Stephen Covey, famous author of the 7 Habits of Highly Effective People, has died at age 79 today.  He is survived by his wife, Sandra, nine children, 52 grandchildren and great-grandfather of two, according to CNN.com.  He passed away from injuries sustained from a bicycle injury.

There are some important lessons that we can learn from Stephen Covey as it applies to estate planning, both from his personal situations as well from his teachings.

I read the 7 Habits of Highly Successful People many years ago and one of my big take aways was his concept of quadrants and how people spend time putting out fires, sharpening the saw, etc.  Quite often taking action on your own personal estate plan may not be one of those crisis’ that call for your immediate attention.  Too often the reason clients start thinking about estate planning is that they are going on a vacation, they’ve had a death in their family, or they’ve received a medical diagnosis.

Estate Planning is one of those things that is best done when not in crisis mode.  Linking it back to Stephen Covey, if estate planning is undertaken during a crisis situation there will be a rushed aspect to it where you might not be able to fully spend the time thinking about who’s going to serve certain roles, such as trustee, successor trustee, power of attorney, patient advocate designation, etc.

But if estate planning is done in quadrant two, so to speak, then the proper estate planning goals can be fleshed out, discussed, mulled over.

Which brings me to lesson one:

Lesson One of Estate Planning based on Stephen Covey: Plan ahead with your estate planning, think quadrant two.

The next important take away from Stephen Covey’s situation is his family situation and how I would think about his planning as a Michigan estate planning lawyer helping a client with Stephen Covey’s family make up of a wife, nine children and his grandchildren.

If Stephen Covey was in my office we’d be looking at a plan that would provide for his spouse while she was still alive, as well as providing for the children and grandchildren if his spouse were to pass away.  Most likely we would look at using a seperate trust based estate plan with proper disability documents.  Most likely, Stephen Covey would have a taxable estate, where we may have to do advanced planning integrating irrevocable trusts.  Of course, probate avoidance would be a key part of his plan.

Also, if Stephen Covey had a large amount in his retirement account we may look at setting up retirement plan trusts to manage those retirement accounts for the benefit of his kids and grand-kids, where due to the minimum required distributions (MRD’s) for younger individuals, the accounts may grow with interest larger than the MRDs.

Which brings me to lesson two:

Lesson Two of Estate Planning based on Stephen Covey: Estate Planning may seem simple, but every situation is different.

The last lesson from Stephen Covey’s situation stems from how he passed away.  Stephen Covey ultimately passed away from a freak biking accident.  It wasn’t planned, didn’t fit into their life, they didn’t have it on the calendar.  Lesson three is simple and I share it with my clients all the time.

Lesson Three on Estate Planning from Stepehen Covey: Life Throws Curveballs, Plan Accordingly.

Often current events make certain topics top of mind, if you have questions about estate planning for your family, please call our Oakland County Estate Planning law firm at (248) 481-4000.

As a Michigan estate planning and elder care attorney, I try to stay on top of news articles referencing estate planning.  Some are good, some are bad. Forbes has a pretty good article on the Seven Major Errors in Estate Planning.  The author starts out commenting on how “It never fails to amaze me that so many otherwise savvy individuals, many of whom have there financial lives otherwise buttoned-up use poor judgment (or no judgment) when it comes to their estate planning.”  I’d have to agree, I’ve seen many wealthy individuals who have most of their ducks in a row, but little to no estate planning.  Or estate planning that was put together by an estate planning attorney, but wholly inappropriate for their situation.

The author goes on to list seven different areas where people make state planning mistakes.

Not Having a Plan

Many people come into our office with no estate plan at all.  Often people will ask when is a good time to initially think about estate planning, and my answer is when they have things or people they want to protect.  For example, with the birth of a child you would want to put together an estate plan that provides for your child in trust, as well as puts guardianship provisions so that your child does not go into a foster home.

Online or DIY Rather than Utilizing a Professional

There has been a noticeable uptick in people using online legal preparation software such as Legalzoom or Suze Orman.  Unfortunately, relying on these web-based DIY options can be a recipe for disaster.  Just look at some of my previous blog posts on the concerns with creating your own last will and testament.

Failure to Review Beneficiary Designation and Titling of Assets

Too often people will buy a living trust based estate plan from an estate planning attorney, but they will not fund it properly or fail to keep up with their funding.  I say “buy” a trust based estate plan, because all they’ve done is bought a set of documents.  It very well might not be worth the paper it was drafted on if it’s not funded properly.  That’s the difference between a product based estate planning attorney versus a counseling based estate planning.  If you’re going to go through the estate planning process, make sure you fund your trust properly.  That’s why our office will do a funding audit, to make sure that your revocable living trust is funded properly.

The author lists the rest of the mistakes here: Seven Major Errors in Estate Planning.

Yes, apparently our US Government wants each of us to put together a “Social Media Will.’  I’m an estate planning attorney in Michigan, and advise clients on how to plan for their assets, including digital assets.  So, when I stumbled upon a blog post by USA.gov, I was intrigued.

Reading the blog post (How and Why You Should Write a Social Media Will), I kinda liked what I saw…

First, they outline how social media is not becoming a large part of everyone’s daily life and the issue of what happens with all that “stuff” if you were to pass away.  Lord knows, I have enough Facebook, Twitter, Email, Flickr, SmugMug accounts that it’s hard for me to keep track, let alone anyone else if something were to happen to me.

Next they outline some steps that should be taken to ensure that these digital assets are handled the way you would want if you were to pass away.  They recommend that just like a traditional last will and testament (or living trust!) handles your affairs for your physical belongings and financial assets, there should be a document that spells out how you want your online identity to be handled as well.

The idea of the social media will, is that like a traditional will, you’ll need to appoint someone you trust as a personal representative/trustee/executor.  That person will be responsible for closing your email addresses, social media profiles, and blogs after you are deceased.  Then that person should take the following steps:

• Review the privacy policies and the terms and conditions of each website where you have a presence.
• State how you would like your profiles to be handled. You may want to completely cancel your profile or keep it up for friends and family to visit. Some sites allow users to create a memorial profile where other users can still see your profile but can’t post anything new.
• Give the social media executor a document that lists all the websites where you have a profile, along with your usernames and passwords.
• Stipulate in your will that the online executor should have a copy of your death certificate. The online executor may need this as proof in order for websites to take any actions on your behalf.

The timing of this was ironic, since just yesterday I blogged about how to manage and find a Deceased Loved One’s Digital Assets.

So, what do you think?  Do you have a “Social Media Will?”

Society with the increased used of the internet and the idea of “going paperless” is relying less and less on the real world and hard copies and putting more trust into the digital, virtual world or even the cloud.  When a loved one passes away and you are a trustee or personal representative trying to gather assets, this can present some interesting problems and quirks.  As Michigan estate planning and probate lawyers, I wanted to share some tips with you.

Know What to Find

Digital assets can include things like internet accounts, data, contractual and ineffectual property in the digital world.  You should be looking for things like email accounts, bank statements, investment accounts, credit cards, bill paying accounts, Facebook, Twitter, online gaming, online gambling, e-books, and retail.  Additionally, check for cloud based documents such as Dropbox, Google, Box.net, or SugarSync.

Get Your Google On

Do a Google search for the loved one’s name.  This may help reveal different accounts, such as LinkedIn, Twitter, Facebook or other social networking or internet sites.  It’s amazing what you can find sometimes from a simple Google search.

Get Access to An E-Mail Account Quickly

Most people keep a spreadsheet on their computer of passwords or pass codes.  See if you can find a list stored on their computer.  If you can’t, take a stab at guessing some passwords, worse case, bring in an IT professional.

Get Access to E-Mail The Slow Way

If you are unable to access your loved one’s e-mail account, the slower option is to access it by contracting the e-mail provider.  Generally, sending a scanned copy of the death certificate along with letters of authority to the e-mail host will grant access to the account.

Do Not Close the E-Mail Account Immediately

Similar to keeping the “snail” mail coming to check on bills and accounts, it is important not to immediately shut down your loved one’s e-mail address.  This can be an easy way to find out about any bills, accounts, etc that your loved one had as the monthly emails come in to the account.

Close Your Loved One’s Other Accounts

It is important to close out the other accounts of your loved one, including Netflix, Pandora, iTunes, and especially anything that has a monthly fee associated with it.  However, be careful with certain digital assets because you need to know the value.  For example, some World of Warcraft accounts could be worth thousands of dollars and should consider being inventoried and then possibly sold.

Put Your Loved One’s Digital House in Order

Hopefully your loved one planned properly for their digital assets, for example a master document with all the relevant accounts and passwords could be stored with one’s estate planning documents.  This must be kept safe just like any other assets.

Special thanks to ICLE and Attorney Michele C. Marquardt.