Monday, February 19, 2018

Beware of The Trust Mill

When you hit a certain age you can bet on receiving some sort of invite in the mail offering you a free dinner at lovely restaurant close to your home, served with a side lecture on 101 ways to avoid probate.  Now I love a free meal, but proceed with caution, it  may be a trust mill.

What's a trust mill?  It's usually an LLC that sets up shop in an area for several months, fires off a mass mailing to people over a certain age, gives you free food and attempts to scare you into a Living Revocable Trust.  This sales pitch is likely to contain lies, all designed to get you to sign up for a $5,000 or more trust document.  And chances are fairly good the speakers are not attorneys.

I'm not alone in my dislike of trust mills.  This was recently posted on a Wisconsin Estate Planners Listserve:
"Thought all you fine people should know the truth:  I have a nice lady whose elderly parents are about to become victims of a trust mill.  These fine folks tell the elderly that they should stay away from lawyers because probate costs 8% of the estate and takes 2 years."

  • Lie number one, Wisconsin has a probate fee of 0.2 percent, not 8%
  • Lie number two, probate can take as little as 90 days, but more like 8-12 months depending on the time of death.  My mother died on 2/16/14.....I had to wait until February 2015 so that final income tax returns could be filed.
  • Lie number three, not all assets will go through probate.  Many assets have direct beneficiaries: retirement accounts, bank accounts, life insurance, even real estate in Wisconsin can have a TOD Deed in place.  And the older population often rents and has fewer financial instruments if they have consolidated.
  • Lie number four, the folks running Trust Mills are most likely not attorneys and cannot actually help you fund the trust (that means putting assets into the trust, if that isn't done probate would happen any way).  When in doubt if the person is an attorney ask them for his/her State Bar Number.  A real attorney can recite that number in a flash, we type it all the time.

Being the first in my family to attend college and the child of blue-collar workers, I know people work hard for their money.  It really bothers me to see this type of company roll into town and siphon off $5k or more from people who just didn't know the facts about probate in Wisconsin.

Windmills are lovely, especially when you stumble across one in Sweden.  Trust mills are not so lovely.  Consumer beware.

Photo my M. Gustafson Gervasi - Malmo, Sweden, March 2016

Monday, January 29, 2018

Children's Literature: An Unlikely Source of Estate Planning Lessons

Image result for image book matilda

Think Children's Literature and Estate Planning lessons do not go hand in hand? Think again. 

This phenomenon first hit me in 2014 when I watched Disney's film Cinderella with my then preschool aged children.  As I said then in a blog post, if you are a parent without a will nominating a guardian for your child(ren) and setting up a children's trusts, watch Cinderella and you'll find your motivation.

Each new year of parenting has brought changes: diapers are a thing of the past, larger and larger bowls of oatmeal are required for the kids' breakfast, and the books and films they digest grow in complexity.  In the Treasure Hunters Series by Jams Patterson four adolescent siblings navigate the world of espionage and foreign seas in the midst of parents lost at sea.  Pulling his nose from the book my son raised a question -- "mom, what's 'their legal guardian' mean?"  Most recently it was Roald Dahl's Matilda that caused me to analyze and estate planning problem within the plot of a classic kids book -- a missing will and a crazed relative.

Matilda is the precocious protagonist of this 1988 classic kids book of the same name. Yet it is Ms. Honey, Matilda's teacher, that presents the link to keeping wills safe.  As a back story the reader learns that Ms. Honey lives a life of poverty while her aunt, and head teacher at the school where she works, lives in Ms. Honey's upscale childhood home.  It appears that the aunt took possession of the house when Ms. Honey's father (a widower, of course) died.  In the end of the book the will is found, Ms. Honey is declared the proper heir, and she returns to her home and the comforts of modern life (running water for example).  As both a mother and an estate planner, I shudder when I think about a parent's will being "lost" and unscrupulous relatives sliding in to claim possession or control of assets and/or child(ren).  You just cannot lose your will!  We live in the digital age, but when it comes to wills, the original hard copy is required.

Here in Dane County, Wisconsin one can file his/her will for "safe keeping" with the court for a $10 fee.  It is stored, in a sealed envelope, in the courts records.  Nothing is ever perfect, but my parental gut tells me the courts record system is safer than anything I could put in place at home.  Phew, one worry I can set aside as we pass through the stages of child development and the ensuing books and movies of youth.

Thursday, January 11, 2018

What I've Been Reading: The Gentle Art of Swedish Death Cleaning

It is not often that I find one book that captures so many of my core interests, but I hit the trifecta with The Gentle Art of Swedish Death Cleaning: How to Free Yourself and Your Family from a Lifetime of Clutter by Margareta Magnusson.  This little book hits on my key interests: one, it relates to my practice of estate planning and probate administration; two, it nourishes my frugal lifestyle; and three, it feeds my obsession with the Nordic way of life. 

Billed the next big fad to hit the US, Swedish Death Cleaning means to remove unnecessary things from your home, making the home orderly and nice at the time you depart Mother Earth.  At just over 100 pages, the book is a light-hearted memoir of the author’s later life when she “death cleaned” following the passing of loved ones.  Sprinkled throughout the book are suggestions for motivating yourself to get started and completing the act of taking control of your personal items to declare what is meaningful and purge the rest in creative and earth-friendly ways. 

I would add to Magnusson’s work two thoughts: one, death cleaning need not be reserved for those 65+, no age is immune to taking a final breath; and two, do not overlook the digital clutter you have accumulated -- digital photos, social media accounts, and countless megabytes of stored documents. 

If you are interested in learning more or discussing the idea of Swedish Death Cleaning, join me for a book talk on Saturday, February 10th, 2pm at the Cross Plains public library.  Library staff request pre-registration for this FREE event, which can be done online at

Wednesday, December 13, 2017

Swedish Death Cleaning Coming to the U.S.

The practice of law involves many roles: advising clients, researching statutes, following changes in federal law, drafting documents, and on particularly fun days -- being a guest on Wisconsin Public Radio!  This past October I was invited to be a guest on Central Time for a discussion of Swedish Death Cleaning, billed as the next biggest fad to hit the US. 

Swedish Death Cleaning is a Scandinavian concept designed to encourage people to review their possessions, doing away with the unneeded and making a plan for the beloved.  The book The Gentle Art of Swedish Death Cleaning: How to Free Yourself and Your Family from a Lifetime of Clutter by Margareta Magnusson hits American book stores January 2, 2018.  My copy is already preorderd, and a more specific review will be appear in my newsletter and here on Navigator in January 2018. 

Based on what I've read thus far, I have two things to add.  First, don't wait until you 80s to tackle the clutter.  My father died at 67, my mom died at 70, leaving me a ranch house filled with items to distribute, recycle, re-home or trash.  We are not guaranteed our 80s, don't put off until then what you can do today.  Second, don't overlook digital clutter -- social media, digital photos, web sites, blogs, and all sorts of other e-items are growing and growing.  One day they'll need to be purged.

Here is a link to the show on Central Time.  Enjoy, and happy de-cluttering!  We are making 2018 a year to purge as though we were moving, even though we are not moving.  Thanks for reading, and be well.

Friday, October 13, 2017

Estate Planning: Want it to be easy after you're gone? It's the "who", not the "what" that matters most.

Routinely clients state "I want to make it as easy as possible on my loved ones after I am gone.  Should I do a trust instead of a will?"  My answer usually causes their head to cock slightly, not expecting my response.

"It's not so much the vehicle or tool of estate planning you choose that makes things easier and less messy, it's the person you nominate to be in charge.  If the person nominated is overwhelmed, unskilled in these types of decisions, or caustic, you'll have a mess whether it's a will or a trust."  And then I see their heads nod, yes, in agreement.

"Who will be in charge" becomes a critical question.  My suggestion to clients is to aim for Switzerland: who is neutral, precise, and efficient?  That may be a relative, a close family friend, or possibly an institution like a bank or accounting firm.

When attempting to fill this role in your end of life affairs, picture the people you are considering doing the following:

  • if you have a will, filing it with the court;
  • closing all active banking and investment accounts;
  • notifying and paying all final creditors;
  • filing your last income tax;
  • selling your real estate, vehicles and other property;
  • distributing family photographs and other personal items;
  • disposing of unused medications;
  • re-homing any pet companions you  may have had; and
  • emptying the contents of your home all the way to cleaning out the fridge.
It's a lot of work.  It's emotional work.  It's work that may ruffle feathers within a family.  Who will be neutral.  Who will follow your wishes.  Who will not be crippled my emotion?  Who will not be afraid to tackle the expenses and numbers?  When you do that analysis you increase the chances your departure from Mother Earth will be less difficult on the loved ones you leave behind.  

Thank you for reading, and remember that a blog is not legal advice.  You should always consult with an attorney in your home state to obtain up-to-date information specific to your situation.

Tuesday, September 19, 2017

What's The Best Age to Release the Inheritance?

A significant part of my practice involves drafting testamentary trusts for parents with young children, usually aged 18 or younger.  A testamentary trust is a will that says I leave my probate assets to my spouse, but if my spouse has predeceased, then to a trust for my children.  This type of trust does not exist until both parents are deceased, and is created as part of the probate process.  It is not the same as a living revocable trust, which is created during life to hold assets while you are alive.
When creating a testamentary trust parents need to name a primary and secondary trustee. This is the person (or institution) that will invest the funds in the trust, file tax returns, and decide on how the monies are spent until the trust ends.  Which leads to the next question, when does the trust end?  "Most clients write until my youngest living child reaches age 25 or 28" is what I share with my clients.  "Personally, my wills says until my youngest living child reaches age 30 -- I adore my children, but I am aware of studies indicating the brain is still growing and forming into the mid-20s."

Often times clients are stunned when they hear the number 30, and question my decision.  Then I go on with more stories from my personal experience.  At the age of 40 I had lost both of my parents and received a small inheritance.  And I could not believe how many friends and family were encouraging me to "spend a little" on myself.  Day in and out for nearly as year people would say "come on, you've been through hell, treat yourself".  For a brief time I thought they were right. -- "a simple pair of diamond stud earrings would be practical, something I could wear for work, and one day pass on to my daughter" -- was a pattern of thought I had daily.  Then I looked at the prices, and there were more zeros than my frugal heart could handle.  In the end I bought piece of mind and put the inheritance in a brokerage account.

My fake diamond earrings are a standard piece of my work attire, and so now is this nugget to think about.....your child may be lovely, stable, and frugal.....but when they get an inheritance all the "shoppers" in their life will be more than eager to help them spend the money.  In the end a client sets the age they feel is right for their family.  But when making that decision, factor in the influence of others, both those who mean well and those who may want to take advantage of someone grieving.

Winter Break 2016 we took a road trip to Arkansas and went to Crater of Diamonds State Park, the only pubic park in the US where someone can dig for diamonds.  If you find one, you keep it.

The perfect way for the kids, then 8 and 6, to spend an afternoon.  Digging in the mud.  No diamonds were found.  And that is the closets I'll ever get to acquiring real diamonds.

Friday, July 21, 2017

Probate Completed, Where Are the Balloons?

For the past 12 to 18 months, possibly longer, you the Personal Representative in a Wisconsin probate have gathered papers, filed taxes, written checks, emptied the fridge, sold the car, distributed the family photographs, written more checks, and have your signature notarized more times than you can recall.  And now the day is here, the day you file the FINAL papers to close the estate.  The last bill to the lawyer is paid, you have free time in your calendar once again.  Things settle down into a new routine, the routine after the loss of a loved one, the routine after the work of the probate, and it feels like something is missing. You did it -- yet those filed court papers just slide off into an abyss.  Will you get a mailing from the court, some sort of official notice that you completed this marathon of a task?

If you are a Personal Representative in a Wisconsin probate the answer is simple, no.  There is no fan fare, no balloon drop, no confetti falling from the sky, not even a ribbon saying you crossed the finish line.  All there is is an entry in the CCAP system stating:
"Probate  -- Closed - File Retained Electronic"
That's it.  A one line entry closing out a challenging job completed during emotionally draining times.  Government has limited resources, and likely does not have the capacity to send out a form let alone a congratulations.  But I'll leave one here for you via You Tube -- enjoy, and pat yourself on the back for a job well done.