Filed under: Uncategorized — Christopher J. Berry @ 4:12 pm
I cannot stress this enough. I know of but will not name financial groups who hire sales people to market one-size fits all “living trusts” with paid sales people who use high pressure tactics to try to push this “plan” on seniors. Often, there is not attorney present. They will charge one price, I know one group that charges $2,250 for their “plan.” They will market these “plans” to seniors and retirees through seminars where they provide the food. They use this as an in to try to sell annuities. Often times the attorney will not even meet with the client. In addition to their high pressures seminars, they flood the market with advertising, even going as far as to put out a sham newspaper geared towards seniors.
Be careful if you are attending a seminar on estate planning and their is no practicing attorney there, only financial “professionals” and salespeople. They may say “the attorney is so busy” that’s why he is not attending.
All I will add is what Mike Cox, the Michigan Attorney General has posted on the Michigan.gov site.
Beware of “One-Size-Fits-All” Estate Plans
A revocable living trust can be an important tool in estate planning for many people. A revocable living trust is a trust instrument that may be changed during the lifetime of its grantor, the person who sets up the trust. It is called a “living trust” because the maker is alive, in contrast to a testamentary trust, which is not effective until after the death of its maker. By itself, the living trust instrument is probably a legal document. However, a subject as important as estate planning should be discussed with trusted professional counsel, including your attorney and financial planner.
In recent years, several for-profit companies have begun marketing living trusts over the telephone, by postcard, by in home sales pitches, and in regional meetings, often held at restaurants or in hotel conference rooms or even senior centers and public libraries. Likely targets of the promotional marketing are senior citizens. The one-size-fits-all trust forms being sold at these events vary greatly in quality and may not be appropriate for your individual estate planning needs. Contrary to some sales pitches, not everyone benefits from a living trust.
Sometimes customers pay exorbitant fees for these trusts. A typical charge by one of the trust kit companies is $1,995.00 per trust. Trained salespersons may exaggerate consequences of failing to buy their products, or may employ high pressure tactics to close a sale and not disclose that the thick, expensive-looking finished document is only a living trust “kit.” (A “kit” is a prepackaged, standardized form document—it is not tailored for the customer’s particular circumstances.) The following tips can help consumers in making a wise decision before purchasing a living trust:
1. Consumers should be wary of salespersons who call on the telephone, send a postcard, or appear at the doorway offering living trusts.
2. Do not be pressured into purchasing a trust based on a phone call, or the in-home sales pitch of a salesman, or immediately following a seminar. Before making any purchase decision, consult with a reliable professional with the necessary background to help you decide what estate plan is best for your individual situation, rather than relying on someone whose primary interest is a sales commission.
3. Before buying a living trust from a stranger, call a local lawyer and ask him/her what they charge for preparing trusts. Often the kit price is two or three times greater than what a local lawyer would charge. Those selling trust kits rely on the public’s apprehension that attorneys are costly.
4. If you already have a lawyer, discuss the trust kit offer with him or her before buying.
5. Be wary if a trust salesperson promises specific results or dollar savings. Costs of probate and attorney fees vary greatly from state to state, and according to personal circumstances.
6. If the trust salesperson promises a lawyer will review the customer’s documents, demand the name of the lawyer and check with the State Bar of Michigan to make certain the lawyer is licensed to practice in Michigan.
7. If the salesperson says that his or her company or the living trust being sold is recommended or endorsed by AARP, do not buy! AARP does not endorse or recommend any living trust product at this time.
8. Do not give personal and confidential family and financial information to a salesperson, even if the salesperson promises it will be passed on to a licensed lawyer. Meet with or discuss the matter with the lawyer personally.
9. Watch out for companies that sell trusts and also try to sell annuities or other investments. Under the guise of setting up a living trust, financial information may be disclosed to sales agents who earn high commissions by “moving” existing investments into others being sold by the living trust company.
10. If the salesperson says part of the trust cost will pay the lawyer’s fee, do not buy! A lawyer may not split a fee with the salesperson or with the trust company.
11. Discuss whether you can get your money back if you are not satisfied, and get the promise in writing.
12. If you encounter problems later, first contact the company or the lawyer and ask for a refund.
You can read this consumer alert at: http://www.michigan.gov/ag/0,1607,7-164-34739_20942-44727–,00.html
Filed under: Uncategorized — Christopher J. Berry @ 9:11 pm
- www.indoff-officeinteriors.com | Jim Gonyea at Indoff Inc. A one source, full-service solution for your office furniture needs; whether it be for one ergonomic chair, or the furnishing of an entire office building. They also provide space planning & interior design. Phone: (248) 597-4783 | Fax: (248) 597-4784.
Filed under: Uncategorized — Christopher J. Berry @ 9:10 pm
No. This is one of the largest misunderstandings clients have who are interested in estate planning in Michigan. Let me say it again so it is clear, a will does NOT avoid the Michigan probate system. I have discussed some of the ways to avoid probate, often the best way is through a properly drafted and funded revocable living trust, but a will does not. Think of your will as your ticket to the Michigan Probate system in all of it’s glory. Sure, the court systems follows your wishes with a properly admitted will, but it does not avoid the process.
Filed under: Uncategorized — Christopher J. Berry @ 9:08 pm
Our firm assists clients as trustees in administering Michigan Trusts. Some tips for wraping up a trust include the following
- Carefully and accurately read the terms of the trust agreement, as well as the powers and limitations of the trustee’s power.
- File final tax returns.
- Determine the shares for the beneficiaries and heirs after any expenses.
- Prepare any conveyances or liquidate the assets.
- Distribute assets and obtain receipts from the beneficiaries and releases and indemnifications when appropriate.
- Prepare the final report and provide it to any interested persons.
- Get court approval of the final report when it’s appropriate.
If you have any questions or want more information, contact me at (248)-865-4700.
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Filed under: Uncategorized — Christopher J. Berry @ 9:17 pm
As a Michigan estate planning lawyer, occasionally I will meet with a potential client in need of estate planning who is very sensitive to price. Prior to meeting with them and finding out their goals and the complexity of what they want to accomplish, I have no idea what the price of a comprehensive estate plan will be. Estate planning for me and my firm is not a “one-sized fits all” proposition. Each family, individual and business is different so each estate plan is also different.
Everyone says they just want a simple will, or simple plan, but they don’t understand the hidden traps, or complexities that need to be overcome to meet their goals.
What are you paying for by preparing an estate plan, especially when you use a lawyer who’s main focus is estate planning? Is it the documents? No, because you can download or by forms off the internet for less then $50. Better yet, and this was new to me, use someone else’s trust document and just change the names.
What you are paying for is a) the expertise b) the counseling c) the documents d) peace of mind that your planning has been done right. That peace of mind that it’s been done right is elusive and difficult to show value of.
The best way to demonstrate it is to look at examples where it has not been done right. I will take a real world. Just recently there was an error in a family’s estate plan that cost a special needs child nearly $800,000. The way the documents read is that this special needs child had a trust that was only funded with $34, when most likely the trust was supposed to be funded with $800,000 of the deceased’s estate. That is an expensive mistake for a family. That one example of the price you can put on peace of mind, not only for you but also your loved ones. That is who this planning is for. I feel comfortable saying that to set up an estate plan ahead of time would have been much cheaper then the $800,000 cost to this decedent.
Filed under: Uncategorized — Christopher J. Berry @ 9:16 pm
The other day after paying $4+ dollars for gas I was surfing the internet pricing out a new hyrbid car. Not that I am buying a car right now, but I was fed up with the price of gas. Well, I like leather seats in my car. So I was also looking at the price of upgrading from a standard package to a package that included leather seats. Around this same time I had a potential client balk at the price of an estate planning package that would meet all of their goals and protect their children.
Then it struck me, to upgrade from a cloth package to a leather package in a car was actually less than an estate plan for this family that would protect their children from creditors, predators, bankruptcy, the children themselves while also putting the affairs of the parents in order, avoiding the 3%-5% cost of probate, and many other benefits. All for less cost then the 7 years you will be driving a new car to experience leather seats. Mind boggling when you think about it.
It’s odd what people value and what people say they value.
Filed under: Uncategorized — Christopher J. Berry @ 9:12 pm
At our firm, estate planning is more than just preparing documents. Estate planning is about providing expertise and counseling from the beginning of our client engagement through the funding of the trust, if a trust based estate plan is used.
What is meant by “funding of the trust?” It is the process of putting assets into the newly created revocable living trust. In Michigan, this is accomplished through a few various strategies depending on what type of asset is being used. If a residence is going to be put into the trust, then a deed will be used. If life insurance is used to fund a trust, then a beneficiary designation form is used.
A good analogy that I use with my clients is that a trust is like a suitcase. Once we have executed the documents the suitcase (trust) is created. The next step is to put things (assets) into the suitcase (funding the trust). While this is not legal work per se, I still assist clients by providing explicit instructions on how to work with each asset along with opening myself for any questions regarding specific assets.
This is a key step that you will not know how to properly execute if you download your forms from the internet or buy a software program or, and this one was new to me this week, copy someone else trust and fill in your name. This is where you cannot put a price on the counseling and expertise of a Michigan estate planning lawyer. Otherwise you have an empty suitcase (trust) with nothing in it (not properly funded). You not only fail to utilize the trust to pass assets directly to beneficiaries, but you also fail to avoid Michigan probate.
So, make sure your trust, however it was created is properly funded and continues to be properly funded through annual meetings with an estate planning attorney.
Older Posts »
August 14, 2008
Filed under: Uncategorized — Christopher J. Berry @ 4:11 pm
Regardless if you choose a trust based estate plan or a will based plan, you need to choose someone to operate as a trustee or personal representative of your estate and assets. This person plays a critical role in the administration of your estate, such as making certain tax elections and keeping records of the accounts.
Choosing a personal representative or trustee in Michigan is a tough decision. The person or institution you choose must have demonstrated integrity, diligence, capacity and ability to act as well as the ability to remain loyal even where there may be conflicts of interest.
A trustee or personal representative wields a great amount of power. One solution and safeguard to their abuse of power is to build in what is called a “trust protector,” or someone who has the ability to remove a trustee or personal representative and appoint someone else.
August 12, 2008
Filed under: Uncategorized — Christopher J. Berry @ 4:15 pm
The word “probate” is derived from the Latin phrase “to prove.” The legal definition of probate means a court process by which a certain instrument is proved to be your Will. Typically when people use the word “probate” they are talking about the whole estate administration procedure. The transfer of assets of the deceased to his or her heirs. Technically, “probate” only refers to the process of administering assets through the court system.
The first reason Michigan Probate is viewed as an evil is the emotional connotations attached to death and the legal proceedings. People have difficulty dealing with the emotions in the process.
Anorther reason is that almost every family has a story about a disastrous result which occurred when someone passed and their assets had to be probated. Deep dark secrets can come to light in the public proceeding. Remember, Michigan probate is a public court proceeding.
There is also a financial reason why Michigan probate is viewed as something to be avoided. It can be expensive. Not only through legal fees, but also court costs and taxes if proper measures are not taken ahead of time.
Remember a will does not avoid the probate system and does not ensure that your estate will be administered smoothly. There can be public, nasty, will contests in probate court.
Taking all these reasons into account, it is no wonder that many clients choose to use a revocable living trust to avoid the probate system in Michigan.
Filed under: Uncategorized — Christopher J. Berry @ 4:14 pm
In this day in age of increased divorce rates and multiple marriages in Michigan, it is not uncommon for there to be a situation for a married person to have descendants from prior marriages. Often, this can cause conflicts after your death unless your spouse has adopted your children while they are young.
The problem arises because you have a decision to make, leave assets to the spouse and possibly disinherit your children (what’s stopping your spouse from remarrying after your passing and freezing out your children?). Or leave your spouse high and dry in favor of your children.
Through a trust based estate plan it is possible to plan for the spouse while still protecting the inheritance of the children. This can be done by creating trust that in essence “locks up” a portion of the assets for the benefit of the spouse while living, then to the children. But the spouse does not retain full control of the assets in this “family” or “locked up” trust. An important consideration is who you appoint trustee of any trust where there is provisions that “lock up” any of the assets.
Alternatively, separate assets can be used to fund each of the goals. For example, life insurance could be purchased and put into an irrevocable life insurance trust (ILIT) to ensure that beneficiaries use the portion alloted to them properly, by your own terms.
Regardless, the most important take away is that with multiple marriages, it is important to take these factors into consideration and visit an estate planning attorney for counsel.
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