Bobby’s Blog

Another day another chance to get it right.

I am writing this blog at 8:18 am in the morning and already today was a good day. Like most other days, driving into work I thought about how this day would look like. Unlike most days, I received a jolt of energy in my heart and no. . .it wasn’t from my morning coffee. It came about when I started thinking about the interview I was going to have with one of my clients and how much that interview means to me. I am doing a video legacy project for one of my clients. The purpose of the interview is to record his views on topics ranging from where his grandparents grew up to his favorite movie. I want to ask him what he admires most about his kids and major turning points in his life. I am not sure if my client knows it or not but this interview today is why I started my practice. You see, I never had the opportunity to interview my dad about these topics and there are no audio or video recordings that focused on his reflections about his life. My dad was a humble man but humility has nothing to do with it. I wish someone would have taken the time to interview my dad so I could understand his views now that I am a 40 year old man. I want to give this opportunity to as many people as I can because this gift is priceless. It is why I do what I do. Yes, today is a good day…

Why Does the Name of a Trust Matter?

As an estate planning attorney, a large percentage of my practice is devoted to creating trusts for my clients.  Normally, the name of the trust would be the name of the client along with the date of the trust.  For example, my trust reads the “Robert A. Feisee Living  Trust dated January 1, 2002”.  I think that we are missing an opportunity in passing on more than just a sterile legal document when we pick the name of our trust.

A colleague of mine, John Warnick, Esq., is a visionary in this field who has really made me rethink the way I work with my clients. I went to a conference a few months ago where he explained that naming your trust is a great way to pass on your legacy and values to your beneficiaries.  It makes perfect sense and I am hoping to implement this technique with my clients this year and hopefully long into the future.

Here is my first draft of my new trust name:

“The Feisee Possibility Trust –   This name has been chosen to reflect our family’s heritage and belief that anything is possible if you put your mind to it and you believe in yourself.  My mother and father escaped from Iran and came to this country not knowing the language and less than a $100 to their name. They built successful medical practices through hard work and a belief in themselves.  I was a young boy who had a dream to play in the lacrosse national championship game and I did it.  I had a clear vision of my dream, I practiced every day and I believed in myself. Now I own my own law practice using the same tools that were taught to me by my parents.  Don’t ever lose your faith in yourself or your family.  You can do whatever you put your mind to. The possibilities are endless. . .”

 I think the new name of my trust has a better ring to it than my previous name. I am going to go with that one for now until I think of something better.  How about your trust? Do you like the name?  Do you think you can put more of YOU into that name?



Capturing and Transferring What Matters Most?

A few days ago was the 1 year anniversary of my father’s death.  He battled alzehimer’s for over 10 years.  This weekend I reflected on some of my most favorite memories of my father and I realized all those memories are in my head.  They are not written down or recorded anywhere.  My father had a great smile that could light up a room and he told great stories about how he struggled growing up.  How I wish I could hear his voice just one more time.  The problem is, no ever thought about recording his stories. There was always an excuse (we’ll do it later, we don’t have a recorder, i’m busy).  Those excuses pale in comparison to the powerful impact those stories would have had on me a few days ago.

By chance, I had a conversation with my mother a few months ago where she revealed another of my dad’s stories that he never told me. He was a young doctor working in a small “village” hospital.  He was in charge of one of the sick wards and he was tired of the lack of funding for the patients’ care.  The rooms were unsanitary and there was an inadequate inventory of medicine. He became very frustrated with the Hospital Administration’s rejection of his repeated requests for better conditions for his patients.

My mom then looked at me in the eye, and with a smile she said. . . “Do you know what your father did for his patients? He went on a Hunger Strike! That’s right, he refused to eat until his patients were given adequate care.  He almost lost his job, his medical license, basically his whole career over this incident. He was willing to sacrifice it all for what he believed in.  Well, it caused such a commotion at the hospital that the higher ups looked at the situation more closely and they upgraded the beds as well as the medicine.”

Then my mom looked at me again. . . .”Bobby, what are you willing to do for your clients? Will you be as dedicated as your father?”

I had tears in my eyes when my mom told me that story. It gave me more strength and energy than any amount of money or material assets could give me. This lesson is priceless and it is what matters most about my dad…his integrity.

The scary thing is that I may have never heard that story unless my mom and I happen to stumble on that conversation.  These stories are priceless on the one hand, but on the other hand, they are fragile and fleeting if not preserved.  One of my missions for the people I work with is to capture, preserve and protect their stories as a guardian.  These stories are what life is about. They are real and it is what brings families together during difficult times.

Don’t wait until it is too late. Capture your stories now while you can remember and enjoy them!

Estate Planning for Your Children

Often times, a young couple will call my office when they have had their first child. They tell me “We have a baby now, we need to get our Wills done.” When I meet with the parents, I find myself routinely answering the same questions and I see that they have relatively no idea on the issues they should be addressing. When they ask for a simple will, I ask the couple if it is their intention that the COURTS supervise how their child is raised. In some instances, this might be a good thing for the family. In my experience, any time the government is involved with my personal affairs, I find that it increases the expense and time in whatever I do. For example, if the parents have life insurance (which they almost always do), I ask them who they have designated as the contingent beneficiary of the life insurance. Usually the primary beneficiary of a life insurance policy is the other spouse. However, what if something happens to both spouses? Isn’t that really why this couple decided to call me. To address the legal issues if something were to happen to both of them. Who would get the insurance money if both spouses were to pass away? Sopme couples say they didn’t think about that. Others say they have listed their minor child. Either way, that life insurance money is going to be paid into Court and the Court will decide how the money should be used. I don’t like that result. That is why I counsel my clients to look at their options. One option would be to keep the Courts out of this situation and pay the money to a trust where YOU as the parents can decide how the money should be used NOT the Court. Why do you want the money that is supposed to be used for your children to be used instead for court filings, attorneys fees, etc.?   

Once we remove the Courts from the equation, the next issue we need to address is how you would like the money to be spent on your child. Issues like education (private school, public, college, advanced degrees, etc), clothing, extra curricular activities. What if the child gets in with the wrong crowd and is now doing drugs. How should this be handled? (tough love, counseling, rehab?).

These issues any others need to be addressed if you want to do the planning right. In my experience, a simple Will does not address any of these issues.

Creditors Might Have Access to Inheritors’ IRA

           A Florida appeals court recently ruled that creditors had access to inherited IRAs previously thought to protected.  The court held that when the owner of an IRA dies, the instrument that passes to the beneficiaries is converted into a completely separate account which is then subject to applicable taxes. The law varies by state, and even the Florida ruling could be subject to further action by the state legislature. Given the uncertainty, the most prudent approach is to get proper counseling when designating your IRA beneficiaries and exploring all your options such as designating a trust as the beneficiary of an IRA.

            The appellant in Robertson v. Deeb contested an order denying his claim of exemption from an inherited IRA. Upon his father’s death, Robertson could choose to convert the inherited IRA into one of two accounts. Since a single owner did not continually maintain the account, the Florida court ruled that statutory protections that ordinarily protect IRAs from creditors did not apply.

            Creditor and tax exemptions for inherited IRAs are still unsettled issues in law. Although the Florida court’s rationale has been adopted by other states (Minnesota, Texas), the court’s ruling has generated controversy that may result in further legislative action in Florida and beyond. At the moment there are over $4 trillion dollars held in IRAs, so related asset protection issues are certain to be common in the near future. 

           
          One potential planning option worth exploring is to designate a trust as the beneficiary of the IRA. Although the IRA still converts to a new account type, the creditor protection intrinsic to the trust extends to the inherited IRA. The trust can then be structured so that a named individual has access to the trust without the risk of creditor exposure.

Creditors Might Have Access to Inheritors’ IRA

           A Florida appeals court recently ruled that creditors had access to inherited IRAs previously thought to protected.  The court held that when the owner of an IRA dies, the instrument that passes to the beneficiaries is converted into a completely separate account which is then subject to applicable taxes. The law varies by state, and even the Florida ruling could be subject to further action by the state legislature. Given the uncertainty, the most prudent approach is to get proper counseling when designating your IRA beneficiaries and exploring all your options such as designating a trust as the beneficiary of an IRA.

            The appellant in Robertson v. Deeb contested an order denying his claim of exemption from an inherited IRA. Upon his father’s death, Robertson could choose to convert the inherited IRA into one of two accounts. Since a single owner did not continually maintain the account, the Florida court ruled that statutory protections that ordinarily protect IRAs from creditors did not apply.

            Creditor and tax exemptions for inherited IRAs are still unsettled issues in law. Although the Florida court’s rationale has been adopted by other states (Minnesota, Texas), the court’s ruling has generated controversy that may result in further legislative action in Florida and beyond. At the moment there are over $4 trillion dollars held in IRAs, so related asset protection issues are certain to be common in the near future. 

           
          One potential planning option worth exploring is to designate a trust as the beneficiary of the IRA. Although the IRA still converts to a new account type, the creditor protection intrinsic to the trust extends to the inherited IRA. The trust can then be structured so that a named individual has access to the trust without the risk of creditor exposure.