Monday, July 29, 2019

You Pay For What You Get: Beware Free Legal Advice

Be Alert! Image by M. Gustafson Gervasi 2019
Once upon a time an elderly women, Agnes, went into her bank to review her accounts.  Behind the desk sat an eager and chipper 23 year old "banker".  With good intentions of providing the best banking services possible, the young banker encouraged the older women to add her daughter to her bank accounts in order to "make things easier."  Relying on her long relationship and established trust with the bank, Agnes took the advice.  When the door closed upon Agnes' exit, her daughter, Anne, had been made a joint owner of the bank account.

Time passed and Agnes' health took a turn, with her earthly life ending six months after the bank visit.  Grieving, yet still functioning, Anne set about taking care of Agnes' affairs.  One day she went into the bank to settle her mother's accounts, death certificate in hand.  To her surprise, the 23 year old banker informed Anne about the joint ownership of the accounts, indicating they would all pass into Anne's name, a nice sum of $200,000.

Anne's next stop was her attorney's office, where the pleasant surprise of the ease of money transferring from Agnes to Anne came to a screeching halt.  As the attorney talked a sense of dread built up in Anne's stomach.  You see, Anne has a sister, Amanda.  As the meeting progressed, Anne learned that the joint ownership allowed the balance in the bank account to become Anne's, but Anne's alone.  She certainly could share with Amanda, but it was not required.  Being a loving sister, Anne had planned to simply write her sister a check, and then heard the term "gift tax". 

Under current law, set by the IRS, any one person can give another person up to $15,000 per year (exceptions to apply this being the IRS tax code).  Anne could give her sister up to that amount, but the balance in excess of the $15,000 threshold would be subject to the gift tax.  Anne owned the money and was gifting $100,000 to her sister.  Long story short, CPA and attorney billable hours were used to develop a transfer plan to Amanda that was legally acceptable, and a pinch of wishful thinking was added so that none of the family would die before the transfer was complete.  It all worked out in the end, however, the complexity and associated cost was the direct result of the free legal advice handed out by a young banker.  A banker, not an attorney.  A banker, not a CPA.  Remember, you get what you pay for, and in this case the free legal advice turned into some hefty bills and stress. 

Thank you for reading, and please remember that a blog is not legal advice.  A blog encourages thought and reflection.  Always seek legal counsel from a licensed attorney in your home state before taking any action on this subject matter.

Monday, July 22, 2019

When the Dead Outnumber the Living on Facebook

Pop quiz:  What year (estimated) will the dead outnumber the living on Facebook?
A)   2070
B)   2056
C)   2031
D)   2103

Click on this link to find the answer.  If the link is broken, the answer will be at the bottom of this post. 

The year itself is not the point, but rather the concept of all the digital data / refuse that will linger in cyber space long after our earthly years have come to an end.  Many Americans already feel smothered by piles of paper, cheap plastic toys kids bring home from birthday parties, and closets full of clothing from bygone eras.  Pile on top of that our digital clutter, and add the weight of the amount of energy required to keep the servers running that store it all, and you may be inclined to throw your arms up in the air in despair.

Clutter and chaos engulf M. Gustafson Gervasi's home. 2019

To purge or not to purge, that is the question.  What kind of digital footprint to you wish to leave behind in perpetuity? Who should be in control of what you do leave behind.  Don't assume the loved ones you leave behind will clear it all up -- in some cases those user agreements we click without reading deny Personal Representatives (a.k.a. Executors) the power to delete social media accounts. 

IMHO an annual review of your estate plan is a wise policy.  What addresses have changed, who has died or been divorced.  What accounts are now defunct.  And....what social media or digital accounts should be deleted.

Thank you for reading.  As a reminder, a blog is not a substitute for legal advice.  It is meant to inspire thought and stimulate conversations.  Always consult with an attorney in your home state for legal advice.

If the link above did not provide the answer, it is A) 2070.