Estate Planning For Women (And the Men Who Love Them)

A fellow attorney (and award-winning journalist) Deborah Jacobs authored the book, “Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide”.  In her recent Forbes article titled “Estate Planning for Women (And the Men who Love Them)” she indicated the below question is a question every financially savvy woman should be able to answer. 

Question #4

Who would raise your children?

Few prospects are more wrenching than the possibility that young children will be orphaned. Often, parents put off writing a will because this particular thought is unbearable or couples cannot agree on a potential guardian. Some assume--incorrectly--that it is enough just to ask a relative or trusted friend to step in if the need arises.

But not formalizing the arrangements and doing some estate planning along the way could leave your children in a vacuum. For example, let's say you are a single or surviving parent--in this group too, women predominate. If you do not have a written document outlining your wishes, a court usually decides who will fill your shoes. A custody battle might erupt or, awful as it sounds, no one may want your children. And without financial planning, there may not be enough money for your child's support.

When choosing a guardian, people typically look first to relatives, starting with their own siblings--the child's aunts and uncles. A second choice for some people is their own parents, if they are young enough. Even if certain family members seem like obvious candidates, take into account all the factors involved. Key questions to ask: Am I comfortable with the individual's lifestyle and values? Would my child have to relocate? Can the prospective guardian incorporate my children into his or her household? If I have more than one child, would the guardian be able to keep them together? Does my child already have a relationship and a good rapport with the person?

Here too, you can build in checks and balances--by putting a different person in charge of the money you leave for your child's support. You can name a guardian for the funds, or put them into a trust and designate a trustee to spend the money on your child's behalf. While financial guardianships are a matter of state law and require court supervision in some states, trusts are a private matter. A trust also gives you much more say over how the money is spent.

Questions like this one can often trigger even more questions in your mind.  Please accept my invitation to schedule a meeting where we can discuss this topic and others that might be relevant to your estate planning.  Give my office a call to set a meeting.

 

Enjoy a public domain Christmas

'Tis the season to be jolly. That familiar line actually comes from a song titled, “Deck the Halls,” which you have no doubt sung a hundred times, as I have too. Just the mention of the name gets the tune running through my head. And why not? It's a holiday staple that plays on radio, television, and in elevators all over the world during this time of year.

Of course, there's a reason “Deck the Halls,” is so popular. It's in the public domain. Because of its status as a song in the public domain there is no royalty to pay for singing it, or recording your kids singing it and posting it to YouTube, or breaking out into a chorus of it while you're being interviewed on national television.

You see songs are intellectual property. They are owned by somebody. Or at least a lot of them are. And many of those song owners (people like Sting, Paul McCartney, Lady Gaga, or Adele) earn their living by collecting royalties for the songs they wrote. Each time someone plays their song on a jukebox, or on the radio, or sings it on a show – the writer collects a royalty payment.

At least that is the way it is supposed to work. In many cases people use their favorite songs as soundtracks to homemade videos of their wedding, or of their children opening Christmas presents, or of dad shoveling snow from the driveway – without realizing they are actually stealing something of value.

It's a little like the story of Napster, but on a smaller scale.

That brings us back to “Deck the Halls.” You see, “Deck the Halls,” was written a long, long time ago. So long ago in fact that there is no copyright on it. Which is what makes “Deck the Halls” a song that resides in the public domain. Nobody owns it now, so you can sing it with impunity without risk of the owner demanding payment – even if you sing it on television in front of millions of people, or on the stage at New York's Radio City Music Hall in front of a sold out audience (and good for you if you get that chance).

The catch to all this is that you have to perform the song, or someone you know has to be singing. It has to be an original performance, not a previously released recording of someone else. You see, if you use a recording of your family singing the song, you should be in good shape. But if you use a recording of Old Blue Eyes singing a Christmas classic, that's something else entirely. You see, the song may be in the public domain, but the recording of the song may not be. In that case it is the performance that is copyrighted, not the song itself.

Basically, “Deck the Halls,” is in the public domain, but a recording of Frank Sinatra, or Tony Bennett singing it wouldn't be.

So go ahead and have a festive, song-filled holiday season. Enjoy yourself and the warmth of your family and friends. You can sing to your hearts content and even share the recordings you make of some of those songs. But before you post your revelry to the Internet, you might want to check to be sure the song you're singing is in the public domain, rather than one that has a valid copyright that's owned, and potentially being enforced by the owner.

Nobody wants to have a joyous, festive Christmas followed by a miserable, litigation filled New Year. Certainly, not you.

Government Cuts Affect Nursing Homes

One of my WealthCounsel colleagues posted a comment on the potential for concern about nursing home care levels.  Lizette Sundvick targets this concern that appeared in this article: “Medicare Cuts Could Up Nursing Home Costs” SmartMoney.

Nursing home residents may soon face higher costs and reduced services, as planned Medicare spending cuts take effect this fall. 

The last few months have been a wild ride on multiple levels, to include concerns over Medicare and the “debt crisis.” While many more challenges lie ahead in terms of budget cuts, some cuts already have been made under the radar screen. Several you should know about actually go into effect this fall, as reported in a recent SmartMoney article.

According to SmartMoney, nursing home residents could face higher costs or reduced care once these cuts kick in.

Background

On July 29, The Centers for Medicare and Medicaid Services (CMS) decided and announced that they would be compensating for last year’s $4 billion shortfall by cutting reimbursement rates to nursing homes by 11.1%. In real terms, the shortfall is going to reduce government reimbursements to nursing homes. In 2010, nursing homes increased charges on residents by an average of 5%. Bad news: These reduced government reimbursements likely will trigger even higher nursing home costs for residents beginning this fall. Alternatively, it might trigger a reduction in services to nursing home residents. Either way, the forecast is not pleasant.

Perhaps I am wrong. Perhaps nursing home residents won’t see increases in costs or decreases in services. After all, the CMS actually justifies the 11.1% cut by pointing out that it is simply a more accurate reimbursement amount based on a government report indicating that Medicare has been overpaying. In fact, a spokesperson for the CMS maintains, “We do not believe that nursing homes will respond to the payment changes by decreasing the quality of care furnished to patients. However, we intend to carefully monitor changes in utilization and staffing patterns to ensure that patients continue to receive high quality care.”

Still, the nursing home industry appears to be monitoring the situation with caution. Bottom line: If you have a loved one in a nursing home, then you, too, should take notice.  Keeping abreast of current economic changes keeps you prepared for changes you may need to make on behalf of your loved one.  

The potential for drastic changes in long term care environment serve as reminders that our power of attorney and healthcare directives need to be up-to-date and relevant.  If you want assurance that your plans are up-to-date, then let’s get a meeting scheduled to review your plans.

 

Estate Planning For Women (And the Men Who Love Them)

A fellow attorney (and award-winning journalist) Deborah Jacobs authored the book, “Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide”.  In her recent Forbes article titled “Estate Planning for Women (And the Men who Love Them)” she indicated the below question is a question every financially savvy woman should be able to answer. 

Question #3

Whom can you trust?

Advancements in medical science and care may enable us to live fuller, longer lives. But that also means more women are likely to suffer from a diminished mental state--a harsh reality that's difficult to accept. In case that happens, you should have a durable power of attorney, appointing a family member, friend or adviser as an agent to act on your behalf in financial and legal matters. Also make sure you have a health-care proxy, a separate document that authorizes an agent to make medical decisions on your behalf.

Choose carefully: A power of attorney, though necessary for all of us, is unfortunately also a license to steal. The best person to put in charge is a close family member--preferably one who lives nearby. Most financial advisers do not want this responsibility, nor is it cost effective to pay their hourly fee to handle routine tasks like paying bills. Naming joint agents, which is allowed only in some states, is one way to provide checks and balances. Or you can appoint another person, like an attorney, an accountant or a family friend, to supervise the arrangement. Before selecting an agent, it is important to determine whether that person is willing to take on the duties.

If you're nervous about giving the signed document to your designated agent right away, you could leave it with your lawyer with instructions on when to turn it over. In that case, remember to tell your agent whom to contact.

Or, instead of making the power of attorney effective from the moment you sign it, you can specify that it be activated by a specific event, for instance, if you become incompetent. The problem with this approach, known as a springing power, is that someone must decide when you have reached that state. Traditionally, this has required a medical opinion.

Questions like this one can often trigger even more questions in your mind.  Please accept my invitation to schedule a meeting where we can discuss this topic and others that might be relevant to your estate planning.  Give my office a call to set a meeting.

 

Medicare information is easier to find than ever

Medicare is a term well known to Americans. What it is, exactly, is less well known. And the big question of who qualifies for Medicare and what that means leaves many of us out in the cold.

Here's the good news. The days are over when your best avenue of research on the topic involved searching for educational pamphlets in public buildings, waiting to see a news report that explained a few details, or asking friends and family to give you their best guess. Thanks to the convenience of the Internet you can find good, solid information about this country's great social insurance program twenty-four hours a day. If you've got questions, you very well may find the answers you're looking for at a website with the easy to remember address of; Medicare.gov.

Under some circumstances the information you find on the website may lead to more questions than answers. But that's actually good. Because when you're armed with educated questions, your odds of finding educated and accurate answers go way up.

One of the more important pieces of information you will find at the U.S. Government's Medicare information portal these days is the news that Medicare open enrollment runs from October 15 – December 7, 2011. Whether you determine it's best to join, or drop coverage, or switch your health or drug coverage – this is the time to do it, and this is a great place for you to start your search for information about the available options.

Health care is a critical need. Going along with that need is the realization that our health care solutions have to be affordable for us to make the most of them. With that in mind, I hope you will make good use of this free resource that can help you make your selections, or at least help you determine which aspects of Medicare you would like to be more aware of.

Don't fall prey to the 2011 "Dirty Dozen" tax scams

The IRS has identified the "Dirty Dozen" tax scams of 2011.  Participating in or falling victim to them can result in real harm to your pocketbook and your freedom.  My WealthCounsel colleague, Scott Makuakane, practices in Hawaii and he recently posted five of the Dirty Dozen.  He noted that he did not list them in any particular ranking of "dirtiness":

Hiding income offshore

People used to be able to get away with this because of the IRS' former inability to track offshore accounts.  Things have changed, and penalties have been increased.  Any tax strategy that requires secrecy as an element for success is highly suspect and probably should be avoided. 

Identity theft and "phishing"

It is absolutely critical to protect  your personal information.  All an identity thief needs are your name, birthdate, and social security number to make your life a living hell.  Watch out whenever anyone asks for those bits of information, and protect yourself by shredding documents that may contain sensitive information about you before you discard them.  Also beware that identity thieves are out there trying to gather your personal information any way they can--through email, by posing as government personnel, by spyware programs that can steal passwords from your computer, and a variety of other nefarious means.

Return preparer fraud

Be careful who you trust with preparing your returns.  If you have a fairly complicated return, it would behoove you to work with a CPA.  In any event, be sure to work with trustworthy professionals in whatever you do.

False or misleading forms

Some folks claim refunds to which they know they are not entitled.  Obvious no-no.  Don't file a return that does not pass the smell test.

Frivolous arguments

People sometimes make the darndest arguments.  Here is one that will land you in the pokey.  Premise 1:  there are ample declarations by the IRS in a variety of publications that our income tax system is "voluntary."  Premise 2:  I have the right to opt out of any "voluntary" income tax system.  Conclusion:  by golly, I will opt out of the U.S. income tax system and there is nothing anybody can do to me if I do. 

Please don't get caught up in any "strategy" that would seem to enable you to evade taxes.  Tax avoidance or minimization through recognized legitimate means (such as deductions for charitable contributions and mortgage interest) is good stewardship.  Tax evasion is a crime, and it will eventually catch up with you.

You can check out the rest of the "Dirty Dozen" on the IRS website.  For some information on legitimate approaches to estate planning, please contact me and we discuss the legal path offering confidence in your estate planning.

The marriage fizzles, but the television show is a hit!

Was it real, or was it entertainment? Britain's Daily Mail is running a story about the Kim Kardashian/Kris Humphries marriage that lasted only 72 days. The story asks that very question. Was it love, or was it a hoax? Could this have been a real marriage, or just a staged wedding intended to pull in a huge and hugely lucrative audience?

Humphries, a professional basketball player who is currently idled by the NBA lockout, arguably gained more fame and notoriety as the suitor of a highly visible reality television star than he ever did on the court. Kardashian, for her part, boosted the ratings of her family's personality driven entertainment empire to stratospheric levels as the fledgling romance, engagement, and ultimate marriage tantalized viewers and drew them in by the hundreds of thousands.

The two met, ironically enough, exactly one year before the divorce papers were filed. That timeline certainly meets the definition of a whirlwind romance. The discussion around water coolers and executive suites isn't about romance or broken hearts, or infidelities, however. It's about money. And it is that exact issue that has casual viewers and professional celebrity watchers alike wondering, was this ever a real romance in the first place, or was this just business?

Reports suggest that a prenuptial agreement will keep either side from flirting with poverty over the split. But the $10 million dollar televised wedding turned out to be an investment that worked beautifully on the professional level, while it was simultaneously a complete bust on the personal side.

Make no mistake, there are real people involved in this situation, and it's entirely possible that there are seriously hurt feelings that are leading to legitimate emotional pain as the story unfolds. But there are many, many dollars at stake, too. There is a television series in the mix, at the very least – which the Daily Mail report suggests has led the network to engage in emergency meetings, where one can only assume that damage control is the primary focus of the discussion, while questions on how to exploit the unexpected twist of events to their entertainment oriented advantage comes in a close second.

Whatever the case, whether it was love and loss, or ratings and bigger ratings – this story isn't going away any time soon. And neither are Kris or Kim.

You can read the full Daily Mail story here.

Earnings don't necessarily end when we do

For most of us the ability to create wealth ends at pretty much the same time our life does. That's not true for everyone, however. Consider the case of Michael Jackson. Although MJ died in 2009, his name, face, and voice continue to reap financial rewards that would stagger the average wage earner. He's not alone either. Forbes is running a story on their online edition that ranks their “Top-Earning Dead Celebrities,” in a listing that is curious to say the least.

Jackson is in the lead with estimated earnings of $170 million this year. Admittedly, that number is down roughly $100 million from last year, but it's still enough to get the attention of anyone who was wondering how they might provide for their family's financial stability after they're gone.

Elvis is still doing well, with a reported $55 million earned in 2011, more than three decades after his death. Even Marilyn Monroe makes the Forbes list with an impressive $27 million nearly fifty years after she departed the scene. And lest you think it is just the beautiful people who have long term earning potential, let's keep in mind that Albert Einstein is still pulling down a very respectable $10 million through licensing agreements that touch everything from children's educational products to eye glasses, and even video games.

The big story for the rest of us, the folks who are never invited to Hollywood parties and have so far managed to avoid a single embarrassing episode with paparazzi or TMZ reporters, our income doesn't necessarily have to stop when our heart does. Many of us own property, intellectual or otherwise, that may well have value after our time on earth is up.

Whether you're in that group or not is anyone's guess. Remember, Emily Dickinson only became a successful poet posthumously, and Vincent van Gogh sold only one painting in his entire life. Even Edgar Allan Poe was only a very modest success in life, although his work has become a staple of high school and college literature classes in our time.

None of them were voted, “Most Likely to Succeed,” in high school.

So don't despair if you haven't yet realized your dream of creating the world's hottest dance album, or writing the great American novel, crafting a classic statue that will last for centuries, or creating an indispensable computer program. Your day may come, and your big payday may follow by enough time that you never personally see the financial benefits of your efforts – but your heirs may.

In the big scheme of things that might not be such a bad thing. It's an interesting idea, in any case.

Good luck to you. You can read the full Forbes piece here:http://www.forbes.com/sites/dorothypomerantz/2011/10/25/the-top-earning-dead-celebrities/

Estate Planning For Women (And the Men Who Love Them) Question #2

A fellow attorney (and award-winning journalist) Deborah Jacobs authored the book, “Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide”.  In her recent Forbes article titled “Estate Planning for Women (And the Men who Love Them)” she indicated the below question is a question every financially savvy woman should be able to answer. 

 

Question #2

Is there money in the bank?

In the process of dividing assets into "yours," "mine" and "ours," couples should make sure there is enough money to cover immediate expenses if one of them suddenly passes away. These reserve funds can be held in each of your separate accounts or in a joint one. Just be aware that when you die, your spouse or partner will probably not have access to your individual account right away, and you will each need the discipline to keep the fund flush. A better approach is to maintain a joint account designated for emergencies that can also be available for this purpose.

With bank and brokerage accounts, the most frequent form of joint ownership is joint tenancy with rights of survivorship. It is available to any two people who want to own assets together. Both owners have access to the assets during life, and when one joint tenant dies, the survivor immediately becomes the sole owner of the whole property, regardless of what the will says, or whether there is a will. These features make this type of ownership appealing both to spouses and other couples.

Despite these advantages, joint tenancy has a serious drawback: it exposes each owner to the other's potential liabilities. Unmarried couples also need to be aware that state laws on joint tenancy for non-spouses may vary. Consult a lawyer who is familiar with the rules of the state where you live.

Questions like this one can often trigger even more questions in your mind.  Please accept my invitation to schedule a meeting where we can discuss this topic and others that might be relevant to your estate planning.  Give my office a call to set a meeting.

The Mills Brothers standard comes true - unfortunately

In 1944 The Mills Brothers had a hit with, “You Always Hurt the One You Love.” Written by Allan Roberts and Doris Fisher, the standard has been covered by everyone from Connie Francis, to one of today's major heartthrobs, Ryan Gosling.

It turns out that the sentiment of that song is true. Mickey Rooney knows it first hand.

While the Mills Brothers were singing, Mickey Rooney was acting. As a top movie star of the WWII era, Mickey was known for his work as Andy Hardy in a series of films, as well as in critically acclaimed movies like, “Boys Town.”

Ultimately celebrities are more or less the same as everyone else, however. A fact that Rooney came to find was all too real in his elder years. At 90 years of age the Hollywood institution found himself testifying in front of the Senate Special Committee on Aging. It seems that like so many elderly men and women who had worked hard and saved for their golden years, Mickey Rooney was victimized financially by a relative whom he had trusted.

Rooney didn't name the relative in his testimony. He made it clear that his money was taken, however. His financial affairs were kept from him, and his funds were misused. Mickey Rooney, a man who had once been on top of the world as a celebrated star of the silver screen, was now feeling the painful reality that can occur when we find ourselves being vulnerable to the whims of others. The hurt is deeper when we know that the people causing us harm a members of our own family.

Life presents us with risk, but it presents us with controls for those risks, too. It's important that we have an understanding of our finances and our options throughout our lives. As we move into our elder years, it is increasingly critical that we make arrangements for our care and comfort that we can count on.

The Government Accountability Office issued a report recently that claimed as many as 14 percent of non-institutionalized older adults had experienced some form of elder abuse in 2009. That statistic is alarming today, and of great concern for tomorrow, considering that the population of older American's is expected to grow substantially over the coming years.

Value is a moving target in a down economy

For many of us the American dream included growing up, finding a stable job, and buying a home of our own. Generations of men and women put their faith and their savings into home ownership with the unshakable belief that real estate goes up in value over time – no matter what.

That belief system has been shaken badly in recent years. Many of us find ourselves paying mortgages that have a greater value than the buildings they're financing. Most of us muddle through and hope for the best. Others move on, leaving the buildings without tenants, inhabitants, or regular maintenance.

When that happens the bank will eventually foreclose on the building, assuming a mortgage is owed. Foreclosure can be devastating to a family, but it's no picnic for the bank either. Now saddled with the costs of maintenance, property taxes, insurance, commissions to real estate brokers and even local code violations as the property sits empty and idle – the bank's are looking for a way out from under the burden of supporting properties they never intended to own.

Brady Dennis has a story running in The Washington Post this morning, that details this exact situation. He focuses on Cleveland, Ohio because they are not only hard-hit by abandoned properties and a plunging real estate market – they're doing something about it.

Bank of America, Wells Fargo, and J.P. Morgan Chase are literally giving away abandoned properties in Cuyahoga County so they can get the properties off their books. Ownership is being transferred to the Cuyahoga County Land Reutilization Corp, which has set up land banks with the specific aim of acquiring these properties so they can be put to a better use.

That raises the question, of course, “What exactly is a better use?”

That fair question deserves a fair answer, although it would seem likely that the discussion will be long and fraught with twists and turns and differences of opinion that could go on for years. It's an interesting development in any case. It brings a new perspective to the old sales adage, “Our loss is your gain.”

It seems sometimes as if we are all losing in this deal, at least to some degree. Let's hope that the light at the end of the tunnel gets brighter soon, and while we're at it let's hope that the tunnel gets shorter, too.

You can read Brady Dennis' story here. It's worth a peek.

Potential Portability Problems

Portability has become a popular topic among the estate planning set, and I found this recent post to be valuable.  The author of the commentary is Lizette Sundvick, who practices in the sate of Nevada.  And her comments are based on the article  “Wealthy Take Estate-Tax Exemptions Beyond Grave Until 2013”  Bloomberg (8-6-11)

The Bloomberg article notes that:  Wealthy individuals in the U.S. will find it easier to cut their estate-tax bill as a result of a provision for using their deceased spouses’ exemption credit.

Much ado has been made about this new power in estate planning known as “portability,” and for good reason. Nevertheless, it’s also prudent never to put all your eggs in one basket. So it is with the matter of estate tax exemption portability.

As you may know, “portability” is the new ability for a deceased spouse to transfer their unused gift and estate tax exemption amount to their surviving spouse. Provided all the required paperwork is timely filed with the IRS, that effectively allows a married couple to exempt an astounding $10 million from federal taxes for their loved ones without the use of trusts or legal devices.

Bloomberg suggests that it is better to think of portability as a “safety valve” for married couples, especially those whose assets would be entirely covered by the doubled exemption, but not something to be relied upon. The biggest limitation, for one, is that portability exists at the whim of lawmakers. After the budget showdown last December, existence of portability is only guaranteed until the end of 2012 (if that, Congress being the politically fickle animal that it is).

But there is another important caveat Bloomberg touches upon that is worth mentioning. Portability is a power that exists between spouses, but in a world of shifting marriages, divorces, and remarriages that also creates strange limitations. Portability only applies to the last deceased spouse. Accordingly, if a widow remarries, then they could potentially lose that massive exemption (even after their own estate has doubled, creating an estate tax liability). Indeed, if portability isn’t lost and if the widow’s new spouse predeceases after using their own exemption by gifting, then the widow’s estate is in the same tricky situation.

We all know (or should know) that relying on fickle politics is addressing the temporary.  On the other hand, we encourage you to investigate every opportunity that arises for your use here and now.

Portability can be a worthwhile tool to consider.  On the other hand it can be a daunting issue to incorporate into your long-term estate tax plans.  As these new planning tools surface, it is advisable to make sure your estate plan is up-to-date and fully addresses your desires regardless of what "portability "may or may not offer.  Please call to schedule a meeting. 

 

The beat really does go on

In the 1960s Sonny Bono made a name for himself as a songwriter before going on to make up half of the duo known as Sonny and Cher. One of the hits Sonny wrote was titled, The Beat Goes On. That sentiment is proving to be true in so many ways.

Sonny left the music business in the 1980s to run for and win the mayoral race in Palm Springs, California. His next step up the political ladder was to the US Congress where he represented California's 44th congressional district. To this day Bono remains the only member of Congress to have charted a number 1 hit song.

He may be the only high ranking political name to have a storied musical past, but Bono wasn't the only one to have a love of music in his heart. The kids who flocked to Woodstock are all grown now, in their 60s, and in many cases they are captains of industry and pillars of their communities, yet they still remember the songs that made an impression on them as young men and women.

Consider the example of former chief justice William Rehnquist, who in a 1980 case cited one of his favorite songwriting teams, Gilbert and Sullivan. The next chief justice, and Rehnquist's replacement, John Roberts has cited Bob Dylan and Jimi Hendrix in cases involving AT&T and recopyright law, respectively.

Dylan and Hendrix aren't alone in the history of judicial citations, however. Paul Simon is also included, as are others from the hey day of rock music's not-so-distant past.

Judges are people, too.

If we were able to hit the rewind button on time and revisit our youth we might be surprised to find that at least some of the young people singing and dancing in the crowd around us at those concerts we attended would go on to be the lawyers, judges, and justices of our future. That includes current supreme court justice Samuel Alito, who is on record as being not only a fan of Bruce Springsteen, but he also attended a ska music festival at one time. Ska, for those who are uninitiated, is an adaptation of Jamaican music that ultimately led to the reggae sounds of the 1980s.

They may be grey and balding and sitting on the bench today, but under those flowing robes and dignified demeanors there is still the glowing ember of a younger individual who is not the least bit afraid to stand up tall and shout out, “Play Freebird,” at the top of their lungs. Let's hope that never happens in a courtroom, however. That sort of an outburst would not lend itself to the level of decorum that judges and court staffers generally aspire to.

The Fiddler on the Roof Effect

Most American's live paycheck to paycheck. In 2010 the Kansas City Business Journal reported that as many as seventy-seven percent of American's are stuck in that rut. So if you're waiting for payday before you can go to the grocery store again, you can gain some comfort from knowing that you're not alone.

It stands to reason then that most American's are of the belief that they will never fall into the category we think of as being, “wealthy.”

There's the rub. Because lottery tickets fly off the shelves of your local store at a dizzying pace, and while you may not have hit that big number yet – somebody has. In fact, somebody becomes a lottery millionaire on an astoundingly frequent basis. More than 40 states allow lottery's within their borders, which means that almost every state is producing multiple millionaires each year.

I'll call this the Fiddler on the Roof Effect. Like Tevye, most of us dream of our own personal rags to riches story. “If I were a rich man,” was a hit for a reason. It appeals to our fantasies, and for at least a few of us, it actually happens.

Surprisingly enough, waking up one morning to find you have a whopper of a bank account balance is not always a good thing. Not on a personal level, anyway. While we may wish for riches, most of us don't have a very good handle on how we would deal with a sudden, massive infusion of cash. Whether it comes from a lottery win, a lucky trip to Las Vegas, or being the last contestant standing on a reality television show, handling your money well is a whole lot harder than most people think.

Remember Richard Hatch, the million dollar winner from the first season of, Survivor? Tax troubles introduced Mr. Hatch to a less than first-class tour of prison facilities in Massachusetts, Oklahoma, and West Virginia.

Imagine! You can go from rags, to riches, to prison, all based on good luck, bad luck, and a lack of good financial planning. It's happened before and it will almost certainly happen again.

Might there be a hit song someday called, “I wish I hadn't won that,” taken from an alternate version of Fiddler on the Roof? Maybe. Let's just hope you get the help you need, should you ever be so lucky to be holding a winning ticket.

Big numbers big problem

In September of 2010 the General Accounting Office issued a study that warned about the continuing problem of guardians taking advantage of the elderly they are responsible for protecting. It's an old story. Grandma or grandpa becomes feeble with age, they put their trust in a relative, or a friend, or a professional who they choose to rely on for their well being for the remainder of their lives – and the decision turns out to be a bad one.

Their health, their finances, and their peace-of-mind are all vulnerable, and where the is vulnerability, there are opportunists. When the relationship goes bad, the result can be tragic.

Guardianship and conservatorship are not legal relationships most of us put much thought into as we go through the day-to-day activities of our lives. Truthfully, most people have no real understanding of the benefits or risks of either option. Yet with an increasingly gray haired population, the issue of who we will turn to in our old age is becoming more important, and of greater interest, to a broader segment of our society every year.

Speaking of years, current estimates suggest that by 2030 there will be more than seventy million American's who are sixty-five years old, or older. Although many of us may be counting on a vibrant and healthy retirement that lasts for decades, that will not be the case for all of us. That reality has legal professionals, state legislators, and individuals increasingly wary, and worried about what harm may befall the elderly who rely on others to care for them in their golden years.

How you deal with your own future, or that of your parents, or in-laws, is a deeply personal decision. As time marches on and those decisions become more pressing, it is good to know that you are not all alone. There is help available. But there is risk, too. So often, that is the double-edged sword of life.

For an interesting look at how South Carolina is struggling with this issue, you can read Doug Pardue's story from the Post and Courier, published last year.

Estate Planning For Women (And the Men Who Love Them)

While important to both sexes, estate planning often affects women more profoundly. Women live longer on average and tend to marry older spouses, making them three times as likely as men to be widowed at 65. So for women, estate planning is a crucial part of retirement planning. And since they usually survive their spouses, women more often have the last word about how much wealth goes to family, charity or the taxman.

A fellow attorney (and award winning journalist) Deborah Jacobs recently authored an article in Forbes titled “Estate Planning for Women (And the Men who Love Them)” she indicated the below question is one every financially savvy woman should be able to answer. 

Question #1  

What key deadlines apply when a spouse dies?

Starting in 2011, a surviving spouse can add any unused estate tax exclusion of the just deceased spouse to her own $5 million exclusion--this is called portability. So a widow can pass on as much as $10 million, untaxed, through either lifetime gifts or her will. But portability is not automatic. To get it, the executor of the estate of the first spouse to die must file an estate tax return, even if no tax is due. Surviving spouses should see to it that the form is filed even if they have nowhere near $5 million of their own, because who knows what the future holds?

Nine months is also the deadline if you plan to disclaim (turn down) any portion of what you inherited from a spouse so that it can go directly to your children or other family members or into a trust for their benefit. The new tax law makes it more likely that spouses will leave everything to each other outright. Other couples may want to give the survivor the right to disclaim at least some money and have it go into a family trust or bypass trust, as it is also called.  This allows the survivor to make an informed decision based on her own financial resources and federal and state estate laws at that time. If you want to use this postmortem tax planning strategy, you need to keep an eye on the calendar.

Questions like this one can often trigger even more questions in your mind.  Please accept my invitation to schedule a meeting where we can discuss this topic and others that might be relevant to your estate planning.  Give my office a call to set a meeting.

 

Fuzzy math and big money go to court

How would you like it if a book that suggested you were worth somewhere in the neighborhood of $150 million to $250 million, hit the sales racks? Most of us would be flattered, or entertained, I suspect. Many of us would be left scratching our heads wondering how the figures got so inflated. But if you're Donald Trump and the book is about you, and your public position is that you're net worth is north of $7 billion, you just might be miffed. In fact, you might sue.

When the dollar values get this big, it can be quite a process to get to the bottom line and establish a real value of the exact wealth in question. There's no surprise there. But mix in some emotion, maybe a little bruised ego, and a potentially incendiary book title, and things can get litigious in a hurry.

The Wall Street Journal's blog page explains the particulars of this case reasonably well. You might want to take a peek at the post titled, “Donald Trump Loses Lawsuit Appeal.” It's a fair bet that Mr. Trump was no more excited about that headline than he was the original suggestion that his wealth was substantially less than he'd preferred the public assume it to be. But there you have it. Being a celebrity isn't all caviar and champagne.

Amy Winehouse got her will right

This commentary is taken from an article authored by Karen Datko in MSN Money on July 27, 2011.  It gets right to the core of a will and its potential importance for your estate. I wanted to share this with you.

The late soulstress reportedly wrote a will that excluded her ne'er-do-well ex-husband.

The late Amy Winehouse was many things to many folks -- fabulous talent, an inspiration to Lady Gaga, an addict who couldn't quite shed her demons all come to mind. Add to that list: wise estate planner.

Winehouse's revised will reportedly prevents any of her fortune, estimated at $16 million and most assuredly growing, from going to her ex-husband, Blake Fielder-Civil, widely regarded as the person who introduced her to hard drugs. Instead, her millions will be divided among her father, Mitch; mother, Janis; and older brother, Alex.

 "Let this be a lesson to both the famous and the obscure: A will is a good idea at any adult age," Ron Dicker wrote at DailyFinance.

Fielder-Civil, now serving a sentence for burglary and possession of an imitation firearm, might have inherited everything had Winehouse not put a new will in place. Tim Worstall wrote at Forbes:

However, the one thing, under English law, that divorce does not do is undo the presumption that the natural inheritor is the spouse. In the absence of a will the surviving spouse will inherit at least the bulk of any estate.

Even in the presence of a will written pre-marriage which states otherwise the surviving spouse, or ex-spouse, will again be the natural inheritor.

How would it work in the United States? It varies from state to state, but generally if you die intestate, your estate will go to spouse and kids, or parents or siblings if you are single and don't have children.

 Do you have a will? There's a good possibility you don't, even if you're well past 27. "According to an AARP survey, more than one third of Americans over 50 lack a will, living trust, or power of attorney," Kimberly Palmer wrote at U.S. News & World Report.

If you're a parent of minor children, consider yourself negligent if you don't have one. Liz Weston of MSN Money wrote: "No matter how icky you feel about planning for your own demise, you owe it to your kids to spare them the potentially ugly and drawn-out custody battle that could ensue if you don't make these decisions now."

Whether you are older than 27 or younger than 27, it may be worth meeting to discuss a will.  After all, it was a very smart move by Amy Winehouse and it could be equally beneficial to you. I’m available to schedule a meeting.

 

Behave yourself, or else

Anyone who has seen a legal drama on television, from a classic like Perry Mason to one of the new generation, such as Suits, knows that the spectre of disbarment is a guaranteed method of grabbing a lawyer's attention. The audience seems to become more interested in the story when something important hangs in the balance, too.

That risk of punitive action isn't an idle threat, either. Everyone who works in the legal profession is aware that there can be serious consequences for not maintaining a certain level of decorum in the courtroom, or for acting up in a public place.

Anthony Peters, a former Catoosa County Magistrate from Georgia knows this all too well. As reported in the Rome News-Tribune this week, Peters was removed from the bench, and barred from ever holding a judicial office in the state again.

Sometimes, truth really is stranger than fiction.

It could have been worse

Irene came to town last week and has left a lasting impression on hundreds of thousands in the process. No, this wasn't the famed actress, Irene Dunne. Accomplished and heralded as she was, Irene Dunne has gone the way of her contemporaries and is no longer with us. Similarly, Irene Cara the singer and actress who skyrocketed to fame with, ironically enough, a part in the movie, “Fame,” has faded from the spotlight. Her work is no longer in heavy rotation on the radio, or on HBO. This was another Irene. One that will be remembered for many years to come, I have no doubt.

Hurricane Irene gave North Carolinians, Virginians, Delawarians, New Jerseyans, New Yorkers, and New Englanders a rough time. Like our family and friends in Florida, Louisiana, and Texas, we are now personally acquainted with the realities of life in hurricane alley. The wind, the rain, the flooding, the loss of electrical power, mass transit systems being shut down, and even the inability to simply run out to simply grab a paper, or a cup of coffee, or a pancake breakfast all become spectacularly clear when it happens to you, personally.

With all the pain and suffering this story caused us, and the monumental expense of the clean up and repairs, it's worth remembering this – as hurricanes go, Irene was a weakling. Sure, she was big. From edge to edge the storm covered hundreds of miles. But when she came ashore in New York City she had weakened to very nearly tropical storm strength. Wind speeds of 74 miles per hour or more constitute a hurricane. Irene's winds were clocked at 75, just one mile per hour above the minimum standard.

That fact doesn't belittle the pain and suffering a storm of this size brings with it. And it certainly won't bring back any of the poor unfortunate men, women, and children who lost their lives to Irene. But it does give us some context to consider when the next storm marches across the Atlantic and takes aim at Puerto Rico, the Bahamas, Florida, or any other landmass that is populated by people who are very much like us.

Hurricane Andrew came ashore in southern Florida in 1992 with winds 100 miles per hour faster than Irene brought us. It wiped entire towns off the map as it moved over land. Hurricane Charlie zigged when it was expected to zag, and carried 150 mile per hour winds right into the heart of the Sunshine State. While Katrina matched Andrew's wind speed, even as it approximated Irene's size. The the detriment of the Gulf Coast.

The moral of the story is, we are not alone. Many of us, from Texas to the east, from Florida to the north, have experienced savage storms that have done considerable damage and caused millions of us us tremendous inconvenience. But as cliché as it may sound, it could have been worse for those of us who personally experienced, Irene.

Perhaps that is the silver lining to this big, black cloud, that has thankfully died of natural causes as it meandered north toward Canada only days ago. It really could have been worse – for so many of us.

Uncovering Dementia and Alzheimer's Cover-ups

One of my estate planning colleagues, Lizette Sundvick, who practices in Nevada recently penned this comment on dementia cover-ups.  Her post occurred after reading this “The Danger of Your Aging Parent Covering Up Dementia” article in Forbes (August 11, 2011)

Here’s what’s important: it doesn’t matter if you have a diagnosis for your aging parent or not. It matters how your aging parent functions. It matters how you deal with what you see.

Dementia and Alzheimer’s are becoming increasingly common, but even if we are beginning to become more and more aware of how to spot them, it doesn’t make it any easier. Many a reader will be familiar with the terrible uncertainty and concern over their elderly parent’s thinking. Fortunately, Carolyn Rosenblatt of Forbes has more advice to give in her recent article.

Among the many dangers to keep in mind when an elderly loved one starts “slipping” is that they may begin “hiding” it. For one thing, it is not something with which any senior looks forward to acknowledging, even if they are aware of some telltale symptoms. It is human nature.

We all compensate or distract when there is something to hide, both from ourselves and from others. But when something like Alzheimer’s is at stake, it can be all the more difficult to get past, and it is harmful to hide. Indeed, since there is no actual test for dementia or Alzheimer’s, it is possible that a doctor will be unable to diagnose those conditions.

It is important, therefore, to observe how your loved one functions. Keep a keen eye on them and know what you are seeing, for their own sake. The original article has more advice and anecdotes to offer, but Ms. Rosenblatt sums up the steps in four points. As soon as you begin to worry you must, first, persuade your loved one to visit a doctor, and a specialist if possible, to detect it early. Second, you must secure their estate planning documents while they have legal capacity to know and understand what they are doing. Third, you must secure proper care for them. Fourth and last, you have to discuss the circumstances openly with all family members, so all may be aware of the circumstances and can work together to protect your loved one.

Good estate planning should take into consideration the healthcare and power of attorney documents needed to insure a smoother transition for proper care in this type of situation.  As articles, like this one in Forbes, raise our awareness of the growing painfulness of dementia and Alzheimer’s, you or your loved one may want to update your existing plan or design a new plan.  We can help.  Our office is available to take your call to schedule an appointment. 

 

The courtroom on television, and in real life

As the fictional lawyer gets up to defend his client in a bankruptcy case, his glib and casual nature might catch the eye of the audience at home. He might be a darling of the fanzines and even have a growing list of Facebook Friends and Twitter followers who hang on every new communication, no matter how mundane.

The fictional character may snap at the opposing council, ridicule the bailiff, and perhaps even poke fun at the judge. It all looks good on television. It drew audiences in droves back in 1979 when Al Pacino played the idealistic lawyer, Arthur Kirkland in the film, And Justice For All. Arthur, a defense attorney, famously screamed at the judge in court, “You're out of order. You're out of order. The whole trial is out of order.”

Of course in the movies that works out. Popcorn and chocolate covered raisins are eaten, soda is consumed in massive ice laden cups, and everyone goes home entertained and happy.

That's not so much the case in real life. Consider the case of Florida bankruptcy attorney Kevin Gleason, who while in the process of defending his client allegedly referred to a judge's opinions as being half-baked, and if reports are to be believed, even went so far as to have a bottle of wine delivered to the judge's chambers.

That might fly in the movies, and it might be a hit on television, but it's a significant issue in the courtroom where decorum and process are taken very seriously. You see, in Florida a bankruptcy judge has the authority to bar an attorney from practicing bankruptcy law in the district they serve in.

As you can imagine, if the attorney's area of focus is bankruptcy law, being officially prevented from practicing his or her trade in the region where they live, could be a problem.

In Florida, it is more typical for attorneys to be disciplined by other attorneys, or even by the Florida Supreme Court, with a recommendation from the Florida Bar. However, this current situation could establish a precedent as to how that process might work in the future.

The lesson in this case is clear, however. Watching loads of Perry Mason reruns, or a Franklin and Bash marathon will not prepare any of us to perform with excellence in the courtroom. Not in real life, anyway. The ramifications of the real judicial system can be significantly more harsh than those you typically see at the conclusion of an episode of a weekly television show. Mr. Gleason can certainly attest to that – personally. And that's undoubtedly true no matter which way his hearing goes.

Back to Basics with Estate Planning

Fundamental Estate Planning

The fundamentals are the same across all sizes of estates.  A recent post by my estate planning colleague, Scott Makuakane, who practices in Hawaii reminded me once again that it is important to review the basics.  Below is Scott’s blog posting on the fundamentals.  I think you will find them a brief, but worthwhile, read.

 No one enjoys a conversation about death.  And, with the estate tax exemption now set at $5 million for an individual and $10 million for a couple, many people may believe they have no reason to consult an attorney about their estate planning.  But avoiding the topic of estate planning can mean unnecessary expense, confusion and conflict.

SmartBusiness recently highlighted the fundamentals of a “well-thought-out estate plan,” with topics that everyone should consider – whether prince or pauper.

• Why do you need an estate plan?  A comprehensive estate plan ensures that your estate will distributed according to your wishes, provides protection for yourself in the event of your own disability, and allows you to plan for minor children, pets, and charitable causes.  You can also make sure that the assets you leave behind will be there for your intended beneficiaries - and not their creditors or ex-spouses.
• Can I write my own will?  You certainly can, and there are many online sites to help you do so! However, remember that you get what you pay for.  Improperly drafted or last-minute, hand-written wills frequently are contested and invalidated in court.  If you don’t know what you’re doing, the outcome could be much different than what you expect.
• What should every estate plan have?  SmartBusiness recommends two powers of attorney and a living will.  That's not a bad start, but I would expand the list to include a will, powers of attorney for financial affairs and for health care, and an authorization to your physician to share your health-care information with your health-care agent.
• What about trusts?  Many people choose to create trusts, not only to reduce estate taxes, but also to help their heirs avoid probate.  Trusts also can help shield assets from loss to due to unforeseen circumstances, such as the bankruptcy, divorce, or lawsuits of your heirs.
• What mistakes do people tend to make in estate planning?  The writer points out two common mistakes: failure to plan for their personal effects, and failure to review and update their plans over time.  Reviewing and updating your estate plan is particularly important in light of the frequent changes that have characterized our estate tax law of late.  Although the estate tax "coupon" (the amount you can pass estate tax-free) is $5 million for the next two years, the coupon is set to go down to $1 million in 2013, and the estate tax rates are set to go from 35% to 55% at that time.  Another mistake that we see is failure to implement an estate plan by making sure all assets are properly titled.  Many people create trusts but then do not make sure that title to their assets is transferred into their trusts. 

If you have questions, let’s get together and get them answered.  My goal is to provide you with helpful information for creating, implementing, and updating your estate plan to serve your wishes.  And our mutual goal will be creating an estate plan that will succeed when it is called upon to take you and your loved ones through life’s inevitable transitions.

 

 

Decisions, opinions, and conflicts within the law

When a generic couple who were legally married finds themselves in deep financial trouble, they might seek bankruptcy protection. And they might be absolutely right to do so. While filing bankruptcy is a serious step that requires careful consideration and a solid understanding of the ramifications that might follow, it is a legal option that all American's have available to them. Or maybe not.

Adding some specific names and descriptions to the generic example can complicate the issue, significantly.

The question at the core of this issue isn't bankruptcy, it's marriage. There is no standard agreement in the United States at this point as to what specifically constitutes a marriage. The issue is being openly debated in the public forum, and in the courts. That quandary leaves some American's in a difficult position. They legitimately do not know if a legal protection offered to their neighbors is extended to them, too.

In June, twenty of the twenty-four judges sitting on the largest consumer bankruptcy court in the United States sided with a gay couple, Carlos Morales and Gene Balas, who had filed for bankruptcy protection and in the process found themselves running afoul of the federal Defense of Marriage Act. Although Morales and Balas were legally married in California in 2008, they found they were not able to avail themselves of the full range of legal protections another, more conventional, two-gender couple might enjoy.

The question of what is, and what it not a marriage will continue to be an issue in our country for some time. And while that may not seem to be an argument that has an impact on all of our lives, it truly does. Our system of law will one day have to decide on a workable definition of what a marriage truly is, and settle on a method of dealing with the issue at the federal level, while states disagree on the point. For a mobile society like ours, that question, and the potential answers that spring up as a result, could very well impact each and every one of us at some point in our lives.

The high cost of interpersonal strife

At some point we all hit a bump in the road of life. For some of us that snag is a personal and private matter that we would prefer to keep that way. For others it is fodder for newspapers and entertainment programming. No matter what your status or level of fame, it hurts. It can be costly, too.

The two most obvious examples of this currently might be the recently announced split between singing sensations Jennifer Lopez and her husband of seven years, Marc Anthony; and the apparently growing turmoil over the wealth and property amassed by Hungarian born actress, Zsa Zsa Gabor over the course of her long, high-profile career.

The emotional pain of divorce, prolonged illness, and death can take a toll on any of us. In fact, the odds are good that each of us will fall prey to these sorrowful situations at some time in our lives. We may pay the monetary price along the way, too. As these two stories show in unique and differing ways, transition in any form has its price, both emotional and financial. There is at least one lesson for us to learn from these events as they unfold. More than likely we can learn more than just a single lesson that is pertinent to our own lives.

Hopefully the lesson you take away is a good one, that serves you well in the future.

Is this light's out?

Thomas Edison may have famously invented the incandescent light bulb, but that leading indicator of the industrial age is on its way out – or is it? In the pitched battle over energy use, the United States Congress has been wrestling with a law that was signed by President Bush in 2007 without much fanfare, but that otherwise innocuous law seems to have become of much greater interest lately.

At issue is the future of the incandescent light bulb. Under the current law 100 watt incandescents will be barred from the production floor by New Year's Day 2012. They'll still be in stores until the supply runs out. But that's it. No more hundred watt incandescents will be made for sale in the U.S.

Lower wattage incandescents will remain in production, but they'll be phased out over a two-year period. It won't be long now until American's will be reading by the warm glow of a cool running compact florescent bulb, or an LED lamp, or a hot and power hungry halogen, or a hot and note quite as power hungry halogen. Incandescents, the old standby that we all grew up with in our homes, will be out of the picture, however. Unless you hoard them now, while the store shelves are well stocked with them.

Or maybe not. As with anything that once existed and is being phased out by law, there is opposition. And while incandescent bulbs are famous for throwing off lots of light in exchange for a fair amount of heat, the debate that is raging in public these days is heavy on the heat, and lacking on the light. Misunderstandings of the law abound.

I certainly have no answer to the questions that rage around dinner tables and over water-coolers about which bulb is best, or even whether the cessation of most incandescent bulbs is a good thing or a bad thing. The theory of the law was to encourage the use of more energy efficient lighting sources. Although there are certainly those who will make more efficient choices when they change our their lamps, or their bulbs – there are others who will go the other way and select higher energy lights for their homes and offices.

People are people, where ever you go.

What will happen in the end? Who knows. Texas has introduced legislation that says incandescents made and sold within the borders of the state don't fall under the jurisdiction of the federal government, and so they believe they can continue to manufacture the big bulbs. Perhaps that initiative will gain steam. Perhaps not. Maybe other states will join in with a similar perspective. Then again, maybe this is much ado about nothing. It remains to be seen. No matter which direction it goes, you have to admit, it's an interesting show.

Who would have ever thought that it would be the lightbulb itself that was in the spotlight, center stage?

Top 10 Icebreakers offer guide for blogging

Another subject that I wanted to bring to your attention is a recently published book recommended by one of my colleagues.  It helps with the starting points for getting and keeping good relationships.  My goal as a legal counsel is to connect as well as to deliver good legal counsel.  I thought you would find these “icebreakers” to be helpful suggestions.

Debra Fine, author of The Fine Art of Small Talk  offers a lot of helpful advice on networking and connecting with people while networking.  In her book she includes a list of her top 10 icebreakers. She suggests using them at any occasion where you have few established relationships.  We’ve all been at those types of events – school meetings, business events, fundraisers, cocktail parties, dinners, and conferences/conventions where you need to start a conversation with people you don’t know well or those “strangers” you would like to meet.

Top Ten Icebreakers

1.            What is your connection to this event?

2.            What keeps you busy outside of work?

3.            Tell me about the organizations you are involved with.

4.            How did you come up with this idea?

5.            What got you interested in  … ?

6.            What do you attribute your success to?

7.            Describe some of the challenges of your profession.

8.            Describe your most important work experience ….

9.            Bring me up to date.

10.         Tell me about your family.

According to Fine, the theme to these ten icebreakers is that they are personal, but not too personal. “Your goal is to build a business relationship,” she says, “while still getting to know more about a customer or potential customer. If you are talking to an existing customer, they probably already know you are good at what you do, so you just want them to see you on a more human level.” Thinking about this –when you establish that comfortable connection on the human level, they are more likely to refer you to a friend or associate. 

The other thing to note about these icebreaker guidelines is that they give the new person control to decide just how much information they are willing to share and where they want to set the parameters of the conversation.  On your part,  your job is to help the other person feel comfortable with you as a person.  You never want to overwhelm them with complex topics.  You never want to slip into insider jargon.  And you never want to put your audience on the spot regarding religion or politics.

Many of our friends and acquaintances could be more effective using these 10 icebreakers, so I encourage you to forward this link to them.  Let’s all communicate more effectively.  And you are invited to contact me, so we can get better acquainted.

Austerity pains in the Golden State

Imagine living in a town where the budget is so tight, and the future looks so bleak, that the only solution the city leaders can think of is to outsource municipal jobs that are normally held by city employees. Welcome to the way it is in Costa Mesa, California. Life really is tough all over.

In March the city issued layoff notices to almost half the city's workforce. Many of those imperiled workers are represented by the Costa Mesa City Employees Association, which is in turn represented by the Orange County Employees Association – two union groups that have petitioned the courts to put a stop to the plan.

Judge Tam Nomoto Schumann is on the bench, and she has issued a preliminary injunction in the case, preventing the city from implementing its plans. She allowed the city until Friday to file objections, prior to the judge issuing her ruling.

At issue is whether the city has followed the proper processes when laying off workers, as well as the question of whether the workers being targeted for layoff can be legally laid off for the reasons given.

The Daily Pilot, a daily newspaper focusing on Costa Mesa, quotes City Attorney Tom Duarte from a press release, “This ruling doesn't affect the city's ability to research outsourcing possibilities and, if it's prudent, to outsource city jobs down the road.”

Clearly there is trouble brewing. No matter which side of the issue you're on, you're focused on the substance of the legal arguments, the process as it moves along, and ultimately – the judge's ruling. No matter which way it goes, it is a virtual guarantee that this issue will remain at the forefront of the minds of those hundreds of employees, and their families. City officials will have their hands full either way, too. They either have a fiscal problem, a public relations problem, or both. And no matter what they do, they are going to have at least one very sticky problem to work out.

Things truly are tough all over. This Costa Mesa case is a good reminder that the answers to difficult questions can be a whole lot harder to come to grips with than they might at first appear, especially if the people on the other side of the equation aren't in agreement with the solution you come up with.

It is good to remember that if the solution to one problem depends on a new problem being created for someone else – you may not have truly found the solution you were looking for. The people of Costa Mesa are certainly learning that lesson right now – regardless of whether they work for the city or not.

We'll be curious how the judge rules in this case. I'm sure you will be, too. Feel free to leave a comment if you have a thought, or hear the news before we do.

People are talking...

Last Friday New York became the most recent state to legalize gay marriage. Governor Cuomo signed the bill, which passed through the Senate with support from a handful of Republican lawmakers, including at least one who had run for office with the promise that he would oppose gay marriage in the state.

Issues with significant and obvious social overtones tend to create a furor in the public square, and as expected, people are talking about gay marriage, straight marriage, and what should or should not be under the law.

Talking heads pontificate on television. Editorialists editorialize. Neighbors discuss, and occasionally argue. And politicians step up on the stump and make promises, take credit, or vow a reverse of course is in the offing.

What few do is actually read the law. That's not just true of this new law in New York, it's true of most laws in most states, and in the nation as a whole. The vast majority of those who publicly express an opinion on topics such as this one have little knowledge of what the law actually says. Instead the interpret what the law means, what the intent of the legislators was, and what the ramifications of the change will be.

Almost all of what they have to share is conjecture. It has little basis in reality, and that is the shame of it. We learn when we have solid information on hand to guide us. Rumor, innuendo, suggestions, and misunderstandings of the facts can lead to worry, anger, and even violence under extreme circumstances. History has proven humans to be an emotional bunch who are prone to doing less than noble things when a big enough crowd gathers to vent their emotions - often with little real information to base their rage on.

I won't quote the entire New York marriage equality act here, but I will share a few sentences that are of interest and pertinent to the discussion, no matter which side of the argument you might be on.

“Marriage is a fundamental human right.” It says that using those very words. Regardless of whether you are married or single, divorced or widowed, engaged or commitment-phobic, it is reasonable to come to the same conclusion the New York legislature did on this one point, if you base your position on the traditions of the human race, throughout history. We marry. We always have. In fact, marriage is considered by many to be a cornerstone of civilization.

You'll notice there is no mention of gender, race, ethnic origin, or religious conviction on that simple sentence. “Marriage is a fundamental human right.” The legislature was concise on that point, at least.

“It is the intent of the legislature that the marriages of same-sex and different-sex couples be treated equally in all respects under the law.” That sentence is in the bill, too. Again, it is short, to the point, and suggests an attempt to be fair, even-handed, and respectful of the rights of the citizens of New York.

If you take the time to read the bill you will notice that there is no place where special privileges are granted, or special rights are bestowed. With one exception. There is an amendment to the bill that acknowledges that while the state recognizes marriage as a right, and that same-sex and different-sex marriages should be treated under the law as equivalent unions – no person or entity can be compelled to provide services, accommodations, advantages, facilities, goods or privileges for the solemnization or celebration of a marriage. These points are included in the religious exemption to the bill.

So while some of us may be in favor of this new law, and some of us may be opposed to it, the bill itself contains an important lesson in specifics for all of us. Because the truth of the law is may not be found in the pundit's pronouncements or the politician's speeches – it is laid out for all to see in the bill itself. As is the case with any bill, in any state, on any topic.

The world we live in really is an open book. We just need to be sure we take the time to read it ourselves once in a while. That's the key to truly knowing what's what – really!

Is a lifelong deal really a lifelong deal?

The Fox Theater in Atlanta, Georgia is one of the great entertainment palaces of the 20^th Century. Originally built as a venue to host movies and live performances, as well as to provide a home base for the Shriner's organization, the Fox has seen good times and bad. The doors opened just after the stock market crash that set off the Great Depression, but the Fox muddled through. With changes of ownership and management, the Fox maintained a presence in the community until the 1970s, when its future became truly tenuous.

Enter Joe Patten. Joe is a force of nature. He is the man most responsible for pulling together the resources and bringing sufficient attention to bear, which allowed Joe and his crew to save the Fox from demotion during those dark days. In return Joe was granted a lifetime lease on the 3,640 square foot apartment that lies under the domed roof of the theatre.

But that was yesterday, as the saying goes. The lease was actually signed on December 28, 1979, and it stipulates that Joe is granted the privilege of living rent free in the Fox for the rest of his life. Yet by the summer of 2010 there were rumblings that the board of directors of Atlanta Landmarks, an organization that Joe helped to form, and the current owners of the Fox, were suggesting that perhaps it was time for Joe to move along.

As you can imagine, the story made the papers, and caused a bit of an uproar in the community and across the Internet.

The publicity was arguably beneficial to Patten, who was in receipt of the letter suggesting that his time as the sole resident of the apartment above the Fox was coming to an end. That same media attention was less than beneficial to Atlanta Landmarks, however, which got a bit of a public relations black eye for being perceived as less than grateful or gracious to the man who had saved the landmark that he had called home for more than 30 years.

Only recently it would seem that Patten's attorneys have been able to hammer out an agreement with Atlanta Landmarks that will keep Joe Patten in his home, atop the Fox, until the end of his days. At 83 years of age, it no doubt provides some welcome relief to a proud octogenarian of considerable accomplishment to know that his coveted lifetime lease truly is valid for the remainder of his lifetime.

At least in this case, a lifetime lease really has turned out to be good for a lifetime. Congratulations, Joe. Long may you enjoy your home, without the fear of a moving van rolling up to the door unexpectedly.

ESTATE PLANNING: Planning for your children's education

Recently a fellow attorney in Indiana penned a thought provoking post on planning for your children’s education.  I enjoyed it, and I share it below with you.  The author is Chris Yugo writing a column for The Times in northwestern Indiana.

I just finished reading a book by Michael Schumacher called the "Mighty Fitz: The Sinking of the Edmund Fitzgerald."

As the title implies, the book chronicles the story of the Edmund Fitzgerald, a huge ore caring vessel that sank in Lake Superior in 1975. Except for what I learned from the Gordon Lightfoot song, "The Wreck of the Edmund Fitzgerald," I really knew very little about the ship and its sinking.

Although you might imagine that book about a shipwreck would end with the ship's sinking, the book actually picked up from there to discuss the investigation and how the families of the men who were lost came to terms with the tragedy.

One thing that caught my attention was a section dealing with the children of the sailors. In particular, it discussed how Eugene "Red" O'Brien, a wheelsman, encouraged his son to attend college and get an education by establishing a trust for his education. According to his son John, "It made me stay in college because it was my job. I was getting paid. Here was my dad, a guy with limited education, working on the lakes. Yet he had the insight to do these things"

The book didn't go into too much detail about the terms but according to John, he received a monthly stipend as long as he remained in school.

The great thing is each of you can do the same thing to encourage your children and grandchildren to attend school. Now some of you might be saying, "I'm having trouble just keeping the mortgage current. There is no way for me to establish a trust fund."

In today's economic environment, I certainly understand that. However, you can still plan now without actually setting anything aside. You can set up a trust for your loved one's education within your will. A trust established within a will is a testamentary trust.

By using a testamentary trust, you don't have to fund it until your death. At that time, it can be funded with the savings account or the proceeds from the sale of the home or from life insurance or retirement accounts. If the funds are available at your death, the trust will fund. If the funds aren't available at your death, then the trust won't fund and you haven't lost anything.

Since you create the trust, you can choose the terms. For example, you can restrict the funds to only be used to pay for tuition, fees and books or it can pay any legitimate educational expense including room and board and perhaps a living allowance. You can make the terms as restrictive or unrestrictive as you please. So be creative.

I'm pretty sure Red didn't plan on being lost at sea. However, he did have the foresight to plan, which enabled his son to get an education. Even if you don't work the ore carriers on the Great Lakes, you should still have a plan.

Please note:   Opinions are solely the columnist's, and his information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planning specialist.

Remember, I am the attorney who is available to address specific issues related to planning for your children’s education and other estate planning matters.  Please call me or post a request to meet in the COMMENT section of this blog post. 

 

Real estate is tough all over

Every now and then an article catches my eye that makes an outstanding point. When I can, I like to pass those little treasures on to others. So when I came across this piece in Forbes that so beautifully illustrates the leveled playing field that is the real estate market, I just couldn't resist popping a link in here.

The article is titled, “Whack! Celebrity Price Cuts: Mel Gibson, Penelope Cruz, Billy Joel, and More.” They're not talking about a reduction of the fee our top flight celebrities charge for their services, either. This piece is about the hit their real estate holdings have taken in our current economy.

It's an interesting read. You may even come away feeling a bit better about your own home's appraisal after perusing this piece. And if you happen to be in the market for a new house, in a far off place, with an illustrious history and a price tag in the seven figure range – well you just might find a deal in the process.

Enjoy!

Beware the Grandparent Scam

It's a sad fact of life, but there are people out there lying in the weeds, hoping to find an unwary victim they can take advantage of. All of us need to be on guard, and a big part of being on guard is being educated and aware.

This leads us to a brief discussion of an old but common ploy known as the Grandparent Scam. It works like this. You get a call late at night from your grandson or granddaughter. They sound different, but it's late and it might be a bad phone connection, so you ignore the sound of their voice and focus instead on the words they're saying. They tell you they are in real trouble and need your help. In this case, help equals money.

The reason for the sudden late-night need for cash is immaterial. The scammer has free time. They can find the names and ages of your grandchildren, so they can put together a scenario that is plausible enough to get your worried. You love your grandchildren, and you want to keep them safe. So you listen, assuming all the while that you're taking to your grandchild, not a thief who is trying to empty your bank account.

They tell you were to wire them a quantity of cash. They tell you how embarrassed they are and plead with you not to call their parents. “Can't you please help me?” sounds so heartbreaking coming through your phone at 1:00 AM.

So you get up and you wire the money, as you've been asked to do. Unfortunately, the money didn't go to your grandchild, who is more than likely still at home, safe in bed – it went to a scammer who just hit pay dirt.

How common is the Grandparent Scam? In 2010 alone the Federal Trade Commission received 60,000 complaints. On average the victims of this scam lost, $3,500.

So stay on your toes. If you get a call from a someone who identifies themselves as your grandchild, ask questions. Where are they? Can I call you back? Why are you at a different number than your usual cell phone number?

The longer the person on the other end of the phone talks, the more likely it is they'll make a mistake that clues you in to the fact that they are not your grandchild. Don't be afraid to call mom and dad, either. It might embarrass your grandchild if they are truly in trouble. But it might keep you from being the victim of a scam, too. In the big scheme of things, it's at least possible that suffering a little embarrassment might be the better of the two options.