reading how you respond.
I suggest that Lime, Shhhh, and Phain answer the questions.

In an effort to make the most of this life, I garden. I plan, read, replan, sketch. I rake the pinestraw, the leaves, the detritus. I add to the compost heap. I prune, edge, remove, plant. I fertilize, water, weed. I sit among the new growth and sleep or read. I stroll among the plants and flowers and vegetables and teach my children. I water and weed some more. I harvest. I ignore it all for awhile and allow nature to work beneath the fallow. I start again.

Through it all, I take time to play in the dirt, to explore new plants and flowers and and vegetables. I investigate the bugs and worms and butterflies and chameleons and lizards. I eat the vegetables. I make arrangements from some of the flowers. Often, I step into the backyard, pick up a shovel or rake, grab the wheelbarrow, and I garden - literally. More often, though, I am tilling the ground of the soul, strolling through fallow and growing and harvesting seasons, reveling in the new growth of spirit, contemplating, laughing, crying. For me, the two types of gardening are co-dependent - as symbiotic as my backyard ecosystem. I garden, therefore I am - if you will. Of course, I do enjoy the beergarden at the end of a day in the dirt.

~As you may can tell, I am in a place now that needs some extensive gardening.~