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In my time as an Estate Planning Attorney, I have seen the good, the bad and the downright ugly in the financial planning industry. All financial planners are not created equally. To complicate matters there is little governmental regulation in this area. Financial Planners are not regulated as such, they are instead regulated by what types of services they provide. For example, a financial planner who provides advice on securities is regulated as a stock broker or an investment adviser, whereas a financial planner who provides life insurance is regulated as an insurance agent. Often the term financial planner may be misleading, and customers are left in the dark as to what qualifications their financial adviser actually has.
It is important that everyone take charge of their own personal finances. No one should care more about your finances than you! A large part of taking charge of your personal finances is hiring the right professionals to help you make your investment decisions. The big question is: How do you know if you are hiring the right person?
You should be prepared to ask a lot of questions when shopping for a planner. A good place to start is to ask your planner-What experience do you have? Ask him/her planner to describe how long they have been in practice and what types of companies they have been associated with. Don’t be afraid to ask about their work experiences and how that experience relates to their planning approach.
Another good question is- What are your qualifications? Ask if they have ever been licensed? Once you get this information don’t be afraid to do a little poking around on the internet. A good website to do a little checking on your financial adviser is www.finra.org. This website allows you to know what licenses your adviser has earned, whether or not they have had disputes with clients and whether or not they have ever been disciplined. A little background information can go a long way in helping to discover if your financial planner is who he or she claims to be.
Beyond your planners experience and qualifications you should also ask about what types of services they offer, and what their approach to financial planning is. You want to make sure that their approach is not too aggressive or too cautious for your personal situation. Another important question to ask is how their services are paid for. Some advisers are paid a salary by the company they work for, others are paid by commissions from the products they sell, and some charge an hourly rate. Your planner should be able to clearly articulate how he or she is paid and should also be willing to put this in writing.
The above are just a few ideas on how to find a good financial planner. The best advice is to set goals, ask questions, get a plan together, and keep your eye on the ball… and on your financial planner
Next week I will publish my private list of local financial planners to avoid- just kidding! But if any not so good financial planners are reading this (and you know who you are)- shape up or ship out.
Do you have children, or other relatives who have found themselves on the wrong side of the law? Have they spent a little time in the pokey? If any of your potential heirs have spent time incarcerated in the state of Connecticut, you may want to think twice about leaving them anything of value in your estate plan.
Leaving assets to a person who has been a “guest” of the state of Connecticut for any amount of time presents a major good news/ bad news situation for the heir. The good news is, somebody cared about the heir enough to leave him/her something-good news. If we could just stop there, everything would be fine. Rarely is their good news without a little dose of bad news. And now…the bad news. The state wants to be reimbursed for the cost of incarceration. That’s right, the state of Connecticut wants to be paid back for the cost of the inmates “three hots and a cot.” The cost of housing and feeding an inmate over a number of years can really add up. Paying your debt to society never had a more clear meaning.
Thinking about “hiding” the money somewhere? Be forewarned- the Connecticut Department of Revenue Services (DRS) are very, very, very good at their job- finding the money. The DRS has been there and done that and they are always sure to check under the mattress.
There are options (not many) if you want to leave something to someone who is or has been incarcerated. There are some good ideas and some not so good ideas on what to do with an incarcerated beneficiary. It is important to note that there is no magic bullet here; every option has its own unique drawbacks. Professional counsel should be sought before making any decisions or changes to your estate plan.
Since it costs a lot to win, and even more to lose,
You and me bound to spend some time wondering what to choose.
Goes to show, you don’t ever know.
Watch each card you play and play it slow.
Wait until that deal come ‘round.
Don’t you let that deal go down, no, no.
-Deal written by Robert Hunter
Sure, I learned the law behind what is involved in a Will Contest in law school but the practical, nuts and bolts end of a Will Contest can be learned just by listening to one song. A successful Will Contest has the effect of undoing a Will or proving that one Will is valid over another Will; or that the person making the will made some sort of unnatural disposition of assets that was procured by fraud, duress or mistake, among others.
Will Contests are almost impossible to win, largely due to the fact that the person with the best evidence as to whether or not the Will was improper is deceased. I have never really seen anyone win a Will Contest. Even if you “win” do you really “win”- after all it’s going to cost a lot to win and even more to lose (truer words have never been spoken). Something to keep in mind: your worst case scenario- a battle that goes on forever, is your attorney’s best case scenario-a “billable” battle that goes on forever- or at least until the money runs out.
Most of the time a Will Contest amounts to not much more than a common street level shakedown- I bother you until you give me money to go away. Sometimes people use Will Contests not so much as a shakedown, but as an attempt to hurt others- now this is no good for the soul. I propose a better (non legal solution): Avoiding Will Contests is easy- work really hard to make things right during life and not after death by initiating a Will Contest. To paraphrase: make peace with people during their lives not war after they are gone- after all world peace starts at home!
I mean really! Why shell out the big bucks for a law degreewhen you just plan on ripping people off. There is a name for people like this: criminals…. From Today’s New Haven Register:
Attorney accused of using dead aunt’s ATM card:
NEW BRITAIN (AP) — A Vernon attorney is facing charges of forgery, larceny and theft and other charges after police say she withdrew money from her dead aunt’s checking account and used her debit card at Kmart, Target and Toys “R” Us.
Thirty-three-year-old Heather Kaufman’ aunt died in December. According to court documents, Kaufman allegedly used her aunt’s debit card days to make cash withdrawals and shop. They say she also wrote a $1,000 check to her boyfriend.
Court documents show that Kaufman told police that the check and cash withdrawals were to help defray funeral expenses. She says the purchases were for presents for family members that the aunt would have wanted them to have.
A relative assigned by a probate judge to handle the estate told police that more then $3,000 was missing.
Recently, a retired attorney from Litchfield County, plead no contest to two counts of first degree larceny. He was accused of embezzling millions (4.5 million dollars to be exact) from the estate of a client who was suffering from dementia. Although we don’t hear about these cases a lot, instances of elderly financial abuse are on the rise. In our society it is not uncommon for the elderly to fall victim to financial abuse.
Americans over the age of 55 control seventy percent of our nation’s wealth. Many people do not realize the value of their assets and how having these assets makes them vulnerable. Elderly financial abuse can take many different forms. It can be as simple as taking money or property or forging a signature on a check. Or it can be more sophisticated confidence crimes (cons) that use deception and fraud to gain the confidence of the victim.
The perpetrators of these crimes also run the gamut from family members and spouses, to unscrupulous professionals who overcharge for services and products or use their positions of trust to gain the victim’s compliance; to home “helpers” who help themselves to an elderly person’s belongings and assets. More often than not the perpetrators of these crimes are well known to the victim.
There are several indicators that elderly financial abuse is occurring. Be on the lookout for unpaid bills, eviction notices and notices to discontinue utilities. Withdrawals from bank accounts and transfers between accounts that the elderly person cannot explain may also be an indication that something fishy is going on. Belongings and property that are mysteriously missing are also good indicators. The aforementioned indicators of abuse are just a few examples that should raise a red flag with the victim’s family or caregivers. While some of the indicators can be explained by other causes, be on the lookout for patters that suggest a problem may be occurring.
Vigilance is the key to preventing this type of abuse. Take advantage of direct deposit for income checks, including social security, pension and dividend checks. Direct deposit ensures that the funds will go directly into the person’s account. Also, encourage several family members to be involved with the elderly person and have those family members maintain close contact with the elderly person’s caregivers. Family members should visit with the elderly person frequently at different days and times. It is much harder to commit elderly financial abuse when there are many eyes watching.
Typical Clients Involved in Their Typical Daydreams: How Much Does a $200 Last Will and Testament Really Cost?
My wife and I are big music fans (understatement). The other day we were out on our back porch enjoying a little music and a brief dance. My neighbor seeing this, took an opportunity to come on over and chit chat with us. The conversation quickly turned to her ailing mother and her estate plan. My neighbor, let’s call her “Sandy” expressed to me that she was worried about the plan her lawyer had in place for her mom. From previous conversations with Sandy, I knew who her mother’s lawyer was- a real pro, and someone I hold in high regard. I told Sandy that I knew who her mother was using and she should feel very secure that the plan was done correctly. At that point Sandy explained that they decided not to use the lawyer I thought they were using. “Marc, do you know how much she wanted to charge my mom?” Now understand- the lawyer we are talking about is a specialist and is very good at what she does- kind of like myself- so I knew the price range. When she told me the amount- I told her that it seemed reasonable. “Is this what you would charge?” Sandy asked. I told her it was certainly in the range of what I could charge. She seemed a bit put off by this. “My real estate attorney did my mom’s Will for $200!” (yes the same plan she was very worried about).
It turns out that Sandy should have been worried about the plan- in discussing her mother’s situation with her briefly it was clear that this attorney was not asking the right questions and had done a pretty poor job. In short, the real estate attorney masquerading as an estate planning attorney got my neighbor hooked on the idea that this type of planning should only cost $200. Even though she knew this plan was not good for her mom she jumped on it because it was cheap. I could tell it was going to take a lot to wean her from this idea of practically “free” planning. She had turned into a cheap estate plan junkie- and needed detox quick.
“How can he charge so little?” asked Sandy. She was clearly hung up on the price. I explained to her the real cost of a $200 estate plan. I explained that he could charge so little for two possible reasons: First, he charged such a small amount because he only did a small amount of work. A lot of my work as an attorney is just thinking and asking questions and thinking some more. Sure, it doesn’t look like work necessarily but things are going on inside that brain of mine. You’re not really paying for the documents, you’re paying for the counseling. And if you go see a specialist (which in most cases you should) you’re paying for their expert knowledge.
The second reason he could have charged such a small amount for the estate plan is a bit more sinister. This attorney is investing in Sandy’s mother’s death. When her mom does pass he hopes to get to handle her estate. When he probates her estate he can then charge her mom-big bucks and there will be nobody to complain about the bill.
A $200 estate plan is much more costly than the initial bill. That $200 is merely a down payment for some very expensive work in the future. It’s kind of a pay now or pay later situation. If you pay a specialist now you may greatly mitigate or eliminate a large bill later.
There is an old lawyer joke that goes something like this: A lawyer and a doctor find themselves at a cocktail party. The doctor is bombarded with medical questions all evening: “Doc my elbow is bothering me…” “Will grapefruit really lower my blood pressure?” “Can you look at this thing on my back?” During a free moment the doctor strikes up a conversation with the lawyer. He asks him how he deals with the relentless questioning outside of the office. The lawyer explains that when people ask him a legal question- he gives them the appropriate legal advice and then he sends them a bill. This seems to make sense to the doctor- he vows to bill everyone who had asked him a medical question that evening. The next day he prepared the bills and went to put them in his mailbox. When he opened the mailbox he was surprised to find… a bill from the lawyer.
Daughter Recovers Ring Stolen From Her Father’s Body. By Arielle Levin Becker/The Hartford Courant, May 14, 2009.
Corinne D’Onofrio spent the day by her 82-year-old father’s side as he lay dying in the hospital. On his finger he wore a gold ring with a black onyx and a diamond, a family heirloom that she imagined giving to her son one day.
She tried to slip the ring off, but her father’s finger was too swollen.
Don’t worry, D’Onofrio’s husband told her, the funeral home can take care of it.
But someone else beat them to it. And by the time D’Onofrio’s father, Albin Schultz, was taken to the funeral home, there was no ring on his finger — just an indentation where a ring used to be.
Police said that the ring was stolen by Hector Mateo, a transportation aide at Hartford Hospital who took Schultz’s body to the morgue, according to court records. Mateo told police that the ring looked like a ring from his first marriage and that he decided to take it.
Mateo, 29, of New Britain, has been charged with fifth-degree larceny and third-degree forgery. He was arrested on March 16 and is scheduled to appear in court again June 9. He has not yet entered a plea.
In addition to stealing the ring, Mateo is accused of altering a hospital form that showed that Schultz had a ring on his left hand. A Hartford Hospital investigator found that the form listed “Ring on L Hand,” but that there was “scratchy writing over it that was attempting to spell ‘Brace on L Hand,’” according to an arrest warrant affidavit.
Mateo is no longer a Hartford Hospital employee, a hospital spokeswoman said.
When police interviewed him, Mateo initially said only that he saw the ring, but later told police that he took it and tried to cover up the theft. In subsequent conversations, he told police that he was “extremely remorseful,” that he “didn’t know what he was thinking” when he stole the ring and that he was sorry “deep down in his heart,” according to the affidavit.
Mateo, who could not be reached for comment, gave the ring to police. It eventually made its way to D’Onofrio, but only after what she considers an unnecessary runaround dealing with the hospital and the police while she might otherwise have been left to grieve for her father. She put off the arrangements for her father for a week, wondering if the police might need to see his body as evidence.”To think that some lowlife would take something off your mom or dad’s dead body for their own gain,” she said.
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