Three Classic Estate Planning Blunders Friday, Apr 22 2011

Too often, estate plans fail.  Here are  thereof the  most common reasons.

1.   FAILURE TO PLAN.  You have heard that failing to plan is planning to fail, and it is true.  People procrastinate with their estate plans for a variety of reasons, one of them being the refusal of some of us to accept our own mortality.  Not to rub it in, but passing into the Great Beyond is not an “if,” but a “when.”  It will make a tremendous difference to your loved ones, your pets, and your favorite charities, if you have made a plan for what happens to your stuff (everything you own) when you assume room temperature. 

Your estate plan should also take into the account the possibility of your becoming incapacitated someday.  This is an issue that has become more and more important as advances in medical science have made it possible for us to live longer lives.  Unfortunately, medical science is still working hard to find the causes, and come up with solutions, to the various forms of dementia.  Although we live longer today than in years past, a growing number of us ends up needing long-term care.  It is absolutely critical to plan for how you and your loved ones will deal with the issues of long-term care, not the least of those issues being how you will pay for it.

2.   FAILURE TO IMPLEMENT.  Having a plan is great, but failing to implement your plan renders it all but worthless.  One of the primary ways people fail to implement their plans is to neglect to transfer their assets into the right “buckets.”  If you have a revocable living trust, it should probably hold most, if not all, of your assets.  Yet many people die with assets in their own names, which, in turn, results in costly and time-consuming probate proceedings that could easily have been avoided with some simple asset transfers. 

3.   FAILURE TO UPDATE.  Once you have set your course with your estate plan, you have to remember that even the best of plans will require course corrections.  Your health will change.  Your stuff will change.  The law will change.  The list of people you like and trust will change.  It is important for your estate plan to change so you can be sure that it will work as intended.  The best way to do this is through a regular discipline of reviewing your estate plan and updating it when necessary.

I’m here to help you avoid all three of these “blunder” traps.  If I can help, please contact me or leave a “comment” on this blog post.  As a trained estate planning professional, my goal is to guide and support you through the estate planning process. 

Wayne B. Ball is an estate planning attorney serving families and businesses inArkansasfor more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

 415 N. McKinley,Suite310

Little Rock,AR72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

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What Estate Planning is Wednesday, Mar 9 2011

Now I Understand

An acquaintance asked me about estate planning, not long ago. They weren’t asking for professional advice, they were literally asking if I could explain what estate planning is, and how it might affect them. It’s a good question, one that I wish more people knew the answer to.

First, it’s worth knowing that estate planning is not limited to the DuPont’s and Carnegie’s among us. Admittedly, Bill Gates and Warren Buffet have amassed fortunes so large as to suggest that significant thought needs to go into the planning of their estates. But estate planning isn’t just about money. It’s also about security, philanthropy, and control of our own interests.

One aspect of estate planning includes health care plans. Not only can estate planning help determine eligibility for Medicaid benefits, it can also allow each of us to issue specific directives about our own future health care. Even if a health crisis leaves us unable to speak for ourselves at some point, our prior planning can provide documentation of our wishes, which enables us to maintain control of our own destiny, even if we are temporarily or permanently incapacitated.

In fact, our estate planning can extend to the appointment of a specific person to act as our health care representative, as well as our desire to donate organs upon your death. It isn’t just about money and holdings. It is in a very real sense about us, as people.

Yes, estate planning allows us to make decisions while  in our prime that will come into play even after we are gone.. And more importantly your decisions are legally binding on those who may, or may not agree with our wishes. Remember, this is your estate and your life you are planning to protect.

Beyond health care, estate planning allows us to designate who speaks on our behalf should the need arise. Entering into a power of attorney allows us to appoint the person we trust most to oversee our personal business if we are unable to conduct our affairs ourselves. Many people assume that we must appoint our lawyer when we issue a power of attorney. You certainly could do that if you wish to. But you can also give that authority to your spouse, or a child, or a close personal friend, or anyone else you wish. A power of attorney is yours to give, or revoke, at your discretion. Estate planning can help you enter into, or terminate a power of attorney, on your terms.

Perhaps the most commonly known aspect of estate planning is the drawing up of a will. But even that can be more far-reaching than most people realize. You have the opportunity to not only decide what happens to your holdings after your death, you also have the chance to establish a trust if you wish to, so that you can provide for the care of a family member, or another charitable cause that is important to you. Trusts can also be used to minimize a tax burden, in some cases. Estate planning can even allow an individual to develop a strategy to avoid probate on some holdings. A practice that allows a well planned execution of our wealth, no matter how big or small, that keeps it all in the family, for lack of a better term – rather than running the entire contents of our lives through the court system before it is distributed to our heirs, or whomever we wish it to go to.

The assumption that only the very wealthy have any need, or the even the option of engaging in estate planning, is incorrect. Almost anyone who has something of value to leave behind can benefit from estate planning. And even those who do not have significant wealth can benefit in terms of health care planning.

Each and every one of us has a unique situation to deal with as we walk through life. There is no blanket answer or master plan that will work for everyone under every possible circumstance. Perhaps the practice of estate planning would be more readily understood of we called it Individualized Planning, instead?

It’s worth thinking about, at least.

Many valid issues are raised in this posting.  If you have questions related to any of the issues, please call me or leave a comment below, and I’ll get back to you.

 Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

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Knowledge and Money Provide Freedom of Choice with Long Term Care Thursday, Feb 3 2011

Understanding in advance, care settings and when and why they are appropriate will result in the most satisfactory experience for the caregiver, the care recipient and the family.  Also, understanding how government programs work helps with the final decision-making process as well.

Prior knowledge prevents crisis planning.

• Prior knowledge will save money.
• Prior knowledge will save precious time.
• Prior knowledge will rescue the caregiver.
• Prior knowledge opens the door to other options

 Without money to hire professional advice or to provide the most desired care setting, the only option is to rely on Medicaid. Medicaid typically means the remaining years of life will be spent in a nursing home. Other limited options are available from Medicaid or from community aging services but there are usually waiting lists.

 Here are some common funding options that can be used to provide money for care services:

 Long-Term Care Insurance

• Life Settlement
• Reverse Mortgage
• Cashing Out Of a Principal Residence through Sale or Buyback Arrangement
• Retirement Savings Accounts
• Life Insurance Arrangements

 Here are some common asset-saving strategies: 

• Medicaid Planning
• Veterans Aid and Attendance Benefits
• Rearranging Insurance Plans
• Private Home Care Arrangements
• Work Closely with Your Doctor
• Understand the Pricing of Community with Care Arrangements
• Purchase the Right Long-Term Care Insurance
• Family Shared Care Commitments
• Tax Advantage Strategies  

To learn more about these options and strategies and to gain more knowledge about long term care call us.

                              The Sooner You Start The Better Your Future

 Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

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What Can I Protect? Tuesday, Jan 25 2011

Plan well before you get there.

With 1.6 million Americans expected to file for Bankruptcy this year, we know that at least these 1.6 million and very likely many more researching the bankruptcy option have been asking the same basic questions. “What can I protect?”   “What will be left?”

A recent article in the Wall Street Journal Digital Network addressed these very questions.  My colleague in Nevada, Lizette Sundvick, offers a summary commentary on this article.

Some may opine that we are climbing out of the recession, but the effects are still wearing on us. According to estimate by the American Bankruptcy Institute, more than 1.6 million Americans are expected to file for Bankruptcy this year, with 42% of filers citing “job loss” and another 65% citing “income reduction” as the determining factor. Against this backdrop, it’s unfortunate that bankruptcy hits responsible persons the hardest because they likely have the most to lose. If you are filing this year, then you may have a great deal you wish to protect. I thought I’d share some tips from a recent article on SmartMoney about what you can protect.

• A Home: The protection afforded your home depends on your state of residency.  In addition, different states offer different acreage allowances for city and rural properties. Beyond that, the equity you have in your house also can be important to protect, because most states have an exemption allowing a certain amount of that equity to remain with the homeowner in the event that the home is sold by the bankruptcy trustee.
• Tax-Exempt Retirement Funds: These are usually safe, and IRAs usually can be protected up to $1.17 million per person. Don’t, however, try to dump other assets (i.e., from investments that are not protected) into the retirement fund. This is a no-no.
• A Car: Trying to retain the car is similar to retaining the house, since your level of protection depends on the laws of your state of residency. If the value of the car is below the exemption limit, and it is owned by the filer, then it can be kept. Otherwise, equity up to the exemption can go to the filer in the event of sale. Of course, in the 16 states that allow the federal “wild-card” exemption, the rest of the value of the car may be covered and the car itself retained, but this itself depends on state laws and exemptions.
• Life Insurance Policy: If the policy is term-life insurance, then it is generally safe. Whole-life policies are generally regarded as investment vehicles, however, and in that case it will depend on state exemption levels.
• College Savings: If college savings are held in a 529 plan or a Coverdell account, there are a couple of factors you need to know. If the account is only 2 years old, it is only protected up to $5,000. However, if the account is older than 2 years, it will be safe for so long as the beneficiary is not also the filer.

Generally speaking, the biggest factors are the state-specific exemption levels and allowances. Be sure you obtain competent professional advice to protect your interests (and stay out of hot water).

Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

 Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

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My Mother took care of me, so I’m going to take care of her. Friday, Jan 14 2011

I’m often asked the question, “What are the options for a baby boomer with aging parents?”  I was pleased to see this posting by my colleague Suzann Beckett practicing in West Hartford, CT .  She offers one answer for the many baby boomers facing aging parents wishing to remain in their homes but lacking the financial means. 

Medicare benefits without Life of Poverty

The New York Times recently ran an outstanding article, detailing the basics of Pooled Trusts. Most American’s are not familiar with the term, or the tool – but thanks to the Times, a much larger audience had the opportunity to read about a means of caring for aging family members, while intelligently keeping the wolf away from the door.

The unfortunate reality for many of us is that a time may come when we can no longer manage to personally provide appropriate care for a loved one in our own home, or in their own home for that matter. But at the same time, we may not have the financial capacity to afford private care providers that would be able to fill the gap.

Pooled Trusts are designed to bridge that void.

Rather than reiterate the content of a well written and very informative piece, I will simply recommend that anyone with an elderly family member read this piece, if for no other reason than to gain some basic insight into an option that may be available and viable, in certain circumstances.

You can find the story on the Internet at:

http://www.nytimes.com/2010/11/05/business/businessspecial5/05TRUST.html?_r=3&adxnnl=1&src=twrhp&adxnnlx=1289307765-CdcouVKW+F0EwVbdadQHMQ

As a woman who has faced these issues in my personal life, with my own family members, I am intimately aware of the emotional and financial drain that advancing age and health issues can impose on a family. In order to deal with these issues to the best of our ability, we need to be aware of our options, and informed regarding the pros and cons of each of those options. This story is a good step in the right direction on that count.

I am so pleased the New York Times published Tara Siegel Bernard’s excellent article on this very important topic.

This is good information on one way that baby boomers can prevent their aging parent(s) from going into a nursing home.  If this topic of “pooled trusts” is something that you would like to know more about, I am available to meet with you.

Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

 

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Unique Planning Opportunity Ends At Midnight, December 31, 2010 Tuesday, Dec 28 2010

On December 17, 2010 the President signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Tax Relief Act), extending the Bush-era tax cuts. This new law creates a once-in-a-lifetime planning opportunity that ends at midnight, December 31, 2010.

The new law also presents additional planning opportunities that are less immediate, but no less important. We will discuss those opportunities more generally in the future, but we are writing today to advise you of this unique opportunity and to strongly encourage you to take advantage of it.

Background

Generally, transfers (greater than $13,000 per year) to generations younger than children are subject to what is known as the generation-skipping transfer tax, an onerous tax that equals the maximum gift or estate tax rate. The purpose of this tax, enacted in the late 1980s, is to prevent wealthy individuals from transferring assets to younger generations for the purpose of avoiding application of the estate tax at every generation.

A Unique Opportunity

The 2010 Tax Relief Act creates a unique opportunity to make gifts through December 31, 2010 that are not subject to the generation-skipping transfer tax. This is because, under the new law, the tax rate is zero for any generation-skipping transfer made in 2010.  Beginning January 1, 2011, the tax rate for these transfers will be 35%. In two short years the rate goes back to 55%.

Take Advantage of the Lowest Tax Rates in Decades

I strongly encourage you to consider taking advantage of this rare gift from Congress and consider making transfers to generations younger than children, even if you do not yet have grandchildren. We can help you structure these gifts so that they meet your goals and objectives, regardless of amount.

Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

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Year End Matters Wednesday, Dec 8 2010

Obama by Joshua Roberts of Reuters

The federal estate tax lapsed for 2010, and barring no action by Congress it was scheduled to return on Jan. 1 with an exemption of $1 million per person and a maximum rate of 55 percent.
I have good news to share with you. The long wait for action to address the unknown status of the federal estate tax may be approaching an end. In a December 6, 2010 online posting by the New York Times, they reported that President Obama announced a tentative deal with Congressional Republicans on Monday.
An excerpt of the article appears below, and a link to the full article is included. The accompanying photo by Joshua Roberts of Reuters appeared with the article.
Mr. Obama made substantial concessions to Republicans. In addition to dropping his opposition to any extension of the current income tax rates on income above $250,000 for couples and $200,000 for individuals, he agreed to a deal on the federal estate tax that infuriated many Democrats. The deal would ultimately set an exemption of $5 million per person and a maximum rate of 35 percent — a higher exemption and far lower rate than many Democrats wanted.

http://www.nytimes.com/2010/12/07/us/politics/07cong.html?pagewanted=1&_r=1&nl=todaysheadlines&emc=a2

But the NY Times article also cautioned that the deal is not supported by all parties. So resolution may be within sight, but it is not yet a finalized deal.
“The House Democrats have not signed off on any deal,” Representative Chris Van Hollen of Maryland, who has been representing House Democrats in formal negotiations on the tax issue, said Monday night. “We will thoroughly review and discuss the proposed package in the caucus.”
Some senior Democrats said an agreement by Mr. Obama to accede to Republican demands on the estate tax could lead to a revolt among lawmakers.
My guess is that there will not be an agreement reached on estate taxes this year. I think the estate tax agreement reached between Obama and the Republican leaders will be the part of the agreement that gets tossed to gain enough support to get the two year extension of the other Bush Tax Cuts.
The following quote from Nancy Pelosi seems to indicate that is a likely outcome.
“We believe the estate tax in the bill is a bridge too far,” the Speaker said. That provision shifts the balance in the agreement to Republicans and “ends any kind of symmetry between the two sides.”
In addition there are a fair number of Republicans who will refuse to support any legislation that is not a total repeal.
No matter what happens in the next 3 weeks, it will not bring an end to uncertainty.
Notwithstanding the confusion over estate taxes, there may be other more practical reason that you should not put off reviewing your estate plan. Below is a checklist. A positive answer to any of them may indicate a need to review your estate plan.

ANNUAL REVIEW CHECKLIST

Below you will find a number of questions. A positive answer to any of them may indicate a need to review your estate plan. Check the appropriate boxes.
Specific Bequests
□ I would like to make specific bequests to individuals not presently included in my plans or delete the names of one or more persons (or charities) currently named.
□ I would like to change the amounts of some of the bequests I have made.
Changes in Valuation
□ The value of my estate has changed more than 20 percent in the last two years.
Special Provisions for Children
□ My health (my spouse’s or children’s health) deteriorated substantially in the last year.
□ A child has failed to demonstrate the ability to handle financial matters.
□ A child may have issues with drugs, alcohol, or holding a job.
□ Concern about a child’s spouse taking property.
□ Want to consider how incentives can motivate my children and prevent them from becoming “trust babies.”
Newly Born or Adopted Children
□ A child (grandchild) has been born (or adopted) since our last review.
Physically Challenged or Incompetent Children
□ A child (grandchild or other dependent) has become handicapped or seriously injured since our last review.
Status of Family Marriages
□ A member of the family has become divorced, separated or widowed since our last review.
Cancellation of Loans to Children and Equalization of Inheritance
□ I would like to discharge an obligation owned to me by canceling the loan in my will.
□ I would like to provide a clause to equalize any gifts made in the past (or to be made in the future) to certain children (grandchildren).
Life Insurance
□ I have added (or dropped) more than $50,000 of life insurance since our last review.
□ I have (or would like to) change a beneficiary designation on an existing policy.
□ I have not created an irrevocable life insurance trust to exclude life insurance proceeds from estate tax.
□ I feel I may need more life insurance but I don’t know how much to purchase or what type to consider.
Gifts
□ I would like to make substantial gifts to minor children (grandchildren).
□ I would like to take advantage of the $12,000 annual gift tax exclusion.
□ I would like to avoid transfer taxes on assets that have a strong probability of future appreciation.
Gifts to Charities
□ I would like to add (delete) one or more charitable beneficiaries.
□ I would like to change the amount of my bequest to certain charities.
Business Interests
□ I have entered into a stock (partnership) buy-sell agreement since our last review.
□ My business situation has changed significantly since our last review.
□ I am interested in finding out how to transfer my business to a third party or key employee.
□ I would like to find out how to transfer my business to a child and still equalize distribution to my children.
□ I am considering selling my business.
□ I have not started planning an exit strategy for my business.
Guardian, Executors and Trustees
□ I would like to name a particular person as advisor to my executor and trustees.
□ I would like to reconsider the designation of the guardians, executors, and trustees I have named.
□ I would like to prevent someone from becoming guardian of my minor child.
Taxes
□ I am concerned I am not taking full advantage of the marital deduction/generation skipping tax exclusion.
□ I am not certain that my spouse’s estate plan takes advantage of both federal estate tax exemptions.
Funding
□ I have acquired new assets that need to be transferred to my trust.
□ I am not certain that all assets that should be in my trust are in my trust.
Retirement
□ I am nearing retirement.
□ My retirement assets have not been fully considered in my estate plan.
Saving Expenses
□ I would like to know the amount of cost and fees that can be saved using a living trust to avoid probate.
HIPAA
□ I have not given HIPAA Authorizations to my trustees and personal representatives.
□ I do not have HIPAA Authorizations for my children.
Other
□ I would like to review my estate plans for the following reasons.
□ I would like to know how the latest tax law affects my estate plan.
□ I have questions about my estate plan.
□ I am planning on retiring in the next five years.
□ I have concerns about a potential lawsuit.
□ My durable power of attorney, living will, or health care proxy is more than two years old.
Call for an appointment to review these matters:

Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

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Financial Parenting Tips Monday, Nov 29 2010

Here are some great financial planning tips from a colleague Lillian Davenport.

Good financial parenting could begin with an allowance that is tied to the completion of specific chores, to teach children that money must be earned.

Another excellent idea is to give young children holiday gifts in three pieces: one piece to spend, one piece to save, and one piece to give to someone who is in need.

Families report great results with this simple plan, and heirs remember the lessons learned and speak of them gratefully for a lifetime.

We want to give our children as the sage of Omaha, Warren Buffet says “enough so they can do anything, but not enough so they do nothing”. At the same time, mature children whose values are intact could do so much good in the world, not only for themselves and their families, but also for their communities.

Some of the most successful families have constructed “100 year plans” (four generations) to pass on both the family values and the family financial assets. Increasingly, families are engaging community members in their legacy development processes to assure the effectiveness of the gifts made.

Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

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Estate Planning the Ben Franklin Way Monday, Nov 15 2010

Planning for the Future

Benjamin Franklin is largely known today for his key roles in the American Revolution, the formation of the United States, and his diplomacy with France.  But Franklin was also a very successful businessman.  Starting with absolutely nothing, he built a substantial fortune.  And he capped it off by demonstrating keen skills developing his estate plan.   I hope you enjoy this quasi history experience while admiring Ben Franklin’s adroit estate planning skills.

Estate planning, the Franklin way

The subject of Ben Franklin came up the other day in conversation. More specifically, the subject of Ben Franklin’s visionary approach to estate planning, came up during a discussion of how the average person can make the most of their wealth for posterity.

Benjamin Franklin was many things. Born into humble circumstances, Mr. Franklin very literally ran away from home, then followed up his running away by working, innovating, persevering, and struggling to ultimately become one of young America’s wealthiest and most respected citizens. He knew a thing or two about math and the compounding of interest, too.

For those who are truly curious, a version of Benjamin Franklin’s Last Will and Testament is available online, from the Franklin Institute. Included is a codicil to the original Will, that should give anyone pause. Franklin’s significant wealth is apparent, as is evidenced by the extraordinary number of homes, land, and valuables he details in his Will. But the relatively minor sum of one-thousand pounds sterling mentioned in the codicil, which would be equivalent to roughly $4,000 at the time – is particularly impressive for those of us who would like to make an impact on the generations to follow, even if we do not have the financial capacity to astound the neighbors at the moment.

Franklin specified that the money should be held in trust. Two trusts, actually. One-thousand pounds sterling was provided to the city of Boston, where Franklin was born, and one-thousand pounds sterling was given to Philadelphia, the city that is most commonly associated with Franklin as his home. Both funds were specified to be held and invested, in a specific manner, and maintained for two-hundred years. A significant amount of time, certainly. But Franklin wasn’t looking for returns that could be looked down on as small potatoes. He was looking to shake the world. And he did. He has. He continues to, and will for years to come.

You see, Franklin’s $4,000 investment has grown to millions of dollars in the interim. The funds he put away for posterity have done exactly what he hoped they would do. And through careful management, they have continued to grow, and expand in value through good times and bad.

Now admittedly, most of us don’t think two-hundred years into the future – and most of us don’t have massive estates like Mr. Franklin had. But almost all of us can find a way over the course of our working lives to put away a few dollars in the hopes that we can make the lives of our children and grandchildren more comfortable and satisfying than ours may have been.

If Franklin’s Will proves anything, it is a tangible demonstration of how a well intentioned gift, well managed, well planned, and well executed, can change the lives of generations to follow.

It’s something to think about, isn’t it?

Benjamin Franklin exercised far more farsightedness in his estate plan than most of us feel the need for.  But Franklin did reveal the powerful benefits to be gained from well thought out plans.  His clever employment of the principal of compounding into his estate plan is admired to this day.  Bravo to Benjamin Franklin – for executing an estate plan that has spanned several centuries.  I am available to assist you with an estate plan to span a decade or two, and I would enjoy the challenge of assisting you with an estate plan for several centuries……if you wished to follow the lead of Benjamin Franklin.

Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

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Do It Youself Wills Tuesday, Oct 5 2010

Forbes Magazine’s September 7 issue had a thought provoking article on “Do It Yourself Wills”.  My WealthCounsel colleague in Montana, Mark Josephson, took the conversation one step further with the commentary he shared.  I hope you find this informative. Josephson begins,  “My Larsson estate commentary and a recent article on Forbes.com regarding the pitfalls of do-it-yourself estate planning,  The Case Against Do-It-Yourself Wills got me thinking about some additional comments.  I could not agree more with the overall point made in the Forbes article.  I do disagree with some of the details. The Forbes article talks about the famous Montana court case involving Charles Kuralt (remember he was the famous CBS broadcaster who labeled Montana’s Beartooth Highway as the most beautiful drive in America) and his handwritten love letter to his mistress.  In a case that went to the Montana Supreme Court FOUR times, his handwritten love letter was ruled to have given his valuable Montana property to his mistress and to add insult to injury Kuralt’s family had to pay the estate taxes due on the Montana property because the handwritten letter did not coordinate with the tax clause of his professionally drafted Will. The article reminded me of another Montana case, The Estate of Dern, in which case Mary and Clifford Dern, who each had children from a different marriage, bought a trust package from a non-lawyer and also attempted to amend it themselves four times — sometimes having proper signatures, sometimes not.  In the end, the children ended up suing Mary with the case ending up in the Montana Supreme Court.  I think Justice Nelson in that case summed up the whole do-it-yourself thing as best as I’ve ever read.   He said: Given the facts of this case, it is appropriate to make a further observation. If nothing else, our decision here should serve as a warning of the pitfalls of the “canned,” “fill in the blanks,” “one size fits all” trust instruments that are increasingly being sold to unsuspecting members of the public, particularly senior citizens, by salesmen, many of whom have no professional qualifications whatsoever and some of whom are little better than scam artists. … In truth, few areas of the law are more technical, complicated and prone to financial disaster than estate planning and trusts, nor more demanding of the sort of individually tailored advice and assistance that can best be obtained from a competent attorney and tax professional. This case, unfortunately, proves that point. [my emphasis added]”

From his position on the bench, Justice James C. Nelson of the Montana Supreme Court certainly offered a stern warning on the “DIY Wills”.  The Judge’s views seem to have been formed long before the Forbes 9/07/2010 article, but his sentiments seem to parallel the Forbes article.  I’d like to serve as the ounce of prevention by serving as your “competent attorney” that the Judge refers to in his above commentary.

Wayne B. Ball is an estate planning attorney serving families and businesses in Arkansas for more than 25 years. Wayne B. Ball can be reached at:

Wayne B. Ball

415 N. McKinley, Suite 310

Little Rock, AR 72205

501-687-9000

Fax 501-687-9003

Wayne.ball@ball-stuart.com

http://www.ball-stuart.com

Leave a Response »