I am a finisher. I love to check things off my "To Do" list. Here's a secret. Sometimes, just for the fun of checking it off, I’ll put something on my list that I am just about to complete. A little "yeah, me!" It works to motivate me to keep up the effort.
The idea that we can uncover a way to prevent or even reverse the symptoms of Alzheimer’s is so tantalizing, but not yet close enough to check off our list. For a finisher like me, advances in understanding or developing a cure for this disease makes me jump for joy. Join our team to donate or walk together on October 6, 2012.
Why It's Personal
From my grandfather I learned to stash my candy hoard and to look for treasures in unlikely places. My grandfather must have started showing signs of early Alzheimer’s when I was a young child. He was in his early 60's and seemed to veer off into his own world a little bit more each time I would see him. I remember him to be a little bit grouchy. Sometimes he would tease me but mostly he kept to himself. As a child, I was intrigued when I learned he hid a stash of peanut brittle in his office of piled up books and papers. Of course, I had to sneak in to look for his stash. I only found it once and never again!
Both of my grandparents were professors at a small, Christian college in Texas: Abilene Christian University. When they retired, my grandmother taught in Puerto Rico while my grandfather sent letters and resumes for a job he would not find. Later, my grandmother was honored by the American Association of University Women. She gave a speech and the picture of her proud and happy smile is still with me. Later that same evening, my grandfather wandered off into downtown San Diego. Was he looking for his own past glory days? By that time, it was clear he could not be trusted to care for himself.
My grandmother cared for him while Parkinson’s and osteoporosis weighed her down with the effects of these disease. She put up with her husband’s outbursts, wanderings and "games" with little jokes and smoothing over his deficiencies. Her mind was sharp until the end. She loved him and did not want to live apart from him, even when their church asked her not to bring him as "he disturbed other people".
Watching him decline and the toll it took on my grandmother, my uncle, and our family, I wondered how someone with so much mental ability could not remember his own address. Now, as I work with clients who have lost brain function, I have a better understanding. We all have a primal need to both care for ourselves and to be cared for, even as mental capacity slowly slips away.
Living A Legacy
My grandfather lived inside a world of his own making but he had a supportive family around him, even if he did not remember who they were. When there is no suitable family nearby, wisdom says, search out someone trust worthy to handle what you cannot do for yourself any longer, while you still have the choice. This is one way to care for ourselves and protect the legacy we will leave behind.
Someday, there will be a cure or a way to halt the effects of Alzheimer’s Disease. We seem so close. Until then I will continue to Walk To The End. This is one way I am living my legacy; today for a future I may not see, but which I hope will be.
Join our team. Let’s walk together in body or in spirit on October 6, 2012.
Monday, August 20, 2012
Wednesday, August 8, 2012
Joy Invites Practice: Practice Makes Perfect - (10)
Ok, I know they don’t use the simple 1through 10 score cards in the Olympics anymore, but it’s so much easier than the current system to convey a really great performance. What fun to watch the women’s USA gymnastics team do so well together and individually. Or, to watch the tenacious women’s USA beach volleyball team of Walsh & May-Treanor. Two mommies who would eat sand to secure a win. The joy of playing a sport often calls athletes to a higher level because they enjoy the practice!
Professional fiduciaries don’t have anything like Olympic events. We take on cases where there is no suitable family or friends or when someone plans a large gift to a charitable cause. Often the situations presented provide the barest details. We must weigh the risks and choose whether to take the plunge. Sometimes these situations include those like one a professional fiduciary described recently - if there was a Fiduciary Olympics, this would rate in the highest difficulty.
Fiduciary Olympics - Highest Difficulty Rating
The public guardian needed a professional fiduciary to step in when an elderly woman’s drug addicted son was accused of elder financial abuse and her bi-polar daughter lived far away. The professional fiduciary agreed to step in so the woman could be moved to an assisted living facility; the son moved out; and, the home cleaned and sold to care for the woman. The fiduciary described entering the home with goggles, breathing mask, gloves and removable booties to avoid infection from rat feces and old food found in the place.
The elderly woman needed help that neither the state nor her children could give her. Not all of our cases are so difficult, but when we are presented with a situation, it is our duty to ourselves and to the people we serve to determine if we can "go the distance". Do we have the same perseverance that the Olympic athletes have? Do we have adequate training, appropriate experience and the intestinal fortitude to do the work? Do fiduciaries receive extensive training, preparation and refining like athletes who train for a "Big Event".
Athletes don’t just learn about their game: they practice; they do warm-up drills; they watch other great athletes; they learn from each other; they have coaches that encourage or guide them; and they practice a lot.
Fiduciary Training
The State of California requires individuals seeking a license as a Professional Fiduciary to have a certain level of education and experience. The course of required education covers the laws, ethics, practical considerations, reporting & accounting requirements; and, asset management among many other topics. The purpose of these courses is to promote the level of knowledge required to evaluate and handle the many possible situations that arise when serving as a fiduciary.
In addition, professional fiduciaries are required to have a certain number of hours of continuing education each and every year. There are few better ways to receive this education than by joining the Professional Fiduciaries Association of California and attending the annual and regional education offered by this organization. This is much more education than a family member, friend or even a non-licensed CPA will have about closing out an estate. It’s probably more education than most people would ever dream is required by the situations we encounter.
Still, it seems like we can always use more training and preparation. Like the warm-up drills or the team practices of athletes, we can seek ways to regularly sharpen our skills. A professional fiduciary is brought in to evaluate, make decisions and take action. To do this we must exercise good judgement, informed by experts in their field of practice. We bring together many different professionals to get a job done right.
Since our "stock & trade" is making good decisions about difficult situations and properly communicating with the parties involved, it is helpful to regularly "try on" how we would handle a sticky situation before we are faced with the choice. This can be gleaned from informal conversations with professionals, such as attorneys or other experienced fiduciaries. While helpful, this method is a little bit like sitting in the passenger seat on the way to a destination, then being asked to drive back on the way home. Our attention is so much more acute when we are in the driver’s seat, isn’t it?
Warm-Up Drills
Another way to sharpen our decision-making abilities is to use quick mental warm-ups to stimulate our thinking. The ACE Fiduciary Group posts an occasional poll question to fiduciaries and other professionals engaged in this work. The poll question is like some of the on-line games that offer "increased mental acuity". The questions are designed to be simple, but the answers are rarely simplistic. We do this to sharpen our thinking about areas we commonly encounter but which have no obvious correct answer.
You can participate by clicking here. The current poll will close on August 16, 2012, although this link will always bring you to our current poll topic. If you are interested in the results and some feedback about this topic, sign-up for our emails as we will post the results to those who receive our occasional, informative email blasts.
Remember, fiduciaries cannot and do not give legal advice. We are doers rather than advisors.
Professional fiduciaries don’t have anything like Olympic events. We take on cases where there is no suitable family or friends or when someone plans a large gift to a charitable cause. Often the situations presented provide the barest details. We must weigh the risks and choose whether to take the plunge. Sometimes these situations include those like one a professional fiduciary described recently - if there was a Fiduciary Olympics, this would rate in the highest difficulty.
Fiduciary Olympics - Highest Difficulty Rating
The public guardian needed a professional fiduciary to step in when an elderly woman’s drug addicted son was accused of elder financial abuse and her bi-polar daughter lived far away. The professional fiduciary agreed to step in so the woman could be moved to an assisted living facility; the son moved out; and, the home cleaned and sold to care for the woman. The fiduciary described entering the home with goggles, breathing mask, gloves and removable booties to avoid infection from rat feces and old food found in the place.
The elderly woman needed help that neither the state nor her children could give her. Not all of our cases are so difficult, but when we are presented with a situation, it is our duty to ourselves and to the people we serve to determine if we can "go the distance". Do we have the same perseverance that the Olympic athletes have? Do we have adequate training, appropriate experience and the intestinal fortitude to do the work? Do fiduciaries receive extensive training, preparation and refining like athletes who train for a "Big Event".
Athletes don’t just learn about their game: they practice; they do warm-up drills; they watch other great athletes; they learn from each other; they have coaches that encourage or guide them; and they practice a lot.
Fiduciary Training
The State of California requires individuals seeking a license as a Professional Fiduciary to have a certain level of education and experience. The course of required education covers the laws, ethics, practical considerations, reporting & accounting requirements; and, asset management among many other topics. The purpose of these courses is to promote the level of knowledge required to evaluate and handle the many possible situations that arise when serving as a fiduciary.
In addition, professional fiduciaries are required to have a certain number of hours of continuing education each and every year. There are few better ways to receive this education than by joining the Professional Fiduciaries Association of California and attending the annual and regional education offered by this organization. This is much more education than a family member, friend or even a non-licensed CPA will have about closing out an estate. It’s probably more education than most people would ever dream is required by the situations we encounter.
Still, it seems like we can always use more training and preparation. Like the warm-up drills or the team practices of athletes, we can seek ways to regularly sharpen our skills. A professional fiduciary is brought in to evaluate, make decisions and take action. To do this we must exercise good judgement, informed by experts in their field of practice. We bring together many different professionals to get a job done right.
Since our "stock & trade" is making good decisions about difficult situations and properly communicating with the parties involved, it is helpful to regularly "try on" how we would handle a sticky situation before we are faced with the choice. This can be gleaned from informal conversations with professionals, such as attorneys or other experienced fiduciaries. While helpful, this method is a little bit like sitting in the passenger seat on the way to a destination, then being asked to drive back on the way home. Our attention is so much more acute when we are in the driver’s seat, isn’t it?
Warm-Up Drills
Another way to sharpen our decision-making abilities is to use quick mental warm-ups to stimulate our thinking. The ACE Fiduciary Group posts an occasional poll question to fiduciaries and other professionals engaged in this work. The poll question is like some of the on-line games that offer "increased mental acuity". The questions are designed to be simple, but the answers are rarely simplistic. We do this to sharpen our thinking about areas we commonly encounter but which have no obvious correct answer.
You can participate by clicking here. The current poll will close on August 16, 2012, although this link will always bring you to our current poll topic. If you are interested in the results and some feedback about this topic, sign-up for our emails as we will post the results to those who receive our occasional, informative email blasts.
Remember, fiduciaries cannot and do not give legal advice. We are doers rather than advisors.
Saturday, July 28, 2012
Valuing "The Stuff"
Your Uncle Harry loved classic cars. He even had a few in his garage. Or maybe your Aunt Sadie collected Hummel figures or carousel horses. Most of us have something we like to collect. Occasionally these collections actually increase in value over time. Many times our collections are not easy to value except by other collectors. You can bet that someone in the family will think those Hummel figures are worth a lot more than they will bring in an estate sale, but at how much more work to you to sell? Once you have your inventory list, pictures and information about the items to be sold, you’ll want to call in some experts to provide you with a value. The method of valuation depends on whether the estate is facing litigation or is large enough to file a special type of tax return, the Gift & Estate Tax return.
When conflict is brewing over an estate or if the estate will require a Gift & Estate Tax return (IRS form 706) you’ll want to obtain written values from qualified appraisers. When there is no conflict between beneficiaries or estate values do not need to be “proven” to a court or the IRS, you can often save some expense by obtaining more informal valuations. Caution: Do not assume you can use the more informal approach to valuations. Check with your attorney and tax advisor to determine what type of valuation will be required for your situation.
When conflict is brewing over an estate or if the estate will require a Gift & Estate Tax return (IRS form 706) you’ll want to obtain written values from qualified appraisers. When there is no conflict between beneficiaries or estate values do not need to be “proven” to a court or the IRS, you can often save some expense by obtaining more informal valuations. Caution: Do not assume you can use the more informal approach to valuations. Check with your attorney and tax advisor to determine what type of valuation will be required for your situation.
You’ll find a chart of typical items held in an estate and the manner of valuation you’ll need to use to document the estate asset values on our website click here. Some types of items are more difficult to value. For example that 1963 Split Window Red Corvette classic car or “Trailer Queen” in Uncle Harry’s garage will need an enthusiast to provide an estimated value.
The initial valuation is crucial when preparing reports to the court or to beneficiaries. Look for an announcement of our upcoming workshop “How to Close An Estate and Not Be the Turkey at the Family Thanksgiving Dinner.” This workshop style class helps non-professionals named as an Executor or Trustee to wade through the requirements and steps to handling an estate. We’ll cover typical steps required, red flags, and an overview of the required reporting; all designed to help keep you out of the hot water. If you are interested in attending this workshop, let me know so we can send you the future details. For now, take a look at the valuation chart on our website to get an idea of how to get started obtaining proper valuations.
By the way, if you want to see some cool classic cars, look for us at the Hot Summer Nights, Danville Car Show on August 16th, 2012. We don’t have a refurbished 1963 Split Window Red Corvette to show off but I know my husband will be drooling over any he sees at the show. Shh! Don't tell me about the one you have to sell from Uncle Harry's garage.
Friday, June 22, 2012
Dividing The “Stuff” - Honoring The Memories
Grammy's old dresser brings back memories for her children and grandchildren. She had a habit of keeping toys and special gifts in it for her five grandchildren. Little surprises. Now that she is gone, they each want the dresser as a way of keeping her memory alive. They also want to pass on something of her fun spirit to their own children. While the family sorts through her personal items, the memories come alive. This family talks about their memories and finds a way to honor Grammy while passing on her “joie de vivre”. They see this as an opportunity to remember her life while having some fun.
In another family, a rocking chair has been passed down in the family since the 1750's. Traditionally, the family with the first child to have a baby got the rocking chair, and then on to the next generation. The last uncle in the line passed away with no children. Somehow he had kept this valuable antique family heirloom. Now, the nieces and nephews are fighting over the Uncle's estate and the rocking chair is a proxy for years of resentments within the family. The fight starts over the rocking chair, but if they don't find a way to agree on how to divide all the personal assets, they will face high legal fees as the conflicts grow and boil over.
If you are handling an estate, tread carefully with how you approach dividing assets. This job usually lands on the Executor of the Will or the Trustee of the Trust. Many times the dollar value is not as much of an issue as the emotional value. Here are a few suggestions on ways to manage passing personal property on to heirs. Each family has its own special personality so think about the particular culture of the family when deciding how to approach this area early in handling an estate.
KISS: A simple method which is best for low conflict families. Coordinate a date for the family to gather and give notice to everyone. When they arrive, give each person a stack of post-it notes - each person with a different color. As each person wanders through the house, each person “stakes a claim” for the items they want to take home. If more than one person wants an item, the process decided in advance rules. The group can decide how to handle the items that are wanted by more than one person. For instance, one family decided to share a prized necklace between the two girls, with each sister switching off having the necklace every other year. In other families, the tie goes to a coin toss. In others, a more formal bidding, based on estimated values works. Keeping it simple.
FAMILY MOVIE NIGHT: Remember when we used take the whole family to the video story to pick out a movie? Everyone chose some, then everyone had 10 votes (10 fingers). The movie with the most overall votes got to come home for the weekend. This method is a little bit like that. It is not perfect, but it can help sort through the stuff rather quickly.
This process also works if the primary heirs have their own children. The Monopoly money can be provided to children and grandchildren who are old enough to understand money concepts and won’t be upset if they don’t get something they wanted due to competition. This can allow everyone in the family to share in the fun. If children are involved, it might be best to only have the adults participate to avoid the tension that can occur if children become upset.
YOU LIKE IT, YOU BUY IT: This method works best when all or most family members are not very emotionally tied to family heirlooms, but prefer to get the most value from the estate. The Executor or Trustee can put all items up for sale, through an estate auction house or through EBAY. Any items that a family member would like to keep, can be 'purchased” at some agreed upon discount. They can either pay for it at the time or use a portion of their inheritance to “pay” the rest of the family for the item.
LIQUIDATION HOUSES: Some families prefer to use estate liquidators or auction houses to provide a bid on the entire set of household items. The advantage is that some will remove all the household items from the home. Some liquidators will only remove some items. It pays to call and find out how they work and whether it is a consignment or auction method. The liquidators know they will find many items that have little or no value. If they are willing to provide an “all-in” bid usually it is because they know they can sell some of the items at a significant mark-up. Many liquidators are actually consignment houses and if the items do not sell, someone must take possession of them. Liquidators consigment rates ususally are lowest (10%) for high value items and highest (39% or more) for lower value items. Liqudators or auctions houses can provide the assurance that you have gotten a current market value for the items without the hassle of having to market and deliver the items yourself. CAUTION: If the estate has known collectibles, make sure to get an appraisal on these and consider selling them to collectors or auction houses that specialize in collectibles.
CHARITABLE DONATIONS: When families' personal assets have little monetary value, a nominal estimated value can be given to the items which are donated. Many charities will pick-up items. Normally, donations are only a tax write-off when claimed on the final decedent's 1040 tax return, not on any 1041's filed for the estate. Always check with your tax advisor for specific tax advice.
If this or the sale option is chosen, always make sure to give sufficient and proper notice to all heirs to avoid prolonged conflict after the assets have been donated or sold.
In another family, a rocking chair has been passed down in the family since the 1750's. Traditionally, the family with the first child to have a baby got the rocking chair, and then on to the next generation. The last uncle in the line passed away with no children. Somehow he had kept this valuable antique family heirloom. Now, the nieces and nephews are fighting over the Uncle's estate and the rocking chair is a proxy for years of resentments within the family. The fight starts over the rocking chair, but if they don't find a way to agree on how to divide all the personal assets, they will face high legal fees as the conflicts grow and boil over.
If you are handling an estate, tread carefully with how you approach dividing assets. This job usually lands on the Executor of the Will or the Trustee of the Trust. Many times the dollar value is not as much of an issue as the emotional value. Here are a few suggestions on ways to manage passing personal property on to heirs. Each family has its own special personality so think about the particular culture of the family when deciding how to approach this area early in handling an estate.
KISS: A simple method which is best for low conflict families. Coordinate a date for the family to gather and give notice to everyone. When they arrive, give each person a stack of post-it notes - each person with a different color. As each person wanders through the house, each person “stakes a claim” for the items they want to take home. If more than one person wants an item, the process decided in advance rules. The group can decide how to handle the items that are wanted by more than one person. For instance, one family decided to share a prized necklace between the two girls, with each sister switching off having the necklace every other year. In other families, the tie goes to a coin toss. In others, a more formal bidding, based on estimated values works. Keeping it simple.
FAMILY MOVIE NIGHT: Remember when we used take the whole family to the video story to pick out a movie? Everyone chose some, then everyone had 10 votes (10 fingers). The movie with the most overall votes got to come home for the weekend. This method is a little bit like that. It is not perfect, but it can help sort through the stuff rather quickly.
Items are labeled with an A - F for six rounds. The first round “A” includes the most valuable items. Each beneficiary can bid up to 10 votes per round (poker chips work). The items that have more than one person with ten votes goes into the overtime round. Mark each item won with a color coded label for the person who will be taking it home. As you move to the next round, it will soon become obvious what items people would like to keep and what items will be sold or donated later. Get agreement in advance that any items left over can be donated or sold as the Executor or Trustee wishes.
MONOPOLY BIDDING: This method works best for a family that can handle the division of assets with a bit of light-hearted, fun competition. It does not work if there are underlying, unresolved tensions. Give an equal amount of Monopoly money to each heir based upon the percentage of inheritance. For example, if there are four adults with an equal share, each gets an equal amount of Monopoly money. Give everyone a sheet listing items with estimated values. Give them a week or so to come to the house and determine what items they would like to take home. Then select a date for an all family get together. Hold a silent or audible auction for items. Decide in advance if the person taking the item will pay for shipping or the cost of shipping will be paid by the estate. If a family member cannot attend the bidding date, the bids can be accepted in advance.This process also works if the primary heirs have their own children. The Monopoly money can be provided to children and grandchildren who are old enough to understand money concepts and won’t be upset if they don’t get something they wanted due to competition. This can allow everyone in the family to share in the fun. If children are involved, it might be best to only have the adults participate to avoid the tension that can occur if children become upset.
YOU LIKE IT, YOU BUY IT: This method works best when all or most family members are not very emotionally tied to family heirlooms, but prefer to get the most value from the estate. The Executor or Trustee can put all items up for sale, through an estate auction house or through EBAY. Any items that a family member would like to keep, can be 'purchased” at some agreed upon discount. They can either pay for it at the time or use a portion of their inheritance to “pay” the rest of the family for the item.
This method takes more time to prepare and follow-up. Before bringing the family in to select items, prepare a detailed list and obtain estimated values for each item. Take pictures of all items which will be placed on EBAY. You can send the pictures to family members or post on a family website to find out if there is an interest from family members for any items. You can then obtain appraisals (for larger value items) or estimated values for these items only. At time of final distribution, the value of the assets distributed to each beneficiary will reduce the amount of cash. If this method is chosen, be prepared for some bickering over the agreed upon values. Provide notice for all items that will be distributed by agreed upon values.
LIQUIDATION HOUSES: Some families prefer to use estate liquidators or auction houses to provide a bid on the entire set of household items. The advantage is that some will remove all the household items from the home. Some liquidators will only remove some items. It pays to call and find out how they work and whether it is a consignment or auction method. The liquidators know they will find many items that have little or no value. If they are willing to provide an “all-in” bid usually it is because they know they can sell some of the items at a significant mark-up. Many liquidators are actually consignment houses and if the items do not sell, someone must take possession of them. Liquidators consigment rates ususally are lowest (10%) for high value items and highest (39% or more) for lower value items. Liqudators or auctions houses can provide the assurance that you have gotten a current market value for the items without the hassle of having to market and deliver the items yourself. CAUTION: If the estate has known collectibles, make sure to get an appraisal on these and consider selling them to collectors or auction houses that specialize in collectibles.
CHARITABLE DONATIONS: When families' personal assets have little monetary value, a nominal estimated value can be given to the items which are donated. Many charities will pick-up items. Normally, donations are only a tax write-off when claimed on the final decedent's 1040 tax return, not on any 1041's filed for the estate. Always check with your tax advisor for specific tax advice.
If this or the sale option is chosen, always make sure to give sufficient and proper notice to all heirs to avoid prolonged conflict after the assets have been donated or sold.
Finally, since this task is often a pre-cursor to selling or transferring the home, it is important to handle with diplomacy but as quickly as possible. Grief hits people in varying ways and at varying times. For many people, the personal items are a strong trigger. Be sensitive and try to find a method that allows the family to process the loss in a way that fits the family best.
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