Its the Lawyer’s Fault

I was fired today. So were the other lawyers working on an estate. I believe the perception is we were making the simple will complex. Mind you, this was day two of the estate for this lawman, and just a few weeks after the probate was opened.

The problem originates with how we count money; yours, mine or ours? In lawyers terms; your separate property, my separate property or community property. Depending on what chair you sit in the perception is different.

Now that is an educated comment. Now instead the estate will be divided on the basis of ignorance, force of personality, and power structures in the departed’s family. Might makes right.

Never you mind that. It is the lawyers fault for pointing out the law.  Shame on us for charging a fee to help them. From the chair they sit in the perception is all lawyers are just there to use up the estate.

Not so. Most of the estates lawyers I practice with or against are second generation lawyers not really in it for a quick buck. That was the case today.

Recently I was asked how long has it been that a non-lawyer could just go to court and explain his side and have the judge make a ruling without the assistance of counsel. “About a thousand years” I said. Sure you can go, but the number of trip wires that have been laid down in front of you are so numerous you will not recognize yourself or your case on the other side.

Here is how this happened. We The People make a rule, but the rule doesn’t seem right in all circumstances, so We The People start erecting exceptions to the rule and before you know it, it is so criss crossed and cratered you do not really know what it means. If you have any doubt try reading the tax code.

You can blame it on the lawyers if you want. Frankly I was a bit surprised Jimmy Buffett didn’t blame it on us rather than a woman in his famous tune Margaritaville.

Some people claim there’s a lawyer to blame,

But I know, its my own damn fault.

Things Happen Along the Way

In 1519 Ferdinand Magellan departed Spain with 25o officers and crew in five ships. He didnt tell the crew, but the objective was to sail around the world. In 1522 only one of the original ships limped into the port of Seville with 18 of the original Europeans on board along with 3 Indonesians they picked up along the way.

What happened? Stuff. They ran into cannibals on the southern tip of South America, the Pacific was a lot wider than they had expected and they ran short of food, and Magellan himself was killed in the Philipines.

What has this got to do with estate planning? Would you leave on a perilous voyage without a will?  Before the author of the account of the First Voyage Around the World left, he executed a will. That seems prudent, but there is no record if the remaining 249 Spaniards, Portuguese and Italians on board did the same.

This is pretty much what I encounter each day in my practice; a patch work of estate planning executed in bank lobbies, stock brokerage offices and sometimes a lawyer’s office. Why is such a mess?

Conditions change. Emotions wax and wane. People have ideas about what the people they leave behind “need” without considering what really happens when application of Dead Man’s Statute prohibitions on hearsay are made, or the impact of an inheritance on a disabled person without a preexisting Special Needs Trust really means.

We are on a perilous voyage. All kinds of decisions made in the wake of your ship may come back to haunt you. Think about it.

Empty Grandmas Accounts Before She Dies to Avoid Probate?

I wrote this post because I saw this question as a top search on my dashboard.

The answer is no. There are several problems with this approach.

1) Crime. That is what this is, Crime. Go to Jail, Do not pass GO, do not collect any $200. You will be characterized as “financial exploiter” at least if you do this in the state named after the first President, and that means you fall under the “slayer statute” and as we all know, slayers do not inherit. Or at least I think we all know this.

2) Breach of Fiduciary duty. There I go again with all that legal stuff. The trouble is that “legal stuff” can get you in trouble, if not in jail, at least sued. Lets say grandma put you on the account “just in case”. It is still not your money. While the bank is authorized to allow you to remove it, the disposition of those funds really have to be for grandma’s benefit and not those who are left here on earth when she passes. She put you on the account because she trusted you, and when we start hearing the word “trust” all kinds of duties attach.

3) Joint Tennant with Right of Survivorship. Lets say grandma opened this account with you and personally, not the bank employee, checked the box that says this or shortened to JTWROS. That is a will substitute that means when she dies the money is yours without probate. Note the timing. It will not be a defense to say that you will inherit this money some day anyway through this non-probate transfer. What if she needs the money before then?

I suspect there are more reasons not to do this but the post is getting too long. You may have good reasons to avoid probate, but this approach is too dangerous. In layman’s terms, don’t take things that don’t belong to you. You don’t have to go to law school to know this. I think we all learned this in kindergarten.

Living and Dying in Casual Wear

We have become too casual in America. We no longer dress for dinner, church, or work. Open collar is the look. Someone decided we all wear jeans on Fridays at the office, (everyone except me that is). OK fine, call it freedom or liberty or whatever you like but there is some harsh legal environments we really can’t be causal about.

You may find yourself in a bank, opening a checking and savings account. You are wearing Dockers and a shirt from Lands End.  You may find yourself in the personnel office of your new employer filling out forms about all kinds of things, including your 401(k) dressed in the style of the corporation, which in Seattle means you shop at REI. You may find yourself in your living room, with a life insurance sales man, and a lot of paper, and a lot of distractions and might even be in your pajamas. You may say to yourself, well, what do these have in common?

Death. You are probably making dispositions of what happens to the money you are handling in each situation. Not so casual, is it?

And Death changes things. Conduct that one would never believe possible from friends and neighbors, people you have trusted for years suddenly become crazed with greed when a windfall appears available. Naming your best friend as the beneficiary of any of these instruments tests him “to do the right thing”. He might fail the test. He might decide perhaps you really intended to disinherit your kids. There is little your lawyer can do about it.

Many of us in this practice draft in “superwill” or “blockbuster” terms into the will to fix all these issues with the will, clearly designating where property is to go if you have casually checked some wrong box in scenarios as listed above, but they can’t fix all of them, depending on the State’s statute on the topic. Generally these  super terms in the will won’t fix your causal approach to death if you open that account, are hired at a place that tolerates the REI look or have a visit from the life insurance salesman after the date you have executed your will.

Life and Death. It is time to get serious when you think about both. Dress for the event.