We talk about A Thank you letter from the IRS (Fictional, of course) and our new site www.EZNCWills.com

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“These days, people are often too busy to spend time at an attorney’s office and are reluctant to pay legal fees to get basic life and estate planning information when they can get the information online in the comfort of their own home,” Senior Attorney Jeffrey G. Marsocci said. “To do their own research, people are more and more searching the Internet for answers, and we wanted to make it as easy as possible for people to get this information all in one place.”

In addition to making things easier to get the right information, using the www.EZNCWills.com website cuts down on costs for the client without sacrificing the personal knowledge and skill of having an attorney in the process… something lacking in computer-generated document services like Legal Zoom. “By cutting down on the personal time the attorney has to spend reviewing the basic legal information, the attorney can instead focus on actually providing legal advice to the client and not charge as much as most other law firms. Plus, we can eliminate the possibility of the documents not being signed properly because the signing of the documents can be done at the Raleigh or Asheville offices with no additional cost.”

A Simple Will Package through www.EZNCWills.com includes a Simple Will, a Healthcare Power of Attorney, A Financial Power of Attorney, a Nomination of Conservator document and a Living Will/Declaration of a Desire for a Natural Death. The price for an individual is $275 and the price for a couple (married or not) is $500 to get these documents for both people. But until December 31, 2011, when providing payment information, simply tell the caller there is a coupon code “NCBASIC” and the price will be lowered to $249 for an individual or $449 for a couple. If more than a Simple Will Package is needed, for example the desire to avoid probate using a revocable living trust, then we would refer people to our main firm website at www.livingtrustlawfirm.com.

Topics covered:
- Domestic Partner Planning Websites Launched
- Jeff Marsocci Joins HRC Board of Governors
- Circle K Haunted House a Success

Wish to review our past newsletters, can’t find your older ones Click Here

The Human Rights Campaign was on hand to provide information on its organization and national legislative efforts, but the focus was squarely placed on the possible North Carolina Constitutional Amendment that could ban marriage equality and, possibly, impact other steps partners could use to separately gain equal rights. “The NC Senate and House versions sound similar but have radically different possible interpretations,” Jeffrey Marsocci said. “The House version states merely that marriage is only between a man and a woman but the Senate version outlaws other benefits that are typically associated with marriage. Under the Senate version, it is possible, and even likely, that municipalities would not be able to give partner retirement benefits to their employees, and corporations would not be able to provide health insurance benefits for partners of their employees.”

In fighting the possible marriage amendment, The Human Rights Campaign has donated significant amounts of money and put six paid staff members “on loan” to Equality North Carolina to bolster its statewide efforts. “North Carolina has long been a beacon of hope in the South as the lone state without a constitutional ban on marriage equality,” Jeffrey Marsocci said. “And now that this is at risk, equality organizations and efforts are coming together in our state to fight it. I’m glad to see representatives of both HRC and Equality NC at Drag Bingo getting the word out since this legal issue affects many of the same people who support efforts to help with the Alliance’s work in helping people living with HIV and AIDS.”

As usual at Drag Bingo, the Kiwanis Young Professionals of Greater Raleigh provided the condiments for hotdogs and veggie burgers, including the usual ketchup, mustard, mayo as well as shredded cheese, diced onions, and the now-famous homemade coleslaw and chili. The way the Alliance of AIDS Services-Carolinas operates Drag Bingo, a combination of cash from businesses and other “in-kind” donations from businesses and non-profits ensures that every dollar spent by attendees at Drag Bingo goes to support the Alliance’s efforts. This includes the donated condiments and volunteers supplied by The Kiwanis Young Professionals of Greater Raleigh.

In order to maximize efforts and share volunteering burdens, it was also recently announced that the Human Rights Campaign’s Triangle Steering Committee will begin sharing the condiment and volunteer activities at Drag Bingo with the Kiwanis club. While both organizations may eventually share volunteers and supplies, they will initially take responsibility of separate Drag Bingo events. HRC’s first event will be Viva Las Vegas Drag Bingo on August 15.

For more information on Drag Bingo and the Alliance of AIDS Services- Carolinas, please go to www.dragbingo.com.

In today’s world of DIY (do-it-yourself), it would seem there is no easier way to save money than DIY legal services, such as creating your will. In an effort to effectively use the new genre of e-lawyering, a forum whereby lawyers can meet clients and practice online, lawyers are presenting new software programs to help consumers perform legal services themselves. Cost is a substantial impediment for people seeking legal services. So websites such as LegalZoom and Rocket Lawyer appear to be a solution. Due to the minimized costs of these products, people think they can avoid the hassle of paying a lawyer to create a will for them. However, Consumer Reports recently did a study with LegalZoom, Rocket Lawyer, and Quicken WillMaker Plus. They found that these software programs are not an adequate substitute for having a lawyer draft a will specifically designed for each client.

Recognizing that, LegalZoom and Rocket Lawyer have disclaimers that they do not serve as substitute for the advice of an attorney. However, these obscure disclaimers do not deter consumers from using the programs as their sole legal resource. According to a review by everydaysimplicity blogspot, as long as a consumer is certain that there are no complications, then the consumer may proceed with caution. “You won’t know the quality of your legal deed, will, or incorporation documentation until they are put to the test. If you feel secure that you’re not dealing with any special issues, then LegalZoom or RocketLawyer should hopefully pass that test for you.” But how would you know if your situation is legally simple unless you are an attorney? Also, most jurisdictions do not have the same laws which may cause unforeseen complications with the programs. Even Charley Moore, Founder of Rocket Lawyer admitted that should a problem or complication arise from the consumer-drawn document, the consumer will have to consult a lawyer – which Rocket Lawyer stipulates it can provide upon request.

Apart from those problems, Legal Zoom has been facing legal issues in some states due to the legal community’s distrust of its methods. In 2008 a North Carolina State Bar committee concluded that LegalZoom was engaging in the unauthorized practice of law and sent out a cease and desist letter. A Connecticut Bar Association task force filed a report with that state’s Department of Consumer Protection claiming that LegalZoom was operating illegally. In Missouri, LegalZoom faces a class action suit. The suit alleges that LegalZoom, by offering legal documents and instructions over the Internet, is illegally practicing law. In Los Angeles Superior Court, a class action filed in May accuses LegalZoom of unfair and deceptive business practices as well as the unauthorized practice of law. The lead plaintiff, Katherine Webster, the executor of an estate and the trustee of a living trust, claims LegalZoom created a legally flawed living trust, requiring the estate to spend more than $10,000 on an outside attorney to fix the problems. The suit alleges that LegalZoom misleads customers about the degree to which its documents are customized and about their quality, compared with those prepared by an attorney.

Consumer Reports conducted a blind test on all three software programs and the results were less than satisfactory. (Taken from Clarksville Online. 28 June 2011.)

“ First a CRMA (Consumer Reports Money Advisor) reporter created profiles of individuals from three different New York families. Then, she completed the interviews as if she were those individuals, drafting nine wills in all. The wills and interview records—with product identification hidden—were sent to a law school professor who specializes in estates and trusts, who judged each product on how comprehensive the interviews were and how much information was provided, and on the overall quality of the wills. Here are a few of the problems common in all three software:

• “Outdated information. CRMA tested the products in mid-March, and two referred to federal estate-tax limits that were outdated as of January 1st.
• Insufficient customization. The products rarely referred in detail to state estate law. So they offered no guidance on how states treat wills that, for instance, fail to leave property to children born after a will is signed. (WillMaker Plus doesn’t do Louisiana wills because of the state’s unique estate laws; Rocket Lawyer provides a Louisiana will but recommends that consumers consult a lawyer.)
• Too little flexibility. CRMA found it hard to distribute property the way they wanted to. WillMaker Plus, for instance, provided arbitrary age and time limits for some provisions. The program wouldn’t let a child’s trust go beyond age 35 or set up conditions on bequests in a will, such as stipulating that a child receive money only after finishing college.
• Too much flexibility. After you finish the Rocket Lawyer interview, the program allows you to edit your completed will. LegalZoom lets you put anything you like in the special-directives section. Both features could lead you to add clauses that contradict other parts of your will.
• Incompleteness. None of the packages created a special-needs trust. Only WillMaker Plus gave information on registered domestic partnerships and included a pet trust in its main interview. None of them touched on “digital assets,” such as ownership and management of server-stored documents and photos. And none dealt with specifics on compensating executors. (LegalZoom sells a stand-alone pet-protection agreement. Rocket Lawyer says it’s adding pet and digital-assets options this summer. And WillMaker Plus 2012 will address digital assets.)
• No way to handle some tax issues. None of the products explained how to structure trusts to reduce estate-tax liability. With the current federal estate-tax floor mirrored in many state laws—$5 million per person, $10 million per couple—most people won’t have to worry about federal or state estate taxes. But some states set limits far lower. New York, for instance, levies estate tax on assets of $1 million or more.” “Write Your Own Will: Consumer Reports Monday Adviser Tests Three Software Programs.”

The money saved by using these cheaper software programs is not worth the mistakes, omissions, and situations these services might result in; mistakes that may require the family engage a lawyer when it’s too late to do anything about it. Nevertheless, a positive outcome of the emergence of these new DIY software programs is that it has made lawyers more competitive. It is now easier to find a lawyer that can create an extremely simple will that’s specifically designed for each client at about the same price as these software programs. To avoid any unanticipated complications should a consumer choose to make use of these programs, they are advised to have a lawyer review the will to ensure it is comprehensive and exhaustive. Even so, consumers should keep in mind that the DIY fees plus having a lawyer review these documents may end up costing more than simply letting the lawyer create the document in the first place.

We also learned a few interesting facts about Jack Daniel himself, including that he was only 5’ 2”, never married, and ended up dying after kicking the company safe in frustration and getting an infection in his toe that spread. It was also interesting to learn that his nephew Lem Motlow, who took over and owned the distillery during Prohibition, avoided becoming a bootlegger and instead helped overturn Tennessee’s laws by instead becoming a state senator. And while Lynchburg resides in a “dry” county where sales of alcohol remain illegal, there was a special provision created by Tennessee legislature that allows Jack Daniel’s to be sold at the distillery, but only in special commemorative bottles that can not be found outside of the state. While we were able to get some pictures, photographs were not allowed in most of the distilling areas. For a free tour, it was well worth driving out of our way.

On the Sunday before the conference we were able to spend some time with staff members from The Estate Plan, including CEO Geri McHamm and new marketing specialist Zoe Avery and her husband Rodney. What Kathy and I thought would be a quick breakfast turned into lunch because we happened to go to The Loveless Café, which has been sometimes dubbed the world’s most famous breakfast restaurant. Our timing wasn’t the greatest and we ended up waiting for an hour and a half. Once I tasted the fried chicken, I decided that it was well worth the wait, and it is no wonder it is considered “world famous”. It truly is one of those American small business success stories that managed to stay local. The original owners started out selling friend chicken to people traveling along the highway, and once word caught on they had to rearrange their house to provide several eating rooms and establish a few motel units. Today, they also have a country store and several other shops (that incidentally make the waiting for a table much more bearable). While many people commented that The Loveless Café should “go franchise” and establish restaurants across the country, a group of Nashville citizens wanted to see the Café never lose its charm. They ended up buying the restaurant from the Loveless family with the stipulation that it remain local. Thankfully, they do have an online store where you can get things like dry rub and chicken seasonings, and while it’s the end of Summer, I plan on grilling well into the Fall with them.

While it was nice to take a few days off, Monday morning came early and the programs started. While there were plenty of sessions and I could bore you with details on every one, there were three that have particular relevance to many of my clients—IRA Trusts, Trust Funding, and Special Needs Planning.

What should be one of the most used estate planning tools in recent years has been largely ignored, and I was pleased to be able to share the concept with the attendees. One of the reasons I wrote The IRA Trust: Turning Inherited Retirement Accounts Into a Financial Dynasty is because there is very little knowledge in this area and my one page, legal pad drawings only left clients intrigued but with questions. In outlining the concept for the advisors and attorneys, I went through the different options with avoiding probate and expanding tax opportunities for clients. The basics are:

• Your clients can name their revocable living trust as a beneficiary of their retirement accounts (usually each other as the primary beneficiary if a couple and the trust as the contingent beneficiary, or with the trust as the primary beneficiary if not part of a couple.) This means that all of the different contingencies, age limits, and beneficiary protections from creditors, divorcing spouses and Medicaid apply. However, all of the taxes have to be paid in a short amount of time and the money now has to be placed in taxable investments.
• Your clients can name their beneficiaries directly without the trust, and now they have the tax option to place the funds in an Inherited IRA and take distributions over their lifetime and pay the taxes on the distribution. Meanwhile the investments that remain in the Inherited IRA grow tax-deferred. However, all of the all of the different contingencies, age limits, and beneficiary protections from creditors, divorcing spouses and Medicaid that come with the trust are lost. Also, there is nothing to prevent the beneficiary from taking all of the money out early despite any tax consequences.
• The third option is to create a separate IRA Trust and name that as a beneficiary, and the beneficiaries you choose are now beneficiaries of the trust. The trustee of the trust controls the distributions so it will not be wasted, and now all of the different contingencies, age limits, and beneficiary protections from creditors, divorcing spouses and Medicaid also apply. And if the beneficiary legitimately needs money for an emergency, the trustee can provide it. Basically, your heirs get the best of the asset protection and tax worlds for the beneficiaries.

Sounds like a great opportunity for clients with significant retirement assets, doesn’t it? It is, and this is one of the things I’ve been discussing with trust clients in annual review meetings this Summer with many setting one up. Between the presentation at the Advanced Institute and the review meetings, I’m out of my entire stock of books and had to place a large order with my publisher. The book can be purchased online at www.livingtrustlawfirm.com/media .

The second relevant presentation was done by Eli Combs, a financial advisor from Texas who shares my concern about trusts being properly funded. (He also shares my love of White Castle, which we were able to get after the conference but before his flight back, but Jeff and Eli Go To White Castle is another story for another time.) In short, funding revocable living trusts is making sure that all assets are properly titled and/or have the right beneficiary designations assigned to avoid probate. Each asset is different, but unless all of the assets are handled properly, the revocable living trust will not avoid probate for those assets.

The story I usually tell to illustrate this point is a gentleman created a revocable living trust in California through an attorney affiliated with The Estate Plan. When he found out he was dying of cancer, he liquidated everything (or so we thought) and placed all of his money into a savings account in the name of the revocable living trust. He then moved to North Carolina to spend his final days with his daughter. Once he passed on, I was called in by the daughter to help settle the trust. I reviewed the trust and discussed that his savings account was his only asset, so I was able to tell her that all she had to do was get three cashiers checks to close the savings account so she could pay herself and her two brothers. She said (paraphrasing) “That’s great! That’s wonderful! What about the three stocks Dad had and liked to look up online every day. Those weren’t in the trust.”

While the savings account had more than $600,000 in it, the stocks had a collective value of about $12,000, so, relatively speaking, it was a minor asset. However, it then took eleven months to get the account through probate, the three stock companies were a nightmare to deal with, and we ended up having to charge $3,500 for our services (and, believe me, we low-balled those fees because we felt bad). In addition, the stocks were tied up and unavailable for sale during the market crash of 2008 so they lost about a third of their value. In all, the family got less than $4,500 of the $12,000 because these three stocks were not in the trust. It probably would have taken a few hours to retitle the stock accounts in the name of the trust, but by ignoring the “minor” assets probate and the market took almost 2/3 of the value away.

To help our clients’ families avoid these problems, we are now aggressively trying to get all of our trust clients to come in once a year to review their assets and update them on changes in the law. As an encouragement, we are also only charging $100 for these one-hour meetings, which is less than half of our usual hourly rate. While we have already contacted clients by letter, if you have not taken the opportunity to meet with us yet, then please call 919-844-7993 to set up a time for this review. The peace of mind alone is worth the time and cost.

The third presentation with quite a bit of relevance was special needs estate planning, and it was presented personally by The Estate Plan’s CEO Geri McHamm. While special needs estate planning has been a mainstay of my law practice for many years, it was good to get a concise overview and update from The Estate Plan’s top officer. In explaining the two main kinds of plans to clients, it is probably best to go back in time to a previous article I wrote in April of last year:

• “There are two main routes to take in creating a protection for a special needs beneficiary through a trust. The first is ensuring that special needs trust provisions are created through overall life and estate planning documents such as wills or a revocable living trust. The second is by creating a separate special needs trust for the beneficiary. Depending on who will be giving money to the support the child, one or the other method should be utilized.
• In creating a complete plan for the parents, special needs trust provisions can be incorporated into the revocable living trust or last will and testament so that any funds left to the special needs child will be sheltered. The trustee appointed, typically a sibling to the child or other close relative, will control all of the funds left to the child after the parents have both passed on. Now the assets are available to buy the items and services the child needs without cutting off support from the government. In creating a complete plan, however, the parents are also outlining how other assets will be distributed to other beneficiaries as well as creating financial powers of attorney, healthcare powers of attorney, living wills and other healthcare related documents. The main drawback with this set up is that only the parents can leave assets to the child through this trust, at least until they have both passed on. This is because the trust provisions are not active until the parents have passed on. If there are grandparents who wish to support the special needs beneficiary, they would have to create their own plans and documents.
• The second route allows for more flexibility in who can leave money to the special needs beneficiary because it creates a trust that is active right away. The provisions are similar to those contained in the special needs section of a revocable living trust, but it is its own separate entity. All of the general life and estate planning documents for the parents must still be done, but instead of the provisions of the Will or Revocable Living Trust creating the trust, they simply name the separate special needs trust as the beneficiary instead of their child. And now grandparents, siblings, or anyone else can name the special needs trust as a beneficiary in their own Wills and Revocable Living Trusts rather than incorporating the special language to protect the inheritance.”

When discussing special needs planning with my clients to protect their loved ones, it becomes all the more relevant in a down economy to make sure that benefits are not jeopardized by incorrect planning. This is especially true since the right planning solutions are actually a lot more stable and consistent over time than the eligibility rules ever were or will be.

While the conference seemed to come to a close too quickly, I think everyone left with a renewed sense of purpose in making sure they did everything they could to make sure that their clients had the right documents in the right place at the right time.

Meeting details:

September 7th and 21st

Patti’s Cafe
Health Park at 8300 Health Park
(across from the Cypress on Forum Dr.)

7:00pm-8:00pm
FREE

call for more information: 919-803-8025 or go to www.rgcmgmt.com

Read our latest Newsletter Click Here

Topics covered:
- Mythconceptions in Planning
- Senior Housing specialists – Relieving the Stress
- Colonial Williamsburg and Principles of Equality

Wish to review our past newsletters, can’t find your older ones Click Here

Remember the newsletters can easily be forwarded to a friend if you find information worth sharing

Topics covered:
- New York Marriage Law Posts Equality Victory If Not New Substantive Rights
- Triad Pride Brings Out Equality Supporters
- Prop 8 “Chewbacca Defense” Fails Miserably

Wish to review our past newsletters, can’t find your older ones Click Here

I started doing a few things very differently, and thankfully Kathy has been helping quite a bit. First, I am now eating smaller portions five times a day. Based on a 1900 calorie diet, I have the three basic meals, but not nearly the same as I used to. For breakfast, I’m having a high-protein yogurt, piece of fruit, and peanut butter sandwich on whole wheat bread. For lunch, I’m having a piece of meat, some rice, and enough vegetables to equal the size of the meat and rice together. For dinner, I’m again having the meat and whole grain pasta along with a big salad. And twice a day I’m having fruit and peanut butter. The strange thing is I’m probably eating MORE food than before, but in three weeks I’ve lost the last ten pounds the doctor said I should.

The second thing I’m doing is reading. More specifically, I’m reading labels to avoid bad cholesterol, high amounts of sodium, and limiting carbs. Good Lord, have you read these things? For some foods, it’s worse than reading the Surgeon General’s warning labels on a pack of cigarettes because you can infer the various ways you’re going to die based on the nutrition details. One of my former favorites is Hardee’s Monster Thickburger. Here’s are the highlights that pretty much mean I’ll never have one again:

• 1320 calories, 860 of them from fat
• 95 grams of fat, 36 grams of saturated fat
• 210 milligrams of cholesterol
• 3020 milligrams of sodium (there are only 40 milligrams of sodium in a Diet Coke)
• 46 grams of carbohydrates

While I liked the Thickburger, I don’t like it enough for it to compose 70% of my daily caloric intake and more than seven times the amount of sodium I should have in a day. And I don’t mean to specifically pick on Hardee’s and the Thickburger. The point is I never would have realized just how bad it was for me until I took the time (and responsibility) to look up the nutritional information. Hardee’s also has some healthy alternatives, and it’s just a matter of choosing them.

Finally, I’ve also started to see my tastes change to correspond with the new diet, and my energy level has gone up without my formerly high intake of caffeine. As I sit and write this, the thought of having a brownie or piece of cake does not appeal to me at all. On the other hand, I’m actually looking forward to having apples and peanut butter (the good stuff, not the main brands with all of the added sugar.)

Well, I am The Estate Geek, so I have to relate this somehow to life and estate planning. There are a few points that work both for nutrition and estate planning:

• More information leads to making better choices, but you have to stop and do a little investigating
• There is a lot of publicity around things that may not be as good for you but will lead to profits for someone else, like fast food chains that highlight the bad stuff and probate attorneys who recommend Wills over a revocable living trust
• A well-thought out plan can be executed with much better results than simply rushing through to get something in place (like picking up the first thing that catches your eye in a restaurant as well as simply asking an attorney to put together the Last Will and Testament everyone talks about)

One of our slogans is to “stay safe, plan ahead, and enjoy life.” I’m glad that I’m finally applying the stay safe and plan ahead aspects to my own nutrition and will hopefully have a lot more years to enjoy.