I am beginning to think this may be a theme I ought to address on a regular basis: As widowhood and remarriage, divorce and remarriage, blended families, cohabitation, common-law marriage, and other family and near-family relational structures become more common, I grieve for the poor judges who must make increasingly complex decisions for families whose inheritance-grantors have failed to create estate plan documents . . . or, having made such documents, have failed to keep them current.

You need to review your estate and legacy plan documents. Regularly.

I told the story of Ernest Samuelson, two months ago.

Now Stan Rule tells the story of the Sikora family: Read the rest of this entry »

“I don’t have any estate, to speak of. I don’t need a will,” say some people.

But if you have children, you should at least nominate a guardian.

And now Jennifer Sawday and Monica Goel, the attorneys who write the California Estate Planning Blog, have provided at least the outline of a “Nomination of Guardian” for your children should you happen to die while they are still in their minority. Read the rest of this entry »

Our estate planning attorney feels very confident about his ability to structure documents that will take care of all contingencies into the future. And so, when he drafted our original documents 10 years ago, he included a number of elements that are characterized as “irrevocable.” Sadly, neither Sarita nor I had any idea what these documents would mean.

Oh, we understood their intent. But since our attorney was so convinced (and convincing!) that irrevocability made our assets much safer than if we created more flexible structures; and because he didn’t ask us the kinds of questions I am learning to ask now; and since our wealth was very much less than it is today . . . we could not imagine the decisions we were making at that time might have the kinds of dramatic implications they might now (supposing our investments’ values were to grow at even a few percentage per year for the next two, three, or four decades or more). But now, we are told, there is little, if anything, we can do to reverse the decisions we made 10 years ago. Read the rest of this entry »

Yesterday, as I read some more in Charles W. Collier’s Wealth in Families, I came across a section where he was interviewing Dr. Lee Hausner, a Los Angeles-based clinical psychologist and author of Children of Paradise: Successful Parenting for Prosperous Families. Collier quoted Hausner as saying,

I believe in a prenuptial agreement because healthy relationships should not be based on finances. A prenuptial agreement is a business contract, and . . . families should protect the business or financial assets of the family. [A prenuptial agreement] protects wealth that was created before the marriage. Signing a prenuptial clearly indicates that money is not the motivation for this marriage. . . .

Families of wealth should talk about prenuptials from the time of their children’s adolescence. They need to explain the importance of the wealth protection philosophy of the family and how this will enable the financial wealth to grow for future generations as well as providing lifetime benefits to the current generation. Family money should have nothing to do with the love between two individuals who wish to marry.

When discussing this idea with future in-laws, it is important to emphasize that, even with a prenuptial, everyone will benefit from this type of financial wealth preservation. There can be trips, vacation homes, educational trusts for children, and retirement security, for example. . . .

Hausner’s comments reminded me of some issues we faced in our family a few years ago when our daughter was about to be married.

The idea that we might need to think about documents like prenuptials had never crossed our minds. But there I was, a couple of months prior to the wedding, holding our annual corporate meetings, and I happened to mention that our daughter was soon to be married. Our estate planning and structures attorney immediately said, “She and her husband-to-be need to sign a prenuptial agreement.”

I was shocked.

Everything I had ever heard about prenuptials said they were simply and merely, if you will, “plans for divorce,” the ethical equivalent of accessories to a crime.

As we talked about the idea, our attorney explained things in a way that I can understand, and I came away with the conviction that he was right: Our kids, as beneficial shareholders of our family business, really do need to have prenuptial agreements, and the need for prenups is there with or without divorce. Instead, the creation of a prenuptial agreement ought to be viewed as a form of business insurance. And for well-meaning couples who enter marriage with open hearts and good faith, the presence of a prenuptial should bear no more ethical weight than the purchase of property and casualty insurance. Read the rest of this entry »

A lot of attorneys, it seems, assume what your goals are when you walk into their office to have them draft your final documents: You want them to save as many taxes as possible, and pass on as much of your estate to your children–your heirs–as possible. But, of course, your goals may go far beyond these things. And, in fact–as is the case with my wife and me–you may not wants to pass everything along to your heirs.

It’s always helpful, when you walk into your attorney’s office, if you already have your goals clearly in mind. To help clarify some of these issues for you, consider the following list. What’s on your mind, and how important are they to you? (If two of these goals compete, which one do you want to “win”?) Read the rest of this entry »

What information can help an estate planning/legacy planning professional create the best plan for you? A document like this could help!

As I noted a month ago, our legacy planner provided a draft “Family Wealth Letter of Intent” designed to summarize in written form what Sarita and I currently understand God’s plans to be for the remaining time we have on earth, and to serve as a guide to our family and advisors to help them understand our life priorities and the things we want to do for our children and for God’s Kingdom . . . during the remainder of our life on earth . . . and beyond.

I indicated I was not happy with the paper as our planner had drafted it. It wasn’t “us.” Honestly, it overemphasized things we would have emphasized far less (and maybe not mentioned at all); it used words and phrases that we would never use; it failed to express the things that we most highly value; and it said several things that, frankly, were just plain untrue.

So I knew I had to rewrite it. And I finally finished my rewrite today. As I wrote a month ago, so now: I share this with you “primarily because I want you to see the full process we are going through. Sometimes the process is easy; often, I’m afraid, it is–or is going to be–very difficult. Most importantly, I think you need to understand that legacy planning is an iterative process.”

So here is my/our “latest iteration.” Read the rest of this entry »

Want to get a basic idea of what information might prove helpful in setting up a good legacy plan? Check out the following draft Family Wealth Letter of Intent.

Our legacy planner, having spent 17 hours interviewing us in detail on the first and second of this month, sent us the following draft “Family Wealth Letter of Intent” [FWLOI] today based on notes taken during our discussion. Read the rest of this entry »