Posts Tagged ‘Annual Review’

The Problem With Michigan Trust Mills

Written by Christopher J. Berry, Esq. on October 31, 2008 – 10:03 am -

A financial planner friend of mine had me review an estate plan of a couple the other day.  This couple had their estate plan done by one of the many “trust mills” in Michigan.

By trust mill, i mean a set up where they only meet their attorney once (if at all), and there is little to no customization done for an individuals estate plan.  In other words, it is just a fill in the blank estate plan.

Typically, people are put into one of these “estate plans” by unreputable financial professionals who will tell potential clients that they can have a trust based estate plan with unlimited revisions for a set price.  One way they do this is offer an “Estate Planning Seminar” where they will have an example trust in a pretty binder, then tell everyone they can have their plan done for a set fee, say $2250.  This epitomizes a one-size fits all approach to estate planning, that doesn’t take into account the actual needs of the client.  Typically, salesman use this trust as a loss leader to sell clients annuities.

As an estate planning attorney who actually values his clients, there is no way i would be able to quote a fee with out knowing exactly what the clients goals are and how complex it will be to meet those goals.

Back to the couple I met with.  In addition to the usual problems with trust mill prepared plans, they also had three very important issues that I raised with them.

First, as a married couple, their residence was funded into the trust.  In Michigan, we have what is called tenancy-in-the-entireties, which is a special designation created by the state for real property.  This status gives married couples added benefits against creditors, predators, the IRS, and lawsuits.  Well, someone, either the financial professional or attorney, told the clients to fund the residence into the trust, thereby destroying the added protection the couple had as married couples.

Second, the couple both had what is called “springing” powers of attorney.  This is a counseling question to determine the type of financial power of attorney to use.  After counseling the clients, they realized that they were in the wrong type of financial power of attorney.  Luckily, they have not yet had to rely on it.

Third, their healthcare directives were out of date and not valid.  This attorney who prepared their documents promised to stay in touch every year to review their estate plan (which is supposed to be free, including amendments).  Well the attorney never did.  So, I pointed out the changes necessary to bring the healthcare directives up to date.  Our firm has a systematized membership program called Foundations that clients can opt into that will maintain their plan through the years.

The good news, the couple was able to see the mistakes and correct them before they had to rely on the faulty documents.  The bad news, the couple is going back to the original attorney to have the documents corrected, since they have free changes for life.

You get what you pay for…

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Posted in Advanced Health Care Directive, Estate Planning, Foundations, Living Trusts, Personal Reflections, Powers of Attorney | No Comments »

Major Life Events; It’s Time To Review Your Estate Plan

Written by Christopher J. Berry, Esq. on July 23, 2008 – 7:50 pm -

Losing a job is a major life event. With the Big 3 making job cuts and Chrysler announcing today another 1,000 jobs will be lost (read here), it is important to remember that any major life events trigger a need to review your estate plan.

With job loss there can be changes in retirement accounts.  Any time there are changes in title to accounts, such as rolling a 401k from an old company into an IRA, there needs to be a review to make sure that with the new account any trusts are properly funded and any beneficiary forms are designating who they should designate. Failure to do so can lead to unintended consequences such as disinherited heirs.

Major life events (job loss, job changes, divorce) can be difficult to deal with, but it’s important to make sure that once the dust settles, everything is still in place the way it should.

Our firm has created a systematized process to review estate plans (called Foundations), similar to how you have dental check ups, to make sure your estate plan still achieves the goals you desired when you originally created it.

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Posted in Estate Planning, Financial Planning, Foundations, News | 1 Comment »