Category Archives: Financial Powers of Attorney

Adjustable Mortgages: Like ‘Em Like Facebook’s Zuckerberg?

Posted on by under Business Succession Planning, Business Transitions, Estate Planning, Estate Tax, Family Business, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

Mark Zuckerberg, the multi-billionaire co-founder of Facebook, recently took out an adjustable mortgage on his house. But this article wisely cautions that adjustable rate mortgages are not usually a good idea. In Zuckerberg’s case, the idea might make sense because he can invest the money in more profitable ways. Then again, most of us don’t have a $15-20 billion net worth to invest. But like Zuckerberg probably did around the Facebook IPO and his marriage the next day, you should visit your estate planning lawyer to be sure your estate plan is optimized to provide for your family and continue your legacy in the community. If you’ve gotten married, divorced, had children, or had other major life changes happening lately (or coming on the horizon in the next few months), you owe it to yourself and your family to be sure your estate plan is tailored to meet your needs.

Call our office (913-707-9220) or email us (steve@johnsonlawkc.com) for a convenient appointment to review your estate plan. We offer a free 30 minute consultation.

(c) 2012, Stephen M. Johnson, Esq.

Gift Giving in 2012

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Family Business, Financial Powers of Attorney, Gift Tax, Gifts to Minors, Kansas, Missouri, Small Business, Trusts, Wills

The NYT has this interesting blog post encouraging wealthy individuals and families to take advantage of the $5.12 million gift tax exemption for 2012. Remember, on New Year’s Day 2013, the gift tax exemption goes back to $1 million per person, meaning you’ll lose the opportunity to give $4.12 million tax free. And the gift tax rates are scheduled to rise from the current 35% (for amounts over the $5.12 million exemption).

Does your financial power of attorney document include gifting provisions if you’re incapacitated? If not, you may need a new power of attorney.

If you’re considering giving gifts this year to family members, remember the old adage that there’s no time like the present. Call (913-707-9220) or email our office (steve@johnsonlawkc.com) for convenient appointment to discuss your gift giving strategy for 2012 and a complimentary 30 minute consultation.

(c) 2012, Stephen M. Johnson, Esq.

Probate and attorneys’ fees

Posted on by under Business Succession Planning, Estate Planning, Estate Tax, Family Business, Financial Powers of Attorney, Kansas, Living Wills, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

Here’s a cautionary story from the Daily Mail about a wealthy Connecticut man who died, leaving an estate of $162 million, in 1986, which was consumed by attorney’s fees during the lengthy probate process. The Connecticut story was an extreme case and no doubt left the family displeased with their attorneys. Probate cases are usually completed within a few months to year or so, depending on the complexity of the assets involved and how cooperative the heirs are. But probate horror stories like this one are what cause many people to avoid probate with a trust, joint tenancy property, transfer on death or pay on death, and other probate-avoidance techniques.

If you’re involved in a probate estate or need a good estate plan to avoid probate, call (913-707-9220) or email (steve@johnsonlawkc.com) our office, Johnson Law KC LLC, for a convenient complimentary consultation.

(c) 2012, Stephen M. Johnson, Esq.

The New Economy: Time for an Estate Planning Checkup

Posted on by under Business Succession Planning, Estate Planning, Family Business, Financial Powers of Attorney, Kansas, Living Wills, Medical Powers of Attorney, Missouri, Small Business, Trusts, Wills

The Wall Street Journal’s Real Time Economics blog has this post detailing a new report from the Federal Reserve that familys’ net worth fell nearly 40% between 2007 and 2010, as the financial crisis engulfed the economy and left a stubborn recession in its wake. The new economic realities we find ourselves in nationally and globally call for a review of your estate plan. Whether you’ve got an older estate plan that’s been in place for years or are a young professional or new entrepreneur who’s never done estate planning before, we can help guide you through the process. Call (913-707-9220) or email (steve@johnsonlawkc.com) our office, Johnson Law KC LLC, for a convenient appointment and complimentary consultation.

(c) 2012, Stephen M. Johnson, Esq.

Happy Tax Day!

Posted on by under Business Succession Planning, Business Transitions, Digital Estate Planning, Estate Planning, Financial Powers of Attorney, Income Tax, Kansas, Living Wills, Medical Powers of Attorney, Missouri, Trusts, Wills

Happy tax day and many happy returns (or refunds, as the case may be)!

In unrelated news, the Daily Mail (UK) has this article about the dangers of using Google to find medical treatments and self-medicating without seeing a doctor about medical issues. A parallel problem exists in the legal world: many people use the Internet to try and solve their legal issues without consulting with an attorney. Remember, if you use an online legal form, you’re doing so at your own risk. If it’s anything important, or that could affect your rights,  your finances, or your family, you should consult with an attorney. Only an attorney has been through three years of law school, passed a bar exam, and become well versed in handling your particular issue. Some online legal resources have useful insights, but many are riddled with errors, hopelessly obsolete, filled with misstatements of the law, or  misleading or incomplete documents that won’t hold up in court (and aren’t worth the paper they’re printed on).

At Johnson Law KC LLC, we constantly review and revise our documents and keep up to the moment on new legal developments to ensure our clients always get the best representation and legal advice. If we can help you or your loved ones, please call (913-707-9220) or email (steve@johnsonlawkc.com) for a convenient appointment.

(c) 2012, Stephen M. Johnson, Esq.

Take Your Time …. Hurry Up!

Posted on by under Business Succession Planning, Business Transitions, Digital Estate Planning, Estate Planning, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

A brief story: In high school trigonometry class, my math teacher used to give us frequent quizzes over basic trigonometry equations and other pre-calculus functions. I vividly recall him pacing up and down the thin aisles of desks (about 20 or 30 students), cradling his hands behind his back, and looking out over the class through his glasses while calling out  “take your time,” then “hurry up!” a few seconds later. It was a charming eccentricity if you weren’t knee deep in a math problem, or an annoying interruption if you were racking your brain to remember that math formula you had stayed up late the night before trying to learn.

The changing economic realities, increased life spans, and increasing standards of living are causing many retirees to go on the “hurry-up offense” with retirement planning. There’s a similar phenomenon in estate planning. The tolling of the New Year bells draws closer, you get married and have a child, you get divorced, a relative dies and you receive an inheritance, or you or your spouse get the dreaded grim health news from the doctor. Time to visit your estate planning attorney.

While several “hurry-up offense” estate planning tactics that can be helpful, I recommend confronting these issues when you are healthy and have some time to contemplate how you want your last affairs handled. We all know that it’s best to make big decisions when you’re calm, relaxed, and feeling great. A Will or trust, living will, and durable financial and medical powers of attorney are the estate planning building blocks that every adult needs. Cross an item off your new year’s to do list, or make a new resolution to take care of your estate planning needs this year. Need to do any digital estate planning for your computer, email, Facebook, LinkedIn, online banking, or other valuable electronic information? Have a small business you’re looking to transition, or thinking about family business succession and your kids? We can help with that too. Call or email us any time to set up a convenient appointment and start off 2012 right with the peace of mind that good planning brings.

(c) 2012, Stephen M. Johnson, Esq.

Conflicts of interest

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Gift Tax, Illiquid Assets, Income Tax, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Prenups, Probate, Small Business, Trusts, Wills

This Daily Mail article highlights a classic case of lawyers (and accountants) getting removed from a case by the judge because of conflicts of interest, in the Clark case, for each being slated for an $8 million bequest from the estate. This is a classic legal ethics question that confronts estate planning attorneys – can the lawyer accept a gift from the estate of the deceased? Short answer is “no.” If a lawyer drafts estate planning documents for family members, the relative is entitled to independent legal counsel if they so choose and the lawyer may not receive more than an intestate share of the estate (e.g. what they would’ve received if the relative had died without a will). A client can theoretically leave gifts to their lawyer or other professional advisors in a will or trust, but those gifts are automatically suspect and best practice is to only be paid your attorney’s fees and not accept gifts from a client’s estate.

If you need legal counsel with year end estate planning or if you’re an attorney who has a conflict of interest and need independent legal counsel to help, give me a call or send me an email. Merry Christmas and see you in the New Year – 2012, here we come!

(c) 2011, Stephen M. Johnson, Esq.

Time to Sell Your Small Business?

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Illiquid Assets, Kansas, LLCs, Missouri, Small Business, Trusts, Wills

Interesting NY Times article about business owners thinking of selling in the current economy. There’s a wonderful piece of old-fashioned, homespun wisdom quoted: “success is when opportunity and preparation intersect.” Successful business people have to be alert for new and emerging opportunities to capitalize on those venues and maximize their enterprise profitability. Perhaps a few business successes come down to being in the right place in the right time, serendipity, or luck, but most business people (and certainly most lawyers) would say that chance favors the prepared – you have to do your homework, which will often show you openings or opportunities that your competitors don’t see. Or as one early rising quipster put it, the comfort of being awake near dawn is “my competition is still sleeping,” so an edge or lead can be acquired. In this economy, business people and successful individuals must capitalize on every edge or lead they can find or create to distinguish themselves and get ahead.

The article’s advice reminds me of a piece of financial/investment advice I read a couple years ago in The Great Depression Ahead by (gloom and doom) economist Harry S. Dent. If I can help you in the process of selling your business or thinking about the pros and cons of the sale decision, give me a call or email me to set up a convenient appointment. If you are going to sell your business, getting the wheels of the deal in motion before December 31 is ideal for tax purposes.

(c) 2011, Stephen M. Johnson, Esq.

Planning for Life’s Unexpected Moments

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Gift Tax, Gifts to Minors, Illiquid Assets, Income Tax, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

CNBC has this story of a family who benefited greatly from doing basic estate planning, when the unexpected happened and the father and family patriarch died suddenly. Every adult – regardless of age, wealth level, or other factors – needs a will, a living will, and medical and financial durable powers of attorney. To live life without these basic estate planning documents is to play Russian roulette with your future and your family’s.

(c) 2011, Stephen M. Johnson, Esq. All rights reserved.

The Brave New World of Estate Planning – Trusts and Estates in 2011

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Gift Tax, Gifts to Minors, Illiquid Assets, Kansas, LLCs, Missouri, Probate, Small Business, Trusts, Wills

As the 2010 holiday season descended upon America, Congress passed and President Obama signed an extension of the 2001 Bush tax cuts.  The new tax law has many provisions that last until the 2012 election, but most significant for our purposes are the new estate tax and the new gift tax.  The federal estate tax is now 35% on any estates over $5 million for a single person or $10 million for a married couple.  The new gift tax is 50% of any gift to a person of over $13,000 per year with the lifetime exclusion (the maximum amount you can give to someone other than a spouse during your lifetime) now at $5 million from its prior $1 million threshold.  Count on the 2001 Bush tax cut extension to be a big deal for President Obama and his Republican colleagues in 2012, especially with the economic cauldron of high unemployment, exploding deficits, promiscuous and unsustainable spending, a weakening dollar, states teetering on the edge of bankruptcy, and potential inflationary pressures, all boiling to a simmering storm of uncertainty and populist discontent.

Many estate planning attorneys, including many that I have talked with in the Kansas City area, find these new developments very troublesome.  Won’t it eliminate our clients? Not many people have $5 or $10 million, the argument goes.  Those that do already have relationships with private banks, investment firms, and noted law firms. Does anyone still need a trust?  Or do we simply terminate trusts and execute new I-love-you wills that leave everything to the spouse and children?  Won’t that kill our revenue streams from trust drafting and asset re-titling? Is it worth it to be an estate planning attorney any more? These are all good questions that need to be answered and I plan to answer soon in much more detail.

For now, let’s focus on what every client needs: (1) a will (2) a living will (3) a durable medical power of attorney and (4) a durable financial power of attorney.  Anyone over the age of 18 who doesn’t have these legal instruments in place risks catastrophic consequences a la Terri Schiavo and Nancy Cruzan if they get in a car accident or die leaving student loan debt (or other secured debts, like a home mortgage) for their parents (buying life insurance to pay these debts off may be wise). If you are married or have children, the stakes are even higher – your spouse might have to probate your estate and get the Court to appoint them Guardian and Conservator of your child.

Maybe you’re an individual and figure you’re fine, you don’t drive a Ferrari or have millions of dollars, so you don’t need an estate plan, right? Wrong. An estate plan doesn’t need to be expensive or complicated, but you need one, whether you’re Bill Gates or Bob Jones the college student.  Call (913-707-9220) or email me (steve@johnsonlawkc.com) if I can help.

(C) 2011, Stephen M. Johnson