Yesterday I posted a proposed draft copy of an IPS (Investment Policy Statement) our legacy planners gave me. I said I didn’t feel comfortable signing the document without further input . . . from our investment advisor himself and, perhaps, one or two other similar advisors.

Today I thought I would share some of the things I wrote to our investment advisor about the document. So here’s the cover letter I sent him: Read the rest of this entry »

I keep looking for great resources that can explain the basics of what I believe any- and everybody should understand about estate and legacy planning.

I found these two slideshows on Don West Jr.’s blog/website. Good stuff!

West got me thinking that, even though a will may not be the best estate plan endgame strategy, it makes a great base to build upon.

See what ideas these presentations inspire in you. 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 »

A friend of mine is completing the next-to-last semester in her JD–Juris Doctor–degree program. [Juris Doctor: she is studying to become an attorney.] She took the final exam in her Wills, Trusts & Estates class on Monday.

“I did real well,” she said. “I think I may have done better on that than any other tests I’ve taken since I began my studies!”

“That’s great!” I said.

“Yeah. I think it’s because with estate planning, you’re just dealing with straight technical questions. You don’t have to deal with all the messy emotional and relational issues–all the people questions–that are so common in other parts of family law.”

I looked at her in shock. “You’re kidding!” 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 »

David Wills, president of The National Christian Foundation, commented, “The average age at which a woman becomes a widow in the United States today is 57 years old.”

If there is any truth to that assertion (and the U.S. Census Bureau says it is (see Table 5, p. 11, on the referenced document); the age at widowhood for first marriages is 57.8, to be exact!), his follow-up comment deserves careful consideration: “Gentlemen, you have to redefine progeny. Progeny, for you, is your wife, your children, and your grandchildren.” And the implication: Read the rest of this entry »

Too often the estate planning process short-circuits because the testators have never asked themselves, “WHY do I own what I do?” and, “WHAT should I do with it?” Having never understood their motives but only the mechanisms, they never put their estate plan into effect.

They pay the attorney for perfectly good documents, but because they are afraid (rightly) that the documents don’t actually reflect their desires, they never sign them or never fund the structures the documents are meant to create.

And so we return to the truism we hear over and over again: don’t build a house before you have a solid plan. And in this case: don’t try to create an estate “plan” without first defining and understanding your objectives (your objectives, not the attorney’s!). Read the rest of this entry »

We signed a new contract with a legacy planning company. (Hopefully third time’s a charm.) Our first legacy planner was an individual who works pretty much all by himself, with the aid of an analytics firm behind him. The second legacy planner was also an individual, but with a three-person office staff and an apparently rather long and illustrious history of helping numerous wealthy families with their estate plans. . . . But then we ran into some of the issues I’ve been blogging about over the last couple or three months.

We spent about an hour with two representatives from the company (M____, the planner himself, and J____, his understudy) plus B_____, our structures-and-estate-planning attorney.

A somewhat strange experience. M____ and J____ kept wanting to talk about their company and why we should view them as competent and “the right choice.” Which was fine. But I wasn’t worried about whether they are competent, and I wasn’t looking at alternatives or competitors. My main question had to do with whether and why we should hire anyone at all. So I asked them straight up: “Why should we hire you to guide us after our previous two semi-failed attempts at legacy planning? What unique value will you bring that B____, our attorney, and L____, our CPA, are not able to give us?” Read the rest of this entry »