Probate and Trust Planning Basics in 2014!

PROBATE AND TRUST PLANNING BASICS IN 2014!

HELLO FRIENDS AND COLLEAGUES:

So it has been awhile due to many recent office changes since we have addressed basic trust and estate issues so, in my infinite wisdom, I decided that a few refresher courses and update sessions are in order so expect that in the coming weeks.  Before we get started, I want to announce that in the coming weeks we will also be rolling out a series of videos, hosted by yours truly, designed to bring clarity to a number of common legal concerns experienced by you, my valued clients and friends...so stay tuned for website and social media updates.  A weekly podcast is also in the development process.

Anyhoo, I always introduce the concept of probate in the United States by time traveling back to small town America.  In the old days, a family member would pass away and the other family members would go to the butcher, who was also the probate judge, and he would tell them to sell dad’s plow and pay the livery stable, sell the tools and pay the general store, and so on and so and so forth.  Today, the butcher is no longer the probate judge.  Judges are often overworked and booked…and the creditors are not the livery stable and general store…they are often national corporations, or international.  This all leads to probate having becoming an extremely complicated and burdensome process.  You can expect that even the simplest probate cases will take at least 6 months to complete and complex cases can take several years or more.  The legal fees generated in probate can extend easily into the 10s of 1000s and upward…ranging between 3 and 10% of the total value of the estate.  The answer to the entanglements of probate is the revocable living trust.  When you title your property in the name of a revocable trust instead of keeping it in your personal name, you may avoid the probate process if everything is done correctly…to assure things are done correctly requires the assistance of an experienced estate planning attorney who has handled 100’s of probate and trust matters and has this perspective of the process.  When a trust is properly in place and assets are properly titled in the trust, then a private trust administration may take the place of the public probate administration and the difference in my experience is night and day.  A trust administration involves your hand picked trustee notifying all beneficiaries, conducting an accounting and privately distributing assets to the beneficiaries in accordance with the specific terms of the trust.  The trustee may be assisted by professionals and this is a totally private process that may be completed in days or weeks rather than months at a fraction of the cost of probate.  In addition, creditor issues or disputes that can occur in probates may be entirely avoided by using a revocable living trust.  Having dealt often with the hurdles in probate, I have seen first hand the benefits of effective, professionally assisted trust planning.  Remember that canned trust documents don’t get it done because addressing the specific estate concerns and titling the assets is half the battle…the form pushers don’t want you to know this…  The good news is that you can start customizing your revocable trust planning today and protect your family from the burdens of probate.

Additionally, trusts afford protection for you and your beneficiaries on a number of other fronts which may include estate tax protection, disability planning, divorce protection, and creditor protection.  These are all advanced planning concerns that should be addressed by a professional when considering a revocable trust for your family.

I hope this first session helps provide perspective because this is my passion and the passion of my new and improved estate planning team...to provide you and your family with the tools needed to navigate the most difficult seasons in life.  Stay tuned for more in the weeks to come.

Never hesitate to contact our office with questions.

Until next time friends.

Demystifying Legal Services - Bringing it home.

Hello Friends and Colleagues!

So here at the Gibbs Law Office, we have been working hard to evolve as an office in order to adopt all of the characteristics that I've been writing to you about in recent months. This final lesson in the Demystification of Legal Services series concerns how to spot a law office that is willing to evolve with the trends toward valuing the customer and not just valuing the law firm...

Years ago, the status quo in legal services was characterized by dark mahogany desks and chandeliers in the lobby which was likely manned by a stern faced secretary. The emphasis, which was somewhat obvious, was that the the client was privileged to work with the distinguished firm.  The client was informed of how the firm operated and there were few if any options available to the client.  If the client could afford the retainer deposit, he was afforded the privilege of being "accepted" as a client. 

Fast forward 50 years.  No longer is legal information carefully preserved for those "in the know" behind those mahogany walls.  Legal tools and information is widely available with the click of a mouse.  The abundance of legal information is both a positive and negative phenomena because while the availability of information is a positive there is in increased likelihood of misinformation.  Anyhoo, progressive law firms have adapted to this new environment in order to meet the new expectations and demands of clients.   

For example, in our office we now recognize our clients as customers and our services as interwoven with customized legal products, and there are no mahogany desks. Our shift in emphasis hits home on a couple of levels which include a philosophy that we are privileged to serve our customers and committed to providing cutting edge legal products.  Our office "demystified" includes 4 areas of practice which are Wills, Trusts and Probate, LLCs and Corporations, Real Estate and Business Closings and Contract Review.  Our products are "Florida law firm products" and not "self help" and we will be specifically introducing "on line" Florida Wills, Trusts, Powers of Attorney and Medical Directives which may be initiated on our new and to be revealed website at reduced pricing.  All of our services will include a flat fee "value based" pricing system so there is no more mystery and no surprises. 

It is an exciting time in legal services and I consider it a privilege to provide you, my valued friends and colleagues, with a fresh perspective and alternative.  Stay tuned for exciting updates in the weeks to come.

Until next time...

SJG

Demystifying Legal Services 2014!

Hello Friends & Colleagues!

After a brief hiatus due to general mayhem of the Holidays, here we are again with another red hot article on the demystification of legal services. 

So we're coming to the end of this series and I've been brainstorming about what aspects of law practice are most important to you as our clients and professional partners?

Well having talked with many people about their experience with lawyers, it seems like the communication process with your lawyer may most important of all. After all, you are hiring someone to partner and work with you to address your legal area of concern.  Perhaps you are in the midst of a great deal of stress due to a legal dispute or divorce. Perhaps you need to take steps to complete some critical estate planning or business planning documents.  Maybe you are buying your Florida dream home and need contracts reviewed or a real estate closing performed. 

Whatever your concerns, it seems as if, based upon the feedback I receive, that communication with your lawyer must be open and available as well as clear and effective. Unfortunately it also seems like this area often easily can fall by the wayside. 

So as always, I will attempt to give you some constructive suggestions in this area.  First, hire a lawyer that you feel understands and empathizes with your concerns. Most people can feel whether someone is sensitive to their concerns and it is important because hiring a lawyer is a relationship. Second, hire a lawyer who is willing to tell you the hard truth.  Is this a contradiction?  Absolutely not...

Sure, we all like to have our egos massaged or sunshine blown in our direction but this isn't what you really want from your lawyer. You need a professional partner who offers you practical sage advice, whether you like it or not, and not someone that only tells you what you want to hear. 

Finally, it is important to make the effort to be very clear with your lawyer about what your concerns AND expectations are.  

In other words do not expect your lawyer to read your mind and do not fall into common relationship trap of thinking..."he should know this...she should have known that."  That thinking doesn't fly very often friends...lawyers are busy people and most really want to help their clients so give them the straight scoop and help them help you by staying engaged. 

Alrighty, I like this one...and I hope you found it helpful AND enjoyable. 

By the way, our office handles real estate closings (commercial and residential) and business closings now and (after some difficult decision making) remains at 8695 College Parkway, Suite 2012, Fort Myers, FL 33919. 

Until next time friends. 

SJG

Demystifying Legal Services - Session 4!

Hello Mumbo Jumbo-ites!

Alas the long awaited fourth session of our series which focuses on clearing up the haze or "demystifying" the veiled and often intimidating world of legal services.  

So getting right into it...there is a major trend toward on line legal services or "document pushers" as I like to call them.  The thing is, there is a place for on line "self help" legal services.  The question becomes whether a lawyer is really necessary and then what to look for in a lawyer to justify the additional expense?  Well in today's lesson, I'm going to attempt to clarify this question for you.

First we need to ask what differentiates a good lawyer from an on line service provider?  Well the answer is that a good lawyer will take the role of a consultant in a particular area of expertise.  A good lawyer should probably have effective communication skills and you should feel comfortable interacting with him/her.  In my opinion a good lawyer will be committed to educating the client and guiding the client toward the appropriate solution for his/her concerns.  A good lawyer will have a sophisticated information gathering approach as part of this process and will demonstrate expertise in drawing out information that is important to the decision making process.  A good lawyer will utilize information obtained from the client to create a customized solution for the client which should be based upon the clients unique circumstances, values and yes...budget.  In my opinion a good lawyer will also take a 360 degree approach to each client's circumstances when designing an appropriate strategy, solution or path toward a solution.  

So what does all of this say?  Essentially, if you find an attorney that demonstrates the above characteristics, you've most likely found a professional who sets them self apart from a "canned" advisor or form pushers.  Enough said, getting off my soap box...

Second, are there times when an on line document service will work?  This very much a "case by case' question but in general on line documents lend themselves to "very simple boilerplate" kinds of documents such as a "quitclaim deed", simple "probate avoidance revocable trust" or "power of attorney".  Remember that even simple documents can involve unforeseeable issues or legal consequences that an experienced practitioner would see immediately.  So in summary, find a true professional or venture forth concerning "basic" matters at your own discretion.

Until next time friends,

SJG

 

Do I really need a lawyer? Demystifying Legal Services - Lesson 3

Hello Friends and Colleagues!

So back to uncovering the mystical world of law practice brought to you like no other law firm...

So here's the deal...many lawyers are calloused or unresponsive when it comes to empathizing and explaining things so that clients can understand.  There are a couple of reasons for this, one of which unfortunately (in my experience) is ego...  After years of schooling and practice in a given arena many lawyers seem to feel that it is beneath them to have to explain themselves or the subject matter to client.  Often times this problem is unconscious.  Other reasons may be simply that the firm does not realize the importance of educating clients or they are simply not able to do so.   So lesson number one is...

Go with a lawyer and law firm that you feel is both instructive and receptive to you.  A few suggestions are:  

1.  Go with a law firm that assures you that the attorney you spoke with will be involved in your client services "after" you hire the firm for services.  Often times, law firms arrange a meeting with a "rainmaker" and low and behold, after hiring the firm you won't speak to that lawyer again.  Also, you need to be comfortable with the support staff and the philosophy of the firm, in my opinion, as well as the lawyer you met with.  Remember, law offices function in teams.  

2.  Go with a firm that is deeply committed to educating clients and answering your questions.  Many firms, particularly in the wills, trusts and estate planning arena adopt a volume based strategy (in both their pricing and services) to provide the minimum level of service for the lowest cost.  Find a law firm who is committed to service as well as value with emphasis being placed upon the former...cheap attorneys often provide little service.  Also, good firms tend to propose a variety of options for the client to consider regardless of whether the practice area is estate planning, asset protection, business planning, probate, civil litigation or another area of concern.  

3.  Go with a firm that listens to your goals and objectives and proposes to act accordingly...within reason.  Obviously, there are areas in which the attorney is the expert.  However, as an example, how you would like the disposition of your estate (in an estate planning scenario) to occur is generally your call and not the attorney's decision.  I do note that if there are significant estate tax or business tax or other concerns that your attorney may and should advise you strongly in one direction or within certain options.  

So friends, understand that the new wave of legal services is all about client services and client friendly practices.

As a side note, the Gibbs Law Office has joined the "New Wave Legal Group" and our new office is located at 2150 West First Street, Suite 2-B, Fort Myers, FL 33901, so you will be first in line to see some exciting changes in the weeks to come.  

Until next time friends.

SJG

Hello Mumbo Jumbo-ites!

Alas, the awaited 2nd session of our new series entitled "Demystifying Legal Services" which is for the sole purpose of taking the anxiety out of your search for an attorney by giving you an inside view of the profession...cool huh?

In first session, I emphasized doing your own research prior to hiring an attorney.  Further I suggested that you select a competent professional who practices in the area of your specific concern.  Finally, I boldly asserted that you should not being afraid to pay for a consultation to get your preliminary questions answered because "you don't know what you don't know" and this may in most cases be $$$ well spent .

This Session 2 focuses on the ever lurking question of legal fees and how this question must be demystified because it one of the major sticking points faced by many who need professional legal advice.

The question of fees can be very daunting but in the end it can be looked at very simply.  Having spent potentially hundreds of thousands of dollars and the best years of his/her life studying and thereafter sitting for Bar Examinations and Continuing Education on a periodic basis, most attorneys feel a profound need to be well compensated.  The question I would pose to you, my faithful audience, is whether you should be more concerned with an attorney who is not charging what they are worth than the one who comes highly recommended with a price tag.

With that said, there are a few things about legal fees that you should know as a consumer.

First, the old method of billing is an hourly arrangement where the client pays a deposit into a client trust account and the attorney bills against it, usually by .10 or .20 hours and when the trust account is depleted the attorney requests additional funds.  The problem is that this arrangement places the interests of the attorney and client at odds because the less efficient the attorney, the more $$$ he/she makes.  Further, this kind of arrangement creates some anxiety for clients because they never quite know how big the price tag will be at the end.   Still, there are circumstances where hourly billing makes the most sense.  You should obtain an estimate of total hourly billings, if possible, prior to the commencement of services, and determine the hourly rates of the various personnel in the office.  Remember, higher rates may be preferred as they may signify more competent counsel and more responsible billing practices...just saying.

Second, there are new trends emerging in billing practices which are called "value based" or "flat fee" billing and these can be a great alternative, especially in transaction law practice areas such as wills, trusts and estate planning, real estate, business law and similar non-litigation practice areas.  To summarize, a flat fee arrangement will usually begin with a consultation (sometimes free) and a fee for the services will be quoted at that time.  As a consumer, you just need to be sure that you understand what the flat fee will cover and the scope of the services to be performed.  A firm may also offer various hybrid billing practices which should be discussed in detail prior to entering into any arrangement.

Third, a few more tips are that you should determine whether your initial consultation is free and whether your fee arrangement obligates you to pay costs such as recording, mailing or filing fees.  You should attempt to obtain clarity with your chosen attorney prior to the commencement of services.

I hope this was helpful.

Until next time Friends...

SJG

Do I really need a lawyer? Demystifying Legal Services - Lesson 1

Hello Friends and Colleagues!

For a long time, I have wrestled with the modern perception of the stereotypical lawyer.

What comes to your mind when you think about needing a lawyer or hiring someone for legal services?  For many people the feelings that arise may be less than positive...

As a lawyer licensed in Minnesota and Florida, I have no problem admitting that if I were to personally need a lawyer, my thoughts and impressions would include:  stressed, hard to understand terminology, egotistical people, hard to know what to do, will I go broke, etc., etc.  You may have also managed a few positives such as driven, resourceful or smart.  I shudder to ask if caring, compassionate and concerned professional make the top ten list?

The foregoing concerns are all part of the impetus for this new blog series which is representative of my passion to "Demystify Legal Services" for the average person (you) and the general public.  So my goal here is to offer you some tips to help you understand and approach your legal matter as well as what to look for when hiring a legal professional?

Following this logic, the first and most pressing question for many "Do I even need to consult with a lawyer?"  Thus, I will address this question first in todays session with other topics to be covered in future sessions.

It goes without saying that we are firmly entrenched in the information age.  Any professional, myself included, should be aware that information about any topic is immediately available from multiple professional sources on line.

So in deciding whether to hire a lawyer, regardless of your legal concerns, the first question is whether you are "geared up" to become a legal researcher?  I have worked with many a smart person over the years that hired me because they were not so "geared up".  I recommend some initial research for any person "prior to consulting a lawyer" and I also recommend a balanced approach to the research meaning that you should obtain information from a number of different sources so that you're not potentially duped by one person's opinion.  When you have some grasp on your legal concerns and objectives, you will need to make the decision whether to hire a lawyer?

At this point, some might decide to go it alone and/or pursue "self help" legal services.  However, the reason to forego self help at least temporarily and hire a competent lawyer for a consultation (and even to pay for the advice) is that as a non-lawyer/consumer, you do not know what you don't know" and an experienced attorney arguably does know what you couldn't possibly know due to his/her years of exposure to the subject matter.

So the "take away" for today is do your own homework but be cautious about the questions that you may not know to ask.   Be open to filling in the blanks by hiring a competent attorney for at least an review or consult and I recommend someone with at least five years of background in your specific area of concern.  A footnote about paying for a consultation (because most everyone nowadays loves free consults) is that the information obtained during a paid consult may be more complete and more specific to your situation because that attorney will have in the back of his/her mind that you are paying for the legal advice and thus may be more motivated.  Also, you should be aware that there are ethical and moral factors relating to legal advice offered for compensation...just saying.

I hope this is practical and helpful.  Be prepared for more of this kind of information in the months to come.

Until next time friends...

SJG

Should I put my Florida homestead in my living trust?

Hello Mumbo Jumbo-ites!

So I'm fighting off the Florida summer heat and the doldrums to continue to deliver great estate planning content to you offered like no other law firm.  

One question that has often come into my practice, and has actually been the subject of some debate within the legal community, is whether a Florida Homestead should be titled into a revocable living trust?  

This question arises due in large part to the unique homestead protection offered under the Florida Constitution.  First, when we talk about homestead protection in this context we are not talking about the tax exemption status offered by the county of residence.  Rather homestead protection in this context refers to the protection against creditor attachment or protection against liens and/or judgements filed against the homestead by a creditor of the homeowner. 

Florida is unique in offering 100% homestead protection provided the real property meets the requirements of 1/2 acre within a municipality or not more than 160 acres outside of a municipality. 

Where things got a bit dicey for awhile related to an inconsistency between the 4th Circuit which held that homestead protections were secure within a living trust and a Federal bankruptcy case which seemed to suggest the opposite. Consequently many practitioners were opting not to title homestead property  into living trusts for many years. The inconsistency in the court decisions has since been remedied such that now it is clear that full homestead protection is afforded to homestead real property that is held within a revocable living trust.  

As a side note...you need to be sure to understand the difference between a revocable and irrevocable trust because the homestead protection is not available for irrevocable trusts.  

Another nugget...recent Florida legislation also allows a homestead to be afforded full protection if held in a Florida Land Trust...the topic of a future article. 

The take away is that if your homestead is not in your revocable living trust you should have it looked at by your favorite Florida estate planning attorney, hint, hint...

Until next time friends.

SJG

What? Did you say Gun Trust?

Hello Mumbo Jumbo-ites!  

Back again for your monthly infusion of legal wisdom, delivered like no other law firm...

Guns and gun ownership are a hot topic right now so without getting controversial, let's focus on what we all agree upon.  

We all agree that firearms must be handled wisely.  But you may not know that the idea of handling your firearms wisely concerns your estate planning as well as gun safety training, gun storage, etc. 

This brings us to the topic of the NFA Gun Trust.   Essentially, NFA refers to the National Firearms Act which was passed by in 1934 and gave the Congress an authority to tax firearms but had an underlying purpose unrelated to revenue collection which was to curtail, if not prohibit, transactions in certain types of NFA firearms. A $200.00 tax on the making and transfer of certain firearms was considered quite severe and adequate to carry out Congress' purpose to discourage or eliminate transactions in these firearms, also known as Title 2 Firearms or Class 3 Firearms.  The NFA has undergone a couple of amendments since 1934 but the basic provisions (including the $200.00 tax) have never changed.

So what is the purpose of an NFA Gun Trust?  Simply put, NFA Gun Trusts are an alternative to registering the guns in the individual's name and offer a few advantages. The idea is that the trust is the registered owner for NFA purposes (and anyone else in it).  Anyone listed in the trust as trustee may legally possess the guns as trust property. A grantor sets up the trust and may name anyone over age 18 as trustee. The grantor may also list as many beneficiaries as he or she likes and there is no age requirement under Federal law to be a beneficiary. 

The advantages of a Gun Trust are that they are set up to be very flexible as to who owns the guns.  Most Gun Trusts are established as a revocable living trust and thus the trustees, the beneficiaries and the gun ownership may be changed as long as the grantor has capacity.  

The key is that the NFA Gun Trust may be a Living Trust that is the registered owner of the guns and this preserves maximum flexibility and assures the easy passage of the guns to the beneficiaries.  Another key is that the Gun Trust ensures family privacy as does any other revocable living trust. 

Anyhoo, just another shot across the bow:)

Until next time friends...

Anybody psyched about Tax Freedom Day?

Hello Mumbo Jumbo-ites!

So to unpack the concept of this special day on our calendar, and you may note my cynicism, this is the day that the nation as a whole has earned enough money to pay its total tax bill for the year.

So this year Tax Freedom Day is April 18 which is five days later than last year. This may or may not seem significant to you. Let me unpack it some more...

Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 29.4 percent, or 108 days, into the year. Now depending on the state tax rate, the individual date for your state may vary.

Tax Freedom Day is five days later than last year mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect.

Anyhoo, suffice to say that the Americans who pay taxes, emphasis noted, will work on average almost four months just to pay Federal Taxes. I know this is a bit of a downer but I'm all about informing my friends and valued clients and after all...tax day is upon us.

Of course monitoring taxes carefully is important for many reasons including your estate planning, business planning and other asset protection concerns.

Stay alert friends...until next time.

SJG