A client came in a while ago to review the draft of an estate planning document I had prepared for him. He's a smart man, but his first statement was, "We need to pare this down a lot. Most of it is boilerplate and some of it's just gobbledygook to me." I'll tell you what I told him.
Just as things become trite or hackneyed by being true, what you may think of as "boilerplate" language in a will or trust or lease, or any other legal document, is in that document for one reason: at some time in the past, the event that the language is designed to prevent - HAPPENED.
I look at a document with lots of "just in case" language - boilerplate, if you will - like a Swiss army knife: I have several SAKs, and in each of them is a blade I've never used. Heck, I don't even know what some of them are supposed to be used for! But here's the deal: when I'm in a position where that blade is the only one that will get me out of trouble, I'm awfully glad it's there. Similarly, the 20 pages of language in a trust about what the trustee can do in certain situations may never be needed, but when it IS needed, the trustee or trustmaker or beneficiaries will be very glad it's in there.
By the time I got through discussing my client's estate planning document with him, he understood why things were written as they were. I actually thanked him for reading it so closely! When your attorney prepares a document for you, please read it. I can't tell you how many clients have "no questions" about their powers of attorney or wills until I start pointing things out. ASK QUESTIONS. A lot of legal stuff is non-intuitive, and even smart people can be ignorant in an area in which they don't operate or aren't trained. Your lawyer should be educating you. If he/she is not doing so, find another one.
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. Your situation may be different, and even if it's not, please consult an attorney who practices in the area of law to which your question pertains if you have questions or concerns.
As I type this, I'm sitting on the judge's bench waiting for a jury trial to begin. The defendant is an attorney of my acquaintance who has his own attorney (so, not a fool). The jury panel consists of 20 or so people who are waiting patiently for me to begin, unlike the last time we attempted to try this case, when only 6 people showed up for jury duty. I'm glad of that, because otherwise, I would have had to send the police out to round up a "pickup jury" - which, as the name implies, consists of currently available hapless citizens of the municipality - which is never a fun process.
The prosecutor in this court is a judge in another jurisdiction. He's also my backup prosecutor in a court where I'm the primary prosecutor. I'm the backup judge in another jurisdiction for the judge in the court where I'm the primary prosecutor. Confused? Don't be. This is an issue of jurisdiction. Each city is its own judicial jurisdiction, which means that I can be a prosecutor in one city, a judge in another and a defense counsel in a third without running afoul of the conflict of interest provisions of our Texas Disciplinary Rules of Professional Conduct. It's a question of hats: I can deal with another attorney where I'm the prosecutor and he or she is the defense counsel, and deal with that same attorney where I'm the defense counsel and the other attorney is the judge.
There are those who would say there is no way one person can deal with another in two different relationships, that there must be some favoritism or bias that keeps these relationships from being ethical. I've been a prosecutor for 32 years, a defense counsel for 29 years and a judge for 13 years. In all that time, I've only been approached one time to give a defendant a break because of a relationship I had with his attorney. My word is a precious thing, as it should be for every lawyer. Those who try to turn relationships to unfair advantage are the exception rather than the rule. And a reputation, once sullied, is hard to retrieve.
We do a lot of probate at the Jacobson Law Firm, and I see a common misperception when it comes to real estate: the kids will come in to probate Dad's will,and they've agreed to sell the house and split the proceeds; however, as we get deeper into our discussions, it turns out that nobody probated Mom's will when she died 6 years ago. When I ask why, the answer is invariably, "All of their property was community property so Dad didn't need to probate the will. Besides, Dad had the appraisal district change the house into his name alone, so that should be enough."
There are two problems with this logic. The first is this: when it's time to sell the old homestead, the title company likely won't issue a policy until Mom's will has been probated, because there's no record that Dad inherited her half of the house. If there's no title insurance policy, the value of the house goes way down because the buyer can't be sure he or she is buying all of everybody's interest in the house. Another concern is that here in Texas, a will has to be probated within four years of the person's death; however, there are a couple of ways to clear the title even after four years have passed. It just prolongs the time it takes to complete the probate of Dad's estate, sell the house and split the money.
The second problem is that the folks at the county appraisal district don't give a rip who owns the property, they just want to have somebody on the hook to pay the taxes. They'll change the name and address of the person responsible for the taxes pretty much whenever they're asked to, but that's not an official change of title. In order to pass clear title to real estate, the deed records have to reflect the changes in ownership, by filing one of the following:
As always, the above is legal information, not legal advice, and since I'm a Texas lawyer, it's based on Texas law. As many of you know, my father passed away last October. My mom is fortunate that her son practices probate law and knows probate lawyers. Children of a surviving parent can do that parent a great service by suggesting a visit to a law firm that practices a lot of probate, for a review and recommendations on how to get that brand new widow or widower through a difficult time with one less worry.
I had my right knee replaced a couple of weeks ago, the fourth surgery on this knee. The last time I had surgery this serious (ACL replacement, same knee) was 38 years ago, when I was 22 years old. I'm a pretty fit guy, and I did the pre-surgery physical therapy exercises, so I figured I'd wake up, start the PT and be back at work in no time. Not so much. To my surprise and chagrin, my body at 60 years old doesn't respond nearly as quickly as it did when I was in my twenties. As Mike the PT guy said when I complained that I wasn't progressing as fast as I thought I should, "He basically cut your leg off and then put it back on. Give yourself a break."
Patience not being my strong suit, I'm having to constantly remind myself that my approach has to be different than it was when I was younger.
Which brings me to the topic of today's blog: circumstances change, and we need to be willing to examine the arrangements - wills, powers of attorney, investments - we made last year, or last century, and see if they still address our current lives. The end of a year seems a good time to take stock of things, so here are some questions to get you started:
Now pardon me while I do some more PT.
In the Spring of 1991, Major General Edgar "Andy" Anderson, the commander of Wilford Hall Medical Center, had just learned that one of his recently promoted senior NCOs had cheated on his promotion test. He called his acting Director of Medical Law, a mid-level JAG Captain (me) into his office, shut the door, explained the situation and said, "What do you think I should do?" I, eager young buck that I was, went into great detail about the options open to him as the commander, the military justice and administrative procedures to be followed, etc., when he stopped me with a look of slight exasperation and lots of wisdom and said, "Dana, I know what I can do. I want to know what you think I should do." Even in his disappointment with the cheater, he was a mentor, a teacher, an example of leadership.
I've never forgotten that, "I hoped for more from you" look, followed by deep mentoring. The idea of "can, may and should" plays a big role today both in our advising of clients and in my interactions with my business law students. Simply put, that I can does not mean I may, and that I may does not mean I should. "Can" connotes ability. "May" connotes permission or authority. "Should" deals with things like judgment, ethics, morality and charity. The first two are largely a matter of fact: when I'm a kid, I either can or can't ride a bike. I either may or may not ride down to my friend's house. However, whether I should depends on the weather conditions, or what I'm going there to do, or what time I have to be home.
In estate planning, it might play out as follows: you can hire a lawyer to write a will, and you may give away the stuff you own to pretty much whomever you wish. The "should" sometimes comes when a client wants to, for example, not only disinherit a child, but state in great detail in the will the ways in which that child has disappointed him or her. That's where we sometimes stop being attorneys and start being counselors. I'll write your will however you want it within the bounds of the law, but I reserve the right to say, "Is that really how you want to say it?" In probate, it might be whether to contest a will when all the assets could be depleted in the litigation. In business, whether to form a company with a friend as "50/50 partners" (almost always a bad idea). Some people don't like it and we've been fired more than once for making unappreciated observations, but we take seriously the firm motto - "helping people for life". Making a decision in anger, or greed, or out of spite - or even compassion - often gives rise to regret. The "should" part of the equation is the part we all sometimes need a little help with.
As you may know, my dad passed away last month. Because he was a veteran, there was something of a gap between his passing and the day his interment could be scheduled at Fort Sam Houston National Cemetery, about 10 days. During that time, there was a lot of activity around planning the memorial service, determining when/where/if a reception would be held, getting people into town, figuring out what my mom's living situation would be going forward - stay in the same place, move to a smaller place, etc. - and what the timing of all these things would be. Add to that figuring out finances, what to stop, what to pay off, what to keep paying for, what to sell, and by the time Dad's earthly remains got planted, we were worn out and overwhelmed.
A week later, my mom finally realized that THERE WAS NO DECISION THAT NEEDED TO BE MADE IMMEDIATELY. She called and said as much, and that she was going to wait until after the holidays to make any non-urgent decisions. She's a PhD counselor type, so this may have come to her sooner than some, but it doesn't take a PhD to know that there are also some decisions which SHOULD NOT BE MADE IMMEDIATELY. All of which leads to the title of this blog entry: Take A Breath.
Juliette Funt (www.whitespaceatwork.com/) gave a talk at the 2017 Global Leadership Summit called, "The Strategic Pause". She talked about "white space" in our lives, where nothing is scheduled, where we can breathe, even if just for a moment. Although she was mainly addressing workplace productivity, the idea of a pause, a breath, as both therapeutic and productive applies to our personal lives as well - perhaps even more. Big decisions after major life upheaval, whether that upheaval is good (new baby, wedding, etc.) or bad (death, job loss, etc.) should always follow a time of breathing, of silence and solitude, of prayer and listening. Take a breath...
My Dad finished his race yesterday. He was my father, my partner, my mentor in the law, my hero in life. He was the last remaining founder of Hardy, Schwartzman, Bahan & Jacobson, PC, which morphed into Hardy & Jacobson, PC, Hardy, Jacobson, Gazda & Jacobson, PC, and finally into The Jacobson Law Firm PC, which it has remained these last 23 years.
Jake Jacobson was a brilliant attorney, steeped in municipal law at the knee of one of Texas’ masters, Harvey L. Hardy, Jr. He had a heart for military veterans, and no wonder: he started his military career as a US Air Force private, before the rank of Airman Basic existed. After reaching E-4 (buck sergeant), he applied for, and was accepted to, the Aviation Cadet Program, receiving a commission as a Second Lieutenant on graduation. He was a “mustang” - an enlisted man who became an officer. He used to say that the medal of which he was most proud was his Good Conduct Medal, because it reminded him that he started as an enlisted troop. Quite a statement, considering his two Distinguished Flying Crosses, five Air Medals, Bronze Star and two Joint Service Commendation Medals. Following graduation, he was commissioned a second lieutenant. He attended Radio Operator school, Navigator Training, and Pilot Training, making him one of very few entitled to wear three sets of Air Force wings.
Dad was a fighter pilot. It was how he defined himself. Even later in life, if you asked him what he did for a living, he would say, “I’m a fighter pilot who practices law.” In his granddaughter Mara’s words, “The sky was his happy place.” That’s true, but he stopped flying when he retired. When I asked him why, he said, “If I can’t fly at least once a week, I’m not safe, and I won’t be unsafe.” For his 80th birthday, my mom arranged for him to fly a P-51 for an hour. He wore his own flight suit. He was in heaven, in his element - in his happy place, in his own skin.
That was his standard, to do everything he did well and fully, to be dependable. He was a man in the mold of every John Wayne character, in the mold of “Lonesome Dove”’s Woodrow Call and Augustus McCrae. He was bigger than life, a man’s man.
He loved his wife, his family, his country and his Lord. He went to Vietnam as a volunteer and it changed him. He suffered PTSD in silence, because that’s what fighter pilots did. We were astonished and grateful when we discovered that, not 2 months before his death, he at long last unburdened himself to one of our pastors, admitting the pain of seeing colleagues, comrades, die. Of frustration that the politicians “wouldn’t let us win and come home”. He grew up believing that military service was a patriotic thing, a duty of all who were able, that love of country was to be honored and cherished and pursued, and he felt betrayed by those in positions of power. Bit it didn’t change his passion. To the end, he was an American warrior.
I joined the Air Force and studied the law largely because of him. To practice law as partners was a privilege for both of us. Through ups and downs, we were loyal to each other, to our profession, to our Lord. My military service took me out of the office for weeks at a time, but he never complained. It was an honor for him to support me in my service. He got it.
Jake Jacobson has “slip’d the surly bonds of earth”. He is home with his Lord, and ours. He will be missed. May all your skies be CAVU, Dad, and I’ll see you there.
I know, a happy little Friday topic! One of the best stress-relievers you can leave for your family is to keep as many financial accounts and insurance policies as possible out of your estate. Why? Because your beneficiaries will get the money faster and with (mostly) little hassle.
You see, most financial accounts allow you to designate a beneficiary, a person who will more or less automatically get that account or the money in it when the financial institution is notified of your passing. A POD, or "pay on death", account only requires a death certificate in order for the bank or credit union to cut a check to the person you designated as the POD beneficiary. A TOD, or "transfer on death", account is much the same way, only the assets are transferred into a new account in the beneficiary's name when the institution gets a copy of the death certificate and some paperwork gets filled out. The reason we have TOD accounts rather than making them all POD is that the assets in a TOD account might fluctuate in value or have penalties for liquidation (think fluctuating stocks or mutual funds, or an IRA where the beneficiary isn't old enough to start making penalty- and tax-free withdrawals).
Another way to avoid having accounts pass through your estate involves designating the accounts as JTWROS (joint tenants with right of survivorship), where the surviving owner just keeps on owning the assets in the account - many married couples have this type of account.
Quick note on insurance policies: sometimes people take out a policy and name their estate as the beneficiary (or, as too many military members are advised, say "by law"). Although there are situations where this is the smart thing to do, it's usually not. Like mostly not. Like practically never. If you want your spouse, kids or whoever to get the insurance proceeds, specifically name them in the beneficiary designation form the insurance company provides. Easy peasy.
All of these tools will ensure that the assets you want your heirs to have will get to them quickly, rather than having to wait (sometimes months) for the will to be probated. Your survivors will thank you! Now go have a beer, it's Friday!
I've probably drafted over 5,000 estate planning documents in my 32 years as a lawyer. At least half of those have been advance directives of some ilk: financial powers of attorney (POAs), medical POAs, directives to physicians, etc. Not until my father became ill, however, did I have to make use of one myself. We're in the middle of that season right now, and I have discovered a few things about the practice of implementing advance directives that I didn't know:
1. A lot of people who should ask to see a medical power of attorney just don't ask. I've discussed my dad's care and condition with a number of nurses and other staff who just accepted that I was who I said I was and that I was the primary agent named on the MPOA (I'm not, and didn't tell them that I was). Does that mean you shouldn't get one? NO! It simply means that there's a lack of training in the institutions we've been dealing with, which (as a former hospital attorney myself) shocked me a bit.
2. A lot of people who have no need to see an advance directive ask if you have one. Why? I guess because it's on their checklist, and it's on the checklist partly because it's easier on the facility if you have one. Often, if you don't have one, they'll urge you to fill one out. Remember, you don't EVER have to complete a living will if you don't want to.
3. As long as you know the patient's name and date of birth, you can get a fair amount of information from the physician's staff over the phone. One office even declined when I asked if they wanted me to scan the HIPAA release and send it to them! I guess I have a telephone voice that inspires confidence...
As happened when I had to serve as executor of my brother-in-law's estate a couple of years ago, I find that walking in the shoes of the people I serve, like executors and healthcare agents, gives me a better view of the challenges and surprises they face, and that, hopefully, helps me be a better advisor, counselor and representative. That's what I'm choosing to take away from this experience, anyway. I'll address more of these issues as our personal journey continues. In the meantime, if you have any spare prayers, please send them my father's way. I know where he's going, I'm just not wild about the process of him getting there.
While I sit here waiting for the car to get washed (why do I do this on Sunday afternoon? Why?) it occurs to me that things seem to run in packs in my practice. The latest recurring theme is people needing to probate the estate of a loved one who say, in various fact patterns, "We can't find his/her original will but here's a copy, that should be okay, right?"
Very often, the answer is, "Wrong." Why? Because in Texas and many other jurisdictions, if the testator (person who made the will) was in sole and exclusive possession of the original and it can't be found after the testator dies, the law presumes that the testator destroyed or revoked it.
It's not just the will that needs to be available, it's powers of attorney, advance directives, bank and financial account numbers and passwords, insurance policies, other recurring online transaction information, property records, etc. - all the stuff that needs to be dealt with and wrapped up after you die. At the firm, we include a list of these documents with every state planning packet we prepare.
The best thing you can do for your family is to have a binder with all this information in it, ready for your personal representative to grab and go. Original documents (most importantly your will) should be in clear plastic sleeves in the binder and the binder should be stored in a secure location (could be a locked filing cabinet or firebox). Give your executor separate instructions on how to locate and access the binder (hey, make it a scavenger hunt: "check the center drawer of the desk, the combination to the lock box/key to the filing cabinet is inside"). This will ensure your most important documents are accessible and organized when your loved ones need them most.