Astor elder abuse sentencing

Not even the rich and powerful can get away with elder abuse--Brooke Astor's son was sentenced today. It's a minimum sentence, but he's also 85 years old, so 1-3 years is a long time for him. My guess is that he couldn't say no to his wife, who unfortunately was not prosecuted. He was set to receive a large inheritance anyway, and was receiving money from his mother also, so if he (or his wife) could have been content with what they had, he would not be facing this. I'll be anxious to see what kind of sentence his attorney receives, but in the meantime, you can find the story here.

Justice

A couple of thoughts and my observations about our justice system, inspired by today's sermon at church...I think the system ought to be about finding the best resolutions to problems, hence RRJ's slogan "Providing practical solutions."

One of the things I've noticed, and I know I'm only one of many in a long line of past observers, is that the poor are denied access to the justice system--the system, for the most part, requires a good deal of money for access, in fact. This means, then, that the "haves" take advantage of the "have-nots", and I was particularly repulsed by an example of this a couple of weeks ago--a couple of attorneys and their client went way beyond the bounds of decency and the Probate Code, apparently figuring their victim wouldn't have the resources to fight it. We found a way to help, but there are plenty of others I can't.

I'm encouraged by the Hon. Aviva Bobb's efforts to improve self-help access in the downtown Los Angeles probate court--now that she's retired, I hope it continues. It's made a tremendous difference in helping those with conservatorship needs who didn't have much money or had cases where it wouldn't have made sense to pay attorney fees.

The rise of mediation has also helped in giving clients a forum to voice the emotional aspects of a case, not just the legal ones, which usually means faster and cheaper settlements. Once they feel their concerns have had a fair hearing, they're more inclined to agree to a solution that addresses them--these concerns may not have ever had a chance of being addressed by the legal system. It reminds of me of my disillusionment on the debate team in college--my professor stressed that it was a truth-seeking activity, but it seemed much more a truth obfuscation activity to me...an adversary system in court doesn't always, and can't always, produce accurate and just results, so finding a solution with the help and true understanding of those involved in a lawsuit has a better chance of producing a just result.

Estate planning for your online accounts

I read something on this subject the other day, and realized it's something that ought to be mentioned in every estate planning session with clients--planning for online access to your accounts, and listing the accounts, for the right people to access after your death.

There are services to keep the information, and who to allow access to it, after proof of your death, like Legacy Locker and Deathswitch. It's important, as many accounts might not even be found without them--I can think of several of mine that have no paper trail--even the tax information is sent online.

I remember being interviewed for a TV news story a few years back on the family of the Marine killed in Iraq, who had to sue Yahoo (successfully) to gain access to his email account--I was asked (before the family won in court) what else the family might do, and I suggested hiring some hackers. I still laugh at the reporter's horrified expression, and she asked, "Really?" It turns out that's what a lot of people do, and have to do, if other options aren't available--perhaps the most famous case was that of a museum in Norway, which put the call for help out to hackers after one of its employees died, taking some passwords with him to the grave.

Michael Jackson will

I won't be the only estate planning & probate attorney writing this, but I have to wonder why Michael Jackson's attorney wrote up a plan that ensured probate. The will provides that his estate be given to the Michael Jackson Trust--why didn't he just skip that step and fund the trust during Jackson's lifetime? It would have ensured the privacy that Jackson seemed to want. Now his financial details, the beneficiary details and creditor claims (there will be some strange ones, I'm sure) will all be public record.

With the large size of Jackson's estate, I don't think probate fees would be much higher, if at all, than trust administration fees, but now the whole family drama will play out in a public way. For most people, including Michael Jackson, a revocable living trust is the best foundation for an estate plan.

Another opinion on how long our frugality will last

I came across this on one of my favorite sites this morning, The Oxford Club's Investment U:

Will Frugality Remain?

I tend to agree, that those forced to be frugal will not make it a habit any longer than they have to. I do think some people have been shaken enough to build up large reserves, but how many?

How long will the new frugality last?

In talking with my financial advisor on Friday, he said he and his company believe this recession will take longer to get out of than the common wisdom says, based on their belief that people have learned from this crisis and will not go back to their free-spending ways.

Despite my home's, investments' and 401k's low values, I'd like to believe him, but I told him my experience with my own clients in probate and bankruptcy cases says otherwise. I'd really like to see people living within their means, and saving enough to continue living their current lifestyles or better in retirement, and I'll continue trying to convert people to this way of living.

On the other hand, most people have a hard time delaying gratification, so I have to believe that when money's available to them, they'll spend it.

I remember people sewing and mending their own clothes in the 70's, and growing their own alfalfa sprouts and vegetables, and then replacing the vegetable gardens with pools in the 80's. I remember a lot of articles announcing the end of the extravagant 80's during the early 90's recession, yet extravagance came back in style awfully quickly.

At best, I think some peoples' lifestyle deflation changes will become permanent, and that's not a bad result.

Customer service--law firms need it too

I remember talking to a friend in 2007, as the economy was starting to turn, and him saying he was ready for a downturn, because that's the only time he can get some good customer service. I have to agree--people are much more solicitous of me now, but I have to wonder what they're thinking when they're the same ones who had no problem taking advantage of me when times were better.

The real estate agent who took advantage of one of my clients for a bigger fee and wants more listings like nothing's happened...the lender who continually gets my social security number wrong and makes me a non-person when I call to correct it and can only call back to solicit a new loan--this was especially good, as they told me to access my account online to fix it, but I can't access it because it's under a social security number I know nothing about!...my bank, after being bought for the third time, wondering why it's losing existing customers after they deny our business loan for their mistake! They could admit the mistake was theirs, but not to their underwriters, who think I'm a deadbeat. And yet I run into their employees who ask, every time, why I don't bank there anymore--I'm tired of explaining the story except to say that the new bank gets it, and has for many years. Bless them, the old bank employees still end their conversations with "Why don't you come in about a loan or an investment account?" When I'm ready for some abuse, I guess I will.

I think Geico's on the right track with their new ads regarding their customer and claims service--we as customers and lawyers have gotten used to insurance companies being in the business of denying claims, and believe me, I've heard some wild justifications from insurance adjusters for denying claims--it's why we still have lawyers to get people the money they rightfully deserve.

Ahhh, lawyers. I know we don't have the best of reputations for customer service either, but here at Russakow Ryan Johnson, we're trying. I do empathize with own clients who have faced similar problems, whether with other attorneys or perhaps even our own. If it's here, the problem should be solved quickly, as I'm reminded every time I'm on the wrong end of bad service.

Lawyers are here to find a solution to your problems, and to do so in a way that financially benefits you--why would you spend more to solve the problem than it would cost to ignore it? And you should have the peace of mind that comes with someone working on a solution to your problem. The legal system is stressful enough without your own lawyer(s) adding stress to it.

Retirement planning

With the huge beating we all took last year and this in the stock market, I've been wondering how much I'll need to adjust my savings to still retire by 67. I'm still on track, but it certainly helps to know just how much I'll need to live how I'd like to live.

Apparently, it may be less than I thought. I heard Clark Howard on the radio yesterday say that he could live on $8,500 a year! He qualified that by saying that he does spend more now because of his wife and daughter, but I'm wondering how the $8,500 would be spent? Does that include a paid-off house, with just maintenance, taxes and utilities? Eating soy with grass clippings for nutrients? Even public transportation costs are going up, so perhaps that would allow for walking/biking with occasional $5 Metro day passes. And it would probably involve the thrill of finding great buys at thrift stores--I'm still using a broiler I found in college at the Eisenhower Hospital thrift store in Rancho Mirage. I'll have to dig deeper at his website, though, to find out where the $8,500 would go--your comments and suggestions are welcome.

Am I bondable?

There's another reason for paying attention to those Fico score and credit report commercials--your credit history and past judgments, not to mention jail/prison time for fraud, can make it difficult to qualify as an executor or conservator in probate court. (By the way, the truly free credit report is at www.annualcreditreport.com.)

When a probate is filed to transfer assets at death, or a conservatorship to take care of an incapacitated person's assets, the person in control (executor, conservator, trustee, fiduciary) in most cases has to post a bond with the court to ensure that the beneficiaries are covered in case that person steals or loses the assets. Asset losses don't happen often, but when they do, the bond's a great thing!

It's an expense of the estate, along with insurance, taxes, attorney fees and court costs, and is calculated as a percentage of the estate.

Here's what the bond companies look for: your net worth (to recover against if the bond is paid to the beneficiaries), your work history, judgments against you, tax liens, bad credit marks and charge-offs, and convictions if they relate to financial impropriety. If you have any of these in your past, and you're seeking appointment as a fiduciary in probate, let your attorney know up front that you may have a problem so you can find solutions before the hearing.

Some solutions may be co-signers on the bond, blocked accounts and joint control accounts if you have minimal assets or a questionable credit history.

Boring is the new sexy

That's the headline from Trusts & Estates magazine, normally a boring (yet highly informative) read. It seems anyone who didn't lose nearly as much money as everyone else is now exciting. I don't know if I'd go as far as "sexy," but then again, money has throughout history made people more attractive--if you happen to have any left, expect some flirtatious behavior from others. A local trust company is proud to point out it lost only 25% for its clients last year, not 40%. And my condolences for having to sell your Ferrari if you were in a hedge fund last year, as some last 90% of their value!

I think the same holds true in estate planning--a return to the fundamentals is in order, as peoples' main concern has always been making sure they're taken care of when they're disabled, their spouses are taken care of, and their family is taken care of. We attorneys and advisors often get caught up in the excitement over new and different ways to lessen taxes, but clients rightly want these only if they are part of taking care of them and their families. Someone was asking me about captive insurance companies the other day, which are a useful planning tool for some, and in my research I found far fewer of these actually exist than I would have thought. This seems true for most things--when I ask attorneys how many exotic plans they've actually done, they usually need one hand or less to count them.

That won't stop me from recommending items beyond the most fundamental for many clients, but more important is making sure the fundamental planning is in place--do you know what happens at your disability? At your spouse's disability? At your deaths? Is your family protected from creditors? From unscrupulous trustees? From spouses who don't like to work? From government entities looking for ways to cut costs by denying benefits? Are your assets in your trust to make it work? Most of the plans I review can't even get past these initial questions, so it's important to know that the basics are covered. It's not sexy, but it is reassuring at night.