Demolition Takes Only A Day, Rebuilding Takes Months of Careful Work

Sometimes the family dynamics in handling an estate or trust, can feel a little like a refurbishment project gone awry, or one of those three-legged races with your ankles tied to those pesky siblings (and their spouses). What takes only a day to demolish, takes many, many more days to rebuild.

Some families just seem to dig in and deal with the hard work. They discuss how to take turns or share the burden of care between each other. They listen to each other and seek advice; not to trip up each other, but to take care of the needs of an aging family member and protect or preserve assets.

Other families seem more inclined to focus on courtroom drama or constant pushing to prove they are “right”. Don't get me wrong, just as demolition is needed to do a complete refurbishment, there are times when the courts are needed to intervene. For instance, when an elderly family member is being taken advantage of or a beneficiary has not received appropriate and timely information. Or when someone has taken assets that do not belong to them. Even sometimes just to gain clarity about a decision.

When your family is facing eroding trust in each other don't be the one to light the dynamite. The way we interact with family can often use some extra sweetness or re-reading Dale Carnegie's books.  When family issues and money issues overlap in the estate arena, it often takes more pre-thinking to avoid demolition of the family.

Below you'll find a few “refurbishment” tips to help keep your family looking towards positive options that can lessen stress and court room drama (which can cost the estate hundreds of thousands of dollars).

* The right choice of trustee is better insurance against litigation than a “no-contest” clause. Many people believe that they have fool-proofed their estate against unwarranted litigation costs with the “no-contest” clause. The rights of beneficiaries and reasons for them to bring valid litigation to secure these rights have been expanding. A “no-contest” clause is like a lock on a door, it only keeps out the honest people. Those who have an ax to grind will do so at the risk of their inheritance, even when it seems somewhat irrational.

* Don't try to be “fair” and name all your beneficiaries as co-trustees. In the long run, naming co-trustees usually creates more opportunity for stalemate and conflict. If the kids or beneficiaries already get along, they will probably think it is fine for one of them to act as trustee alone. If they don't get along, making them co-trustees will send them into court much more quickly. One recent case is an example of the difficulty this causes. All beneficiaries were also named as co-trustees. They could agree on very little. After months of court room drama, they agreed in a court-ordered mediation session that one neutral fiduciary would be a better choice. Before they agreed to a neutral fiduciary, they had incurred the cost of five competent attorneys. These costs would be paid from mom's assets.

* If you are having trouble discussing options with an elderly loved one, call in a Family Council Moderator. Unlike mediation, which is most often used when people have already taken sides and declared “war”, a person trained in the arena of elder needs and estates can often facilitate a “family” conversation towards decisions about the needs of a frail elderly person. This type of discussion is offered to provide a structure and place to hear and share.  Group discussion rules, identifying roles, brainstorming solutions and assigning chores can really help a family collaborate. It is the long, hard, but often rewarding work of “refurbishment” which can give a family new decision making tools and maybe a bit less stress at family gatherings. 

* Realize decisions made today will need to be revisited in the blink of an eye for the frail, ill or elderly.   There are multiple, recurring, decisions and transitions in the aging process. This means  the family decision making process will be taken out like an old family quilt to be used over and over. What is your family's style of decision making? Is it functional or dysfunctional? Does it need refurbishing?

Even as this generation of aging adults are more active and independent than in the past, there is still a point at which the life of the elder becomes more interdependent with family or a circle of care. This can give a new depth and beauty to family and friendships. If no family is nearby or able to walk alongside your or your clients, make sure they know about the option of safe, simple, stewardship by a skilled professional fiduciary.

SummerTime Is CakeTime!

Summertime, and the living is easy. Family gatherings, vacations, cake and ice cream, right?

Not so much for estate planning attorneys. Summer is one of the busiest times of the year for an estate planning attorney. When clients make plans to travel, they often also make plans to update their estate plan.

In my work as a professional fiduciary, I am often asked when does a client need to see an attorney to update their documents? Before you travel, it is always a good idea to make sure you have your emergency documents in order.  There are other events as well.

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Here's the cake. The layer cake is a time-honored tradition in estate planning. Sometimes, it is used to depict the very basic estate planning (first step) through very complex, advanced estate planning (useful for a few situations). Here the concept is applied more widely by using layers to depict events which can have a dramatic affect on your estate plan. Select your favorite flavor, this cake has 6 layers with a cherry on top.

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Business Succession*

Stock Options,

Advanced Tax Strategies.

Gross estate > $5,000,0000

or interest in a large charitable gift*

Health events 

 You or your named agent* have a major health event.

*Sibling Rivalry*

When your heirs, children or potential beneficiaries are in conflict.

A change in the status of heirs or children². 

This includes having children, losing a child, or an adult child reaching a level of maturity.

A change in marital status.

This can include a new marriage, a divorce* or death* of a spouse.  A trust is often described as a contract between spouses or those who are asked to honor your wishes. This event a clear signal to update your estate plan.

Between the layers? When you buy a new home or other real estate (not held in an LLC) make sure to have it titled in the name of your trust. When you refinance your home mortgage, make sure to check that the property title is still in the name of your trust.  Receiving an inheritance, or other new assets - make sure the assets are titled properly. 

* This event may signal that you may need to select a neutral professional fiduciary for your trustee or agent, especially if you are considering a charitable trust or there is conflict between beneficiaries. Select an experienced neutral to insure your trust is handled properly and according to your wishes.
² At times adult children are not the best choice due to their circumstance, such as bankruptcy, health issues, mental disorders, spendthrift, busy or live far away. Who is a good choice?  Read a law professor's thoughts on this topic by clicking here.
δ This is the cherry on top, the 7^th layer. It is meant to remind us to review and update our estate plan every 7 - 10 years. This will better insure your plan meets your current life needs and the current legal requirements. 


The estate plan documents are formal, legally binding instructions to your named trustee and agents as to your wishes.  Current documents will reflect your most current choices in case you encounter an emergency. If you would like to consult with an experienced professional fiduciary to better understand how a fiduciary might serve your family, please call our office.

Remember, this general discussion may not be relied upon as legal advice. For that, you would need to call your friendly neighborhood attorney.

Conversations That Count - Happy Mother's Day!

What is the best gift a mother (or father) could want? 

When my kids were little, they used to have fun making me breakfast in bed.  Yes, the toast and tea was cold. Yes, the honey was dripped over the floor.  But, I really enjoyed seeing them take responsibility and “take care” of me for a day.  When kids are adults, the best gift we can give our parents is probably not the cards, flowers, chocolates or promises we offer on Mother’s Day or Father’s Day. 

These days, my best times with my own kids as well as with my mom are the conversations we have. Especially the ones that mean something.  These are not always the most fun type of conversations to start. They can be a little scary.  Yet, they always yield a deep reserve of goodwill, if handled with respect by listening with interest to each other or asking about some difficult topics.

As we age or as our parents age, there are many decisions and transitions. Some of these can be difficult to talk about with our families.   Some of these decisions affect how our care at end of life might be handled. Since talking about death and dying is difficult, many of us wait until we are forced to confront it. At that point, it is often even more difficult and if we wait too long, our choices become limited.

The medical community in Contra Costa is sponsoring a free presentation (including lunch) on May 30th, 2014. This panel discussion with a number of community leaders is titled, “Conversations That Count”.  The Contra Costa Conversation Project is a movement within our local community to encourage us to use some great tools to address the topic of death and dying with our loved ones.  If you would like more information about the upcoming program, please send an email to info@ACEfiduciary.com to request information about how to sign up.

You can get an idea of how to start a conversation about aging transitions by clicking on the these titles to read a couple of our more popular blog articles “The Talk - Part 1" and “The Talk - Part 2".  

If you do not have family nearby, or find it difficult to talk to your family about your needs related to your own aging or an aging parent, you can also call on a family moderator who has walked numerous clients through this process. If you would like information about our family moderator services, please send and email to info@ACEfiduciary.com with a little background about your family’s situation.

Question for Discussion: Have you had “The Talk” with your parents and/or adult children?  How did it go? You can post your thoughts in the moderated comments section below.

Do You Have A Digital Spare Key?

The Government Can Enter Your Private Electronic "House" But Your Chosen Financial Agent Could Be Committing A Felony If They Access Your Digital Assets for Your Needs.

Recent news reports of the UK surveillance of Yahoo user's private webcam chats and video posts makes it clear that governments have the ability, motivation, and resources to violate our privacy in the electronic world.  Read here for some background.    

Whether or not you agree with the government being able to tip toe through your private electronic data, what about your named Executor or Financial Agent? 

If you became incapacitated or have a brain injury leading to cognitive impairment, would you be able to pay your bills and manage your money in the future?  If you were to pass away or become incapacitated, who would be able to handle the areas of your life that you now handle using electronic data? The proliferation of digital assets and how your named agent may need to access this data has been a hot topic in wealth and estate forums, for good reason.  Consider the following scenarios.

You are a budding author like Stieg Larsen who dies before your work is published. You write your novel on a PC which is backed up to cloud data storage. Who would have rights to access your PC as well as any content you have kept on the cloud?  Or what if you are a professional photographer, who could access and sell the photos you store in Dropbox?  Do you have a gaming account which can be exchanged into US currency?  Or maybe you set up an on-line site that accrues advertising income?  If you manage health care via an online access, would your health advocate be able to access this information in order to help you?

Some accounts are just for your use and benefit while you are alive. When Bruce Willis thought he would leave his large ITunes collection of music to his kids, he found the agreement with ITunes allowed for only his use without transfer. Other accounts build value which may need to be accessed by your Executor or Personal Representative or other financial agent for your benefit. An increasing number of us store valuable data or information through electronic devises and which require account access via passwords in order to use them.

Legal experts have begun to encourage people to take a digital inventory.  This can help you or your agent keep track of access and usage, but it may not be enough to give your named agent the legal right to access this data.

You might think that if you were incapacitated, a friend or relative could access your digital accounts with only your say so. Or, you may think that your named agents; a Power of Attorney, Trustee or even a court – ordered Conservator or Executor could access on-line accounts for the benefit of the estate or person.  This is actually not the case. They might do this informally to help you pay your bills or to collect advertising income for your use or for your estate. If they do, they could be committing a felony. 

There are a couple of federal laws that might prevent your named agent from helping handle the electronic or digital assets in your life.  Both of these laws were enacted in the 1980's before the internet became ubiquitous, the CFAA and The Stored Communications Act created laws that were designed to create protections against computer hackers and misuse of digital accounts.  You can read the US law here.

Ironically, all government agencies have moved to electronic delivery or demand for electronic filing. For example, the US Treasury shifted all paper delivery of federal benefits to electronic deposits during 2013. The IRS expects almost all returns to be filed electronically. While the government moves all services to web-based systems; which require profiles, passwords, etc., these two laws make it illegal or difficult for your named agent to help you.

At the same time, state law is very slow to address the arena of digital assets. It is state laws that give your named fiduciary legal right to handle your affairs. These same laws do not address the practical need to manage digital assets.  Internet providers and digital asset providers have been slow to acknowledge the role of a duly appointed fiduciary.

Instead, when companies address the rights of an estate administrator to your digital assets or access for any reason, their policies usually make it harder for your named agent to take legitimate action. Although, recently  Facebook announced changes to its user policy for deceased users. This new policy acknowledges that certain people may have the rights to memorialize an account – check this article about Facebook. The providers of cloud storage, social media and email accounts base their authority to allow or not allow access to an account by a personal representative on the user agreement.

Just like you want a trusted friend or neighbor to have a spare key to your home, it is prudent to create a digital "spare key". This is a digital inventory and a way to secure and update passwords. There are a number of methods to do this but none are perfect.  No matter the method of inventory, your digital assets and your agent will be safer with a secure method of saving the keys and a written authorization to access.  You can see a list of digital inventory service providers by clicking here.

Ask your named agent or professional fiduciary if they utilize a "DOLA" or contact us to help you set up a digital inventory.