I am pleased to announce that Atlanta lawyer Cheryl R. Treadwell on May 1 will be joining me in our new law firm KaneTreadwell Law. We will relocate our offices to the Monarch Plaza in Atlanta on Peachtree Road (across from Lenox Square). Cheryl started her career in Chamberlain Hrdlicka’s litigation group. She was also a lawyer in the City of Atlanta’s legal department. We both bring together our experience in a way that will be more broadly beneficial for our clients. More details to follow.
The title to this post is partially a teaser. My post ultimately centers below on the horrible abuse of some court-imposed guardianships / conservatorships, as a chilling reminder of how everyone should avoid getting into this court-oversight snare. Adequate trust and estate planning — purposely designed to avoid a guardianship / conservatorship — is imperative.
My concern — as a lawyer — about the above snare also appropriately fuels my persistent opposition to those who narrowly overemphasize application of the “rule of law” doctrine, to the exclusion of equitable and other balancing considerations.
Merriam-Webster defines rule of law as “a situation in which the laws of a country are obeyed by everyone”.
Legal, political, social media, etc., often in my view, overplay the rule of law doctrine. With sanctimonious rhetoric, the loudest adherents preach that we are a nation of laws, and those laws — under the rule of law — must be strictly applied to and followed invariably by each of us.
My recommendation is that you take a few moments and read this October 9, 2017 The New Yorker magazine chronicle, captioned “How the Elderly Lost Their Rights”. It is about the abuse of certain court-imposed guardianships and conservatorships. Even with the durability of my many years of lawyering, I found this piece frightening and symbolic of a great threat to each of us and our families. Click here for the link to this piece.
Read this The New Yorker piece, and then ask yourself how you feel about the rule of law. As we all age, the next rule of law victim might be one of us.
Also, I am not suggesting in any manner we abandon the rule of law. It is a crucial element for society, and so forth; but, as with any area of law, I firmly believe all laws should be subjected to constant challenge and refinement for our collective good. Blind faith as to any law poses a threat to each of us.
Here is a link to my recent publication in Steve Leimberg’s Asset Protection Planning Email Newsletter – Archive Message #358 (dated February 15, 2018), titled “Augmenting the 2017 Nevada Trust Win in Klabacka“. Klabacka is the name of a 2017 Nevada Supreme Court opinion. You are welcome to pass along a digital or hard copy of my Leimberg piece to any other readers.
I suggest in this piece the possible use of a prenuptial (or in some cases postnuptial) agreement in conjunction with self-settled asset protection trusts, as a way to protect each spouse’s respective property in the event of divorce.
But, because from time to time I also assist divorce lawyers with attacking and finding chinks in the defensive armor of a divorcing spouse’s trust, this Klabacka piece also provides a backdrop highlighting the importance in any protective trust planning situation of crossing each “t” and dotting each “i”. The devil in the details most often is the tipping-point difference in whether defensive trust planning succeeds, or fails.
As I state in this Klabacka piece, some lawyers — with too much overconfidence — cut corners in their trust planning process, especially failing to give sufficient attention to long-arm jurisdiction exposure when (and if) the trust becomes the target of litigious attack.
Being a lawyer makes me hyper-attentive to whether anyone’s rights are being denied or limited, and what that person must do to exert the necessary power to address a situation (e.g., through persuasion, litigation, preventive planning, etc.). In these circumstances, one has to utilize purposeful power to right the situation, rather than merely hoping for some pleasant, affable, go-along / get-along resolution.
With my blog easily at my disposal, and both as a lawyer and individual, I cannot sit back silently in the midst of what I consider to be completely misdirected attacks against Colin Kaepernick and other NFL players voicing their protests. I refer further below to a racial epiphany I had a couple years ago relevant to these NFL protests.
I have enjoyed the benefit of white, male privilege my entire life. I grew up in north Fulton county Atlanta. My father was a successful lawyer; he and his three brothers attended college in the 1930s [Vanderbilt, Davidson, and MIT]. All three were Phi Beta Kappa graduates. My father graduated number one in his Vanderbilt law school class. He was the only law student in his class who, immediately upon graduation during the depths of the depression, secured a lawyer job (with attorney Bill Sutherland of the then-Atlanta law firm Sutherland, Tuttle & Brennan), and on and on. Most importantly, during my entire life I have had the liberty essentially to give anyone the proverbial finger, without any thought or fear as to how I am, or may be, perceived.
Here is the epiphany I experienced two years ago. My wife, kids and I had dinner with a family whose kids go to the same private school as my kids. We are longtime friends. Our friends are black. The father – we’ll call him “Mark” — and I were having after-dinner drinks. Mark is a successful executive at a large Fortune 500 company.
As Mark and I talked over drinks, I commented — because I was growing my hair longer — that if I were a black guy I would probably have the most militant afro possible.
Mark responded by stating that, as a black man, he cannot sport the afro I referred to (not that he even wanted one). Mark said that having a large afro would create an extended array of additional problems for him. Possibly more night-time police stops while driving or being characterized as some kind of radical Black Panther, etc. Mark acknowledged that he has to toe the line so as not to create these potential racial misperceptions, and that he has to teach his children to be aware of these same misperceptions.
My reply to Mark was that this burden he and other blacks carry is a consideration I had never in my life had to worry about (or even think about). For example, I can drive anywhere I wish at night and sport whatever clothing or hairstyle I choose without fear of being misperceived (and even if I am, there will likely be no consequences). I can walk anywhere, or into any store or mall, without people clutching their handbags, or purposely crossing the street to avoid me, etc. I can disagree with anyone I choose.
Up to that night, it had never occurred to me that Mark and his family face any social differences or prejudices compared to others in our network of school friends and families. I simply assumed we all had arrived at the same status in our lives as to our children, our own college education, successful jobs, comfortable homes, our children’s private school education, social status, etc. The point is I had never even considered or thought about any disparity among our families.
For the first time I realized that even my good friend Mark — although outwardly as successful as (and likely more so) any of our mutual network of family and friends — has to bear a burden of racial bias completely foreign to me. With this revelation, I realized Mark cannot avoid this ever-present element of race-tainted perceptions of himself and his family members. Nor can Mark use the proverbial finger (or even exhibit the spirit of the finger) as freely as I can. I perceive Mark’s situation as a powerfully insidious and persistent form of inequality and denial of liberty, in a way possibly not yet perceived, let alone understood or acknowledged, by many white males.
Now back to the NFL players. My assumption is that they – in continuing the protests on behalf of themselves and those who are mislabeled and misperceived because of race – understand (and feel) this inequality. And, I believe it is a misdirected fallacy among many critics of these NFL players who express the notion that the NFL players should be thankful and grateful for their money, fame, and success and, accordingly, toe the status-quo line without protest.
My view is that these NFL players, by using the power that the money, fame, and success gives them, are able to more directly and openly draw attention to this racial disparity in a way that now has triggered the closer attention this issue deserves. These players are no longer merely toeing the line, nor should they.
One further comment from my view as a lawyer. Our greatest liberty in the U.S. is the right to protest, dissent and disagree openly. Merely stating someone is disrespecting the flag by kneeling during the national anthem is a knee-jerk platitude that diverts attention away from considering why the NFL players are protesting; and, how we all might be more receptive to try and better understand the rationale and underpinning of these NFL player protests. My view is that our flag — and the freedoms and rights it so importantly symbolizes – is an icon consistent with why these players can (and may) choose to kneel in protest.
My hope with this blog post is that my white male readers can at least consider the tremendous privilege we have; and, in view of that privilege, be willing to imagine themselves for a moment in the place of these NFL players who, in my opinion, are unselfishly courageous in helping shed more light on these racial issues.
As Edmund Burke aptly said, “The only thing necessary for the triumph of evil is for good men to do nothing.”
I am currently reading the novel A Thousand Acres (1991), by Jane Smiley. This is essentially a modern-day version of Shakespeare’s King Lear involving a father’s disinheritance of a daughter from the family farm (a 1,000 acre farm) and the destructive effects of deeply rooted, and long denied, family issues. This novel also is a powerful depiction of estate planning discord. [There are certain tragic elements in the novel that I fortunately do not see often in estate disputes.]
One line in this novel notably jumped out at me the other evening. It refers to one of the farmer-neighbors named Harold who, often to the humorous and bemused talk of the other neighbors, marches to the beat of his own drummer, but who also is one of the most successful farmers in the community:
Here is the line referring to Harold:
It’s just that he’s [Harold] cannier and smarter than he lets on, and in the slippage between what he looks like and what he is, there’s a lot of freedom.
This line is powerful. In contrast to Harold, many people are much too concerned about what others think about them. These people stifle their own freedom.
A tie between the above line and this blog post is that my great joy in lawyering is helping clients respond to the currents of life from a position of strength, power, and independence. Independence particularly in terms of having control over their lives, including preventing legal issues, disputes, litigation, not bowing easily to the expectations or judgment of others, and avoiding the time- and emotionally-draining interference and overreach by others.
In one of my earlier blog posts, captioned “Helping Clients Have Power; Blog Post 2 of 3” (click here for this earlier post), I referred to two of the saddest characters in literature: Willy Loman in the play Death of a Salesman (Arthur Miller) and George Babbitt in the novel Babbitt (Sinclair Lewis). Each of these characters demonstrates so powerfully the sad, unhappy mistake of maintaining such a persistent, engulfing concern about what others think about them. The complete antithesis of power.
Finally, one ancillary legal point. Liberty is the environment that (fortunately) allows us to be free; Actually exercising our freedom in the above context is our own responsibility.
The point of this blog post is, generally, to make an immediate spousal rollover to the surviving spouse’s own IRA when the first spouse dies. Avoid the situation where the surviving spouse continues to hold the deceased spouse’s IRA as an inherited IRA.
In most cases the spousal inherited IRA status, caused by a delay in making the spousal IRA rollover, results in the following costly trap if the surviving spouse dies prior to making the IRA rollover.
Assume John has a large IRA that names his spouse Jane as the primary beneficiary. Their children are the secondary (contingent) beneficiaries. John is 63 years old; Jane 52.
John dies. Jane plans to roll over John’s IRA into her own IRA, with the goal of obtaining the following two significant benefits: (1) With her own rollover IRA Jane can wait until she is 70 ½ to begin taking out her required minimum distributions [“RMD”]; and (2) Jane can name their children as the primary beneficiaries of her rollover IRA. This is an excellent plan in this case.
As to asset protection, Jane’s own rollover IRA will benefit from generous federal and state law protection for her IRA. By contrast, an inherited IRA does not get the same degree of asset protection.
Here is the crux of this blog post: Jane dies before making the rollover to her own IRA.
Absent the rollover at her death, Jane is treated as the beneficiary of John’s IRA, as an inherited IRA. As a result of Jane’s death occurring after John’s death, John’s IRA contract controls how Jane’s inherited IRA account must be distributed, etc. This is John’s IRA account contract with the financial institution that holds his IRA account.
Depending on the governing terms of John’s IRA contract, John’s IRA likely must be payable either to Jane’s estate or to John’s heirs. As a slight consolation, the duration of the distribution payout to Jane’s estate or to John’s heirs can still be computed over Jane’s life expectancy (her actuarial life expectancy as of John’s death).
Also, absent the rollover, the annual RMD for John’s IRA (Jane’s inherited IRA] must start in the year after John’s death. There is no delay-option until Jane would have turned age 70 ½, etc. In addition, distributions to Jane’s estate or to John’s heirs will likely result in adverse income tax consequences due to the compressed tax rates for an estate, etc.
The next point also is important and frequently overlooked. In this example with Jane dying after John, John having named the children as secondary beneficiaries no longer has any effect. John’s secondary beneficiary designation was relevant only if Jane had predeceased John. With Jane’s death occurring after John’s death, John’s secondary beneficiary designation for his IRA account means nothing. The overlooked point is that there is no look-back to John’s secondary beneficiary designation as a result of Jane’s subsequent death.
One final ancillary point about the above inherited IRA: John and Jane also must each include express language in their financial powers of attorney allowing the agent to make a spousal IRA rollover. This is critical if Jane is incapable of making her IRA rollover at the time of John’s death (due to her age, disability, etc.). The power of attorney needs also to authorize and spell out the agent’s authority and the naming of the primary beneficiaries for the rollover IRA.
I plan over the next two weeks to get my teenage kids to sign basic Last Wills and Testament, financial powers of attorney, and health care directives. Georgia law allows a person age 14 or older to have a Will.
There are two reasons why consistently I had put off this task until now. One, and I admit a degree of nervousness as I type this sentence, is that we parents simply do not wish to contemplate or envision any possibility of our children dying or becoming incapacitated. Getting them to sign their own estate planning documents can feel like we are pushing our kids too fast, and too far along, the pathway of life (and ultimately toward death).
Two is that for many families the hourly law firm rates for estate planning make basic, core planning appear overpriced, and a task, therefore, for some other day. Also, frankly, I failed for many years up until now to take time during my busy work-load to develop and create a well-written basic Will. I simply never had a basic Will I offered to clients.
In view of my own family situation, I finally stopped and took time to design and prepare an excellent, basic Last Will and Testament. It will work perfectly for my kids, and will be effective until they later get married or accumulate assets that warrant revisiting their estate planning. Or, it will continue effectively in place even if my kids get married (but with no Will provisions for their spouses). The Will has a no-revocation provision in the event of marriage.
This basic-Will task also demonstrates that creating simplicity is not easy. I spent time designing, tinkering, and deciding on what elements are optimal for a fine, basic Will. I am pleased with the result.
This Will, among its various provisions, refers to tangible and non-tangible property, tax and expense apportionment; “electronic communications content” [internet access]; allows, in accord with Georgia law, the executor to name custodians for property under the Transfers to Minors Act if necessary; includes a “No-Contest” clause that imposes litigation fees and related costs on a contesting beneficiary who initiates an unwarranted dispute over the Will or the estate; an express acknowledgment that the individual signing the Will is not in a relationship with anyone that he or she considers is, or creates, a common law marriage in any state, as the date of execution of the Will, etc.
I also believe my kids will find their moment of signing these estate planning documents a positive, notable point of progression of their continuing maturity and developing adulthood.
I urge you to consider having your age 14 and over kids sign similar documents. I provide these documents on a flat-fee basis.