The most common reason clients who didn’t implement estate plans was that the plan “did not satisfy the families’ goals, wants and objectives.” So, here come my multiple, even conflicting, feelings about that statement. Insecurity — am I not satisfying the goals of my clients? Smugness– I work hard to identify my client’s goals and objectives, and most of my clients sign their documents. So, I must be better than the average attorney at this, right?

Well, I think I am better than average in this area. However, this survey supports my gut feeling that saying I’m better than average isn’t saying much. The survey found that most families are uncomfortable with the attorney, finding them to be poor listeners who use too much legalese and can’t (or won’t) explain how the plan helps them meet their goals.

I work hard to avoid legalese, and I think I’m pretty good at explaining complex concepts in ways that are easy to understand. The feedback I’ve gotten on my workshops, books, and articles reinforces my beliefs about that. I’ve given some thought to the client goals that can be met with estate planning, hence my recent post on that very topic. Yet, I don’t think I’m working hard enough to explain to clients how the legal tools connect directly with accomplishing their goals.

Even before reading the results of this survey, I had recently begun using one of the screens in my Panaboard (an electronic whiteboard) to write down the client’s goals as we discussed them in the initial client meeting. As the Private Wealth article notes, clients often can’t articulate all of their goals without assistance from their attorney to crystallize and prioritize them. We often spend a significant amount of time in the initial meeting trying to do just that. I like the process of writing the goals on the screen because it helps clients to see them in black and white. I can also print the screen and use it in future meetings to check in with the client to determine if those goals remain unchanged and the client understands how the tools we are using will accomplish those goals.

Of course, sometimes the client’s goals are in conflict. The survey notes that clients often feel their estate plans are too complex.   Yet the reason the clients consulted estate planning attorneys was to create sophisticated and intricate plans. I certainly encounter this tension with many clients. They express a desire for “something simple.” Yet they have complex needs that require complex solutions.

Of course, I could do a better job of helping clients prioritize their goals. Is a simpler plan that meets fewer goals preferable to a more complex plan that meets more of your goals? And I’m sure I could do a better job of increasing the client’s comfort level with the plan’s complexity.

So, in addition to helping clients with their goals, I’ve got new goals of my own. One is to become a better listener to my clients, and another is to have more frequent conversational “check-ins” to gauge the client’s comfort level with how the plan meets the client’s goals. I’ll keep you posted on how that turns out.

But before I sign off on this post, I had to point out another reaction I had to this survey. I think the way the authors define plan implementation is focused only on the documents. It appears that authors define implementation as signing the documents prepared by the attorney. I would expand that definition to funding assets so those assets are lined up with the plan in the documents. This would be transferring assets to trusts (see this Washington Post Q & A for an example) or partnerships, changing ownership where appropriate, and certainly changing beneficiary designations of insurance, retirement plans and similar assets. Of course, my definition just increases the cause for concern, because if too many clients aren’t signing their documents, it’s a fair assumption they aren’t following through by funding their assets either. I’ll have a future post on funding and implementation.

Estate planning can assure that your assets and legacy pass to whom you want in the way that you want. Without estate planning, your assets will be subject to the laws of intestacy, which are the laws which control the assets of people who die without a will. A description of Colorado’s plan for your assets can be viewed by clicking here, or you can try the “Intestacy Calculator”

Those you want to benefit may be family members, individuals outside your family, or charitable organizations. You may want to benefit different family members than those that would benefit under the state’s plan. Or you may want to benefit the same family members but in a different way. For example, in a second marriage situation, the state presumes that you would leave some of your assets to your surviving spouse and some of your assets to your children. Yet, many of my clients want to ensure that the surviving spouse benefits the most, if not entirely, by the assets. In other cases, my clients want their surviving children to receive most, if not all, of their estate. However, the state’s plan would provide for the children of a deceased child, that is, the grandchildren, would receive the deceased child’s share.

Many people do not want their estate to follow the state’s plan for minor children who inherit. The state’s plan is for the minor’s inheritance to be controlled by a conservator until the minor reaches the age of majority. In Colorado, that age would be twenty-one. Many of my clients are uncomfortable with the idea of giving a twenty-one year old complete access to the inheritance. Other clients want to make sure that a minor child’s parent, who may be an ex-spouse, is not given control of the minor’s inheritance.

Then there are the non-family members we may want to benefit. The state’s definition of family is more narrow than the concept many other people embrace. For example, stepchildren are not provided for in the state’s plan. Some of my clients want to leave assets to an ex-spouse, which can only be accomplished by estate planning executed after the divorce is final. Others want to benefit friends, employees, or other people who have been important in their lives. None of this can be accomplished without estate planning.

Neither can your estate benefit any charities without conscious planning of your estate. Whether it’s a gift of a specific dollar amount or asset or a bequest to a charity that would take place only if your closest family members are no longer living, the state’s plan never contemplates that you would have wanted to provide for anyone but family.

As a closing caveat, I want to point out that estate planning isn’t the same as having a will. Estate planning also includes naming the beneficiaries of your life insurance, placing your assets in trust, or gifting assets while you are alive. As I’ve said before and will most likely say again, it’s not the documents that matter. What matters are the conscious decisions made after careful thought, usually with the aid of counseling from a qualified attorney. That’s estate planning.

First, the long awaited book on estate planning for Colorado residents is now in print. It’s titled Your Legacy: Meaningful Estate Planning. I coordinated the work of several other attorneys to help me write some of the chapters, and I must admit it is terrific. We worked hard so that it is easy to read and understand. It is 205 pages. It is divided into four parts, namely: “Discerning and Defining Your Goals,” “The Basic Solutions”, “Special Situations”, and “Technical Considerations and Advanced Solutions.” There are chapters on living trusts, blended families, single people, special needs families, charitable planning, animal companions, and medicaid qualification. Part Iv includes a discussion on taxes, probate, IRAs, life insurance trusts, and others.

Suggested retail price is $24.95, but if you mention this August 16th post, we’ll send it to you for $2.50 to cover the costs of mailing. Or, you can attend one of our upcoming workshops and receive the book for free!

Second, I’ve co-authored another book on estate planning. This one is intended for financial advisors and accountants. This book is called Estate Planning and Taxation in Colorado. (If anyone has a knack for book titles, let me know. I clearly need some help in that arena.) This book is published by a Colorado-based legal publisher, Bradford Publishing. Check out this link for more info.

Our next workshop is “Winning the Estate Planning Game”. This is designed for people who want to learn more about estate planning and working with an estate planning attorney.  Attendees will receive a free copy of Karen’s new book: Your Legacy: Meaningful Estate Planning. There is no charge for this workshop, but reservations are necessary.

The workshop is held on Saturday, September 6th from 9:00 a.m. to 11:00 a.m OR

Thursday, September 11, from 6:30 p.m.-8:30 p.m.

The workshop location is our offices, 5400 Ward Road, Bldg V, Suite 170.

To reserve your seats, contact us, or call (303)420-2863.

Client Appreciation Picnic

Our 7th annual Client Appreciation Picnic is Saturday, September 13th. If you haven’t received an invitation and would like one, contact our office at (303)420-2863.

Continuing Education for Advisors

Our next advisor Lunch-n-Learn is in the planning process. Please keep checking for updates.

The workshop is held on Saturday, September 6th from 9:00 a.m. to 11:00 a.m

OR Thursday, September 11th from 6:30 p.m. to 11:30 p.m

The workshop location is our offices, 5400 Ward Road, Bldg V, Suite 170.

To reserve your seats, contact us, or call (303)420-2863.

I’ve come up with a list of issues facing business owners that can use the help of a business planning attorney. As before, the order is just my stream of consciousness. I’ll expand on each of these in later posts.

(1) Form and maintain your corporation status

(2) Form and maintain your limited liability company status

(3) Protect personal assets from business liabilities

(4) Protect the assets of one business, or one line of business, from the liabilities of other lines of business

(5) Avoid misunderstandings about agreements with customers and make those agreements easie enforce

(6) Avoid misunderstandings about agreements with vendors and make those agreements easier to enforce

(7) Avoid misunderstandings about agreements with employees and make those agreements easier to enforce

(8) Avoid misunderstandings about agreements between shareholders of a corporation or members of a limited liability company, and make those agreements easier to enforce

(9) Avoid misunderstandings and ease enforcement of agreements between company management and company owners

(10) Stay clear of trouble with the state or federal securities commissions when offering ownership in the company to prospective shareholders or members

(11) Avoid misunderstandings about agreements to buy or sell real estate and make those agreements easier to enforce

(12) Avoid misunderstandings about agreements to rent or leasel real estate and make those agreements easier to enforce

(13) Avoid misunderstandings about agreements to rent or lease equipment and make those agreements easier to enforce

(14) Avoid misunderstandings about co-ownership of real estate

(15) Incentivize and keep employees

(16) Keep your company minutes in order, or get them in order

(17) Meet with your attorney and other advisors to strategically plan the next year

(18) Sell your business

(19) Buy a business

(20) Copyright what you write

(21) Patent your great idea

(22) Protect your great logo, trademark, or service mark from being used by others

(23) Plan for succession of your business to children, key employees, or new owners

(24) Plan for transition of your business when you die

(25) Plan for transition of your business if you become disabled

(26) Protect against the destruction of your business in the event of your divorce

(27) Protect against the destruction of your business in the event of your partner’s divorce

(28) Keep shareholders from competing against your business when they leave

(29) Keep the old owner from competing against your business when she leaves

(30) Keep key employees from competing against your business when they leave

(31) Protect your company’s confidential information

(32) Document the duties, responsibilities and compensation of a company director or manager

(33) Document the duties, responsibilities and compensation of a company officer

(3) Oh yeah … save taxes

In this post, I’m just going to list some of the goals that I help my clients achieve. I’ve resisted the temptation to list them in any particular order, choosing instead to keep them in the order in which they came to mind.

In later posts, I’ll explain each goal in more detail.

1. Assures those you want to benefit will benefit.
2. Minimize Family Conflicts by Anticipating and Planning for Them and Naming Trusted Helpers to Act
3. Ease the Way for Survivors In the Event You are Disabled or Die
4. Speed Up the Process By Minimizing Court Involvement
5. Keep Your Affairs Private
6. Protect Your Spouse’s Inheritance from Remarriage, Creditors, and Predators
7. Protect Your Loved One’s Inheritance from Divorce, Creditors, and Predators
8. Protect Your Loved Ones From Frittering Away Their Inheritance
9. Provide Flexibility for Survivors to Tweak Your Plan After You Are Gone TO Provide For Changed Circumstances
10. Avoid the State’s Plan For Your Estate
11. Make Sure There is Money for Education
12. Provide Incentives For Loved Ones to Act As You Would Wish
13. Keep the Court Out of Your Affairs When You are Disabled
14. Name and Instruct People To Honor Your Values
15. Name and Instruct Guardians for Your Children
16. Name and Instruct Managers for Your Children’s Inheritance
17. Minimize the Possibility Your Estate Will Be Contested in Court
18. Keep Your Ex-Spouse Out of Your Affairs
19. Provide for The Special Circumstances of Your “Blended Family”
20. Disinherit Someone if Needed
21. Adjust Inheritances Based on Lifetime Gifts
22. Help Your Favorite Charities
23. Acknowledge Special People in Your Life
24. Provide For Those Who May Need Your Financial Help If You Are Disabled
25. Provide for Your Pets
26. Continue The Operation of Your Business
27. Plan For Future Generations to Enjoy A Vacation Home
28. Plan for Generations Yet To Come
29. Make Your Wishes Clear About Your Health Care
30. Provide For A Loved One With Special Needs Without Jeopardizing Assistance
31. Provide You with Peace of Mind
32. Pass On Your Values, Instructions, and History
33. And…. oh yeah, save taxes. That will be the subject of several more posts in the future.

The meeting will be at the Arvada Campus of Red Rocks Community College, which is located at 5420 Miller Street in Arvada, Colorado. There is plenty of free parking.

The program, which begins at 7:15 a.m. and is scheduled to go to 9:00 a.m., will feature Jayne Reiter of the Small Business Development Center. A regular feature of our meetings will also include a “mastermind” session where attendees can seek the advice and experience of other business owners for a specific problem or concern.

For more information, see the Institute’s website at www.womensentrepreneurinstitute.org.

I stand by the earlier post, which specifically disclaimed any in-depth knowledge of the dispute. However, now that Ms. Cliatt has had her say, I thought it fair to direct you to the website of the Robertson heirs to get their side of the story. Princeton has followed suit and devoted a portion of its website to the lawsuit.

Of course, I still wouldn’t know much more than I did before if the Robertson heirs hadn’t included a number of the legal documents. As a lawyer, that’s what draws my attention. Even these reveal a bias, as the website includes the Robertson’s complaint but not the University’s answer. I find the report of Michael McGuire of megafirm Price Waterhouse Coopers to be interesting, but a quick Google search wasn’t very revealing, so I don’t know more about him than what his report states are his credentials.

I also find interesting that Ms. Cliatt’s email mentions a “gift of $35 million to Princeton in 1961″ but on page 58 of one of the summary judgment rulings the Court quotes from President Tilghman’s deposition that she knew the gift wasn’t to the University but to a Foundation which benefitted the University. Arcane lawyer stuff, maybe, but for me, accuracy is important to credibility.

So, I look to the decisions of the court. Although it’s almost six years in, this case hasn’t been resolved. The trial is scheduled for October 1, 2008.

However, there have been several motions for summary judgment, the claims of which I found best described on Princeton’s website. What that means is one side has tried to convince the court that, even assuming the evidence in the light that most favors the other side, the other side’s argument doesn’t stand up. I note that Princeton won a partial victory in these in that the court determined that what appears to me to be a small part of the Robertson’s claims is barred by the statute of limitations. That means that the claim was brought too late to be decided on its merits.

In another matter, the Robertsons won a partial victory when the Court found that as a matter of law Princeton had overcharged the Foundation for $62,000 and had to limit one of its defenses on some accounting issue I didn’t even try to understand.

For the most part, though, neither side convinced the Court that it was a slam dunk. So, while Princeton may win the case in the long run, the Robertsons appear to have convinced the court that their case has enough merit to be heard at trial.

Ms. Cliatt’s email appears below:

Regarding the March 28 article on your website “Leaving Estate to Charity,” we were disappointed that you would share with your readers information about the Robertson v. Princeton litigation without contacting the University to confirm whether your characterization of the case was accurate. It is not.

Your article presents the Robertson gift as an example of a donation used for purposes other than those the donor intended, but it is the descendants of the donor, not Princeton University , who are trying to divert the gift to other purposes.

When Marie Robertson made her gift of $35 million to
Princeton in 1961, she made two key decisions and put them in writing: that the University should control the gift and that it should be used to support the graduate program of the Woodrow Wilson School of Public and International Affairs. Under Princeton’s stewardship, Mrs. Robertson’s gift is now worth almost $900 million. For 47 years it has been used solely for its intended purpose and Princeton’s program has become a world leader in its field.

Some of Mrs. Robertson’s children seek to overturn both of Mrs. Robertson’s key decisions so they can seize control of the funds and use them for other purposes.

Princeton has built a well-deserved reputation over more than 250 years for fulfilling the commitments it makes in accepting gifts. Unlike the plaintiffs in this case,
Princeton believes the decisions of the donor should continue to be respected, including decisions about how the funds should be used and how they should be administered. The lesson to be learned from this lawsuit is that, decades after a gift is made, the recipient of the gift may find the descendants of the donor attempting to redirect the gift for purposes other than the one the donor intended.

Cass Cliatt

Princeton University Director of Media Relations

A number of our clients, although they aren’t Hiltons, Buffets, or Gates’, also choose to leave their estates to charity. I’m always happy to see this happen, but I’m sometimes unpleasantly surprised by the attitudes of the charities. When we settle a trust or probate an estate, we are required to notify the charity that it is a recipient of the estate.

Fair enough. But some charities can’t seem to recognize that they won’t be receiving the money right away. In the case of a probated estate, we’ll almost always advise a personal representative to wait one year from the date of death before making those distributions. That wait is to ensure that all the creditors of the estate “come out of the woodwork” and don’t surprise us with a bill that needs to be paid after we’ve given all the assets away.

So, we advise charities of this at the beginning. Still, before the year is up I get regular calls or letters asking me the status of the probate and when the charity can expect its money. Those are a great deal more annoying than the charities that are gracious and grateful.

Still, more frustrating are the charities that receive a gift for a specific purpose and then don’t use it for that purpose. A classic example seems to be The Robertson Foundation case. In that dispute, the heirs of the Robertsons are trying to make Princeton University give back funds the Robertsons gave back in 1961. The heirs claim that Princeton is not using the funds for the specific purposes that the Robertsons gifted the funds.

I can’t speak to the specifics of Princeton and the Robertsons, but it always bothers me when charities agree to receive funds for one purpose and then divert it to another. Some charities can be very high-handed about it. I wonder how much thought they give to how these actions affect potential donors. I, for one, keep a list of charities that I think don’t respect donors and will discuss my experiences with clients who consider gifting to those charities.