Leona Helmsley

Leona Helmsley, the “Queen of Mean,” amassed a fortune worth approximately $4 billion during her time as a real estate tycoon in Manhattan. When she passed away in 2007, her will caught the attention of the national media and estate planning experts everywhere due to the unusual bequest she made: $12 million was to go to her dog, Trouble, while she left nothing for two of her grandchildren. A legal battle ensued which led to the dog receiving just $2 million from its original bequest, while the two grandchildren were awarded $6 million each.

Sharon Disney Lund

Walt Disney’s youngest daughter, Sharon Disney Lund, passed away in 1993 and left behind a trust fund worth $400 million for her twin children, Brad and Michelle. Since that time, the twins have found themselves on opposing sides of a legal battle with their father and the trustees of the fund accusing each other of mismanagement and incompetence. The main issue comes down to the fact that the trustees claim Brad is unable to handle his inheritance because of cognitive impairments and have thus stopped paying out his share, while his father claims that Michelle, who he believes has brain damage after suffering from an aneurysm in 2009, is acting under the influence of the trustees. 

Brooke Astor

The Astor family is synonymous with “old money” – but that doesn’t mean it’s immune to legal problems stemming from inheritance issues. When Brooke Astor died in 2007, her son Anthony and his son Phillip began feuding over the way Anthony handled his mother’s finances and estate in the last years of her life. Anthony was found guilty of fraud, larceny, and conspiracy stemming from accusations that he swindled his mother’s estate, worth almost $200 million, out of about $60 million through unlawful updates to her estate plan while also forcing his infirmed mother to live in squalid surroundings.

John Seward Johnson I

John Seward Johnson I, co-founder of Johnson & Johnson and Robert Wood Johnson Medical Center, passed away in 1983 and left almost his entire estate to his third wife – thereby cutting out his children. His children immediately contested Johnson’s will, bringing up claims of abuse and undue influence against Johnson’s widow, and were ultimately awarded $106 million out of an estate worth approximately $400 million. Legal fees for this lawsuit were estimated to total $10 million.

Howard Marshall II

This case is more famous for the beneficiary than the grantor: in 1994, Anna Nicole Smith, a 26-year-old Playboy Playmate, married 89-year-old J. Howard Marshall II, an oil magnate who had a net worth of $1.6 billion. Of course, many speculated that Smith married Marshall merely for his money. When Howard died in 1995, it was revealed in his Last Will and Testament that he did not leave any money to Smith, instead leaving most of his vast fortune to his son. Smith was involved in legal battles to gain control of at least half of the fortune, which she believed she was entitled to, right up to the time of her death in 2007. The case was finally settled against Smith in 2011 – 16 years after Marshall died.

Conclusion

While these are all extreme cases involving individuals worth millions – if not billions – of dollars, Minnesota estate planning attorneys point out that the problem in all of these cases came down to the fact that the estate plans were not set up correctly. Proper estate planning can avoid these kinds of legal messes, and it can be even more important when you’re not dealing with millions of dollars; if an estate is worth just a few hundred thousand dollars and your family goes to war, the inheritance can quickly be eaten up by legal fees.

If you have questions about the effectiveness of your current estate plan, or if you would like to set up a new estate plan that meets your needs and is created to stand up against family fighting when you are gone, give our Monticello estate planning law office a call at (763) 244-2949 to set up a consultation.

What exactly is covered?

All legal insurance plans will hype up the benefits they offer, but you need to dig a little deeper to understand what is covered. One of the benefits these plans like to advertise is coverage for estate planning. Some plans do actually cover a complete estate plan – a will and/or trust, power of attorney, and health care directive. However, other plans will only cover a “simple” will and define what qualifies as a “simple” will so narrowly that anyone who actually needs a will won’t qualify. Some plans will only cover advice or letter writing by a lawyer, but don’t offer much when it comes to actual legal work – drafting pleadings or representing you in court. Some plans offer a discount on an attorney’s fees – but sometimes this discount is only offered on an hourly rate, not on a flat fee service. Make sure you understand what is covered under the plan and what is not.

Are the benefits something that will actually benefit you?

Many plans will offer representation on speeding tickets, but how many speeding tickets do you expect to contest next year? Consider whether the benefits offered are something that you can benefit from. If you are not likely to use any of the benefits offered, it does not make sense to sign up for a legal insurance plan. However, if you know you will be getting divorced after the first of the year, or you are truly committed to finally getting your estate plan done – and you know that the plan provides the coverage you need – it might make sense to enroll.

What lawyers accept the plan? How do you find a lawyer on the plan? Can you choose which lawyer you use?  

The benefits available through a legal insurance plan is only one consideration. It is also important to understand what lawyers will accept the plan and the process for working with a lawyer on the plan. Most legal insurance plans have a list of “in-network” attorneys that will accept the plan. Some plans have a strict process you must follow to be paired up with their attorney. Other plans will give you a long list of in-network attorneys or let you find an in-network attorney on your own (i.e. from the recommendation of a coworker). The more freedom you have in selecting the attorney, and the more in-network attorneys in your area, the more likely you will be to utilize your legal insurance plan. If your only options for attorneys are a big firm downtown in the city an hour away or the one attorney your neighbor had a bad experience with you likely won’t use the plan at all.

My experience with legal insurance plans and the one legal insurance plan I would recommend.

Over the last decade I have had some experience with a variety of legal insurance plans. As an attorney I have worked with a couple, I have checked into or considered working with a few more, and I have talked to many clients and potential clients who have had a legal insurance plan. While some plans have been alright, there have been issues, many of which I identified above. The plans don’t always provide the actual benefits the clients thought they would. There may not be any local in-network attorneys; or the client wasn’t happy with the attorney choices provided. Some plans expect the attorneys to work for such extremely low rates I wonder why a lawyer would sign up with that plan. Some plans provide little to no support for the clients or the attorneys through the process. There’s a variety of legal insurance plans out there and it is important to do your homework before signing up with one. Based on both my experience as an attorney and my clients’ experiences, I have been most impressed with ARAG and that is the one legal insurance plan I would recommend.

From a client perspective, ARAG has decent coverage. One benefit they offer is a complete estate plan – a Will with Power of Attorney and Health Care directive, and when needed a Trust, including deeds for real estate. They also offer a wide range of benefits in family law matters. While ARAG does provide coverage in other areas of law as well, my practice is limited to estate planning and family law, so I can’t speak directly to the value of that coverage. Finding an attorney in the ARAG network is easy. My clients have reported they are typically given a list of three attorneys who accept ARAG, but when they have asked for more information they have been given a longer list of in-network attorneys. While the most common way to connect with an attorney is by contacting ARAG directly and receiving referrals from them, it is also possible to choose an attorney you know who is in the ARAG network. I have had ARAG clients seek me out after getting my name from one of their colleagues who also had the ARAG plan. My ARAG clients have also reported that it is a very easy process to contact ARAG, provide the information on their legal needs, and receive a Case Assist number.

From a lawyer perspective, ARAG has been great to work with. To be an ARAG in-network attorney I agree to accept ARAG cases based on their fee schedule. While the fees are discounted from my normal rates, it is still a fair rate for my work. They have an easy online portal where I sign on, enter my client’s Case Assist number, and when the case is done submit my claim. ARAG then quickly processes the claim and pays my invoice for the covered work by direct deposit. ARAG has been great to work with on my end.

If your employer is offering ARAG as their legal insurance provider, seriously consider signing up this year. If your employer is offering another legal insurance provider, consider asking your coworkers if they have any experience with the plan and be sure you understand the plan benefits and available attorneys before making your decision.

If you are an ARAG client, please keep me in mind if you need a Minnesota estate planning or family law attorney.

Probate, trusts, and intestate succession (when someone dies without leaving a will) are governed by laws which vary from state to state, as well as federal laws pertaining to inheritance and tax issues. Each jurisdiction has its own requirements, and failure to adhere to all of them could invalidate your estate planning documents. Many online document services offer standardized legal forms for common estate planning tools including wills, trusts or powers of attorney. However, it is impossible to draft a legal document that covers all variations from one state to another, and using a form or procedure not specifically designed to comply with the laws in your jurisdiction could invalidate the entire process.

Another risk involves the process by which the documents you purchased online are executed and witnessed or notarized. These requirements vary, and if your state’s signature and witness requirements are not followed exactly at the time the will or other documents are executed, they could be found to be invalid. Of course, this finding would only be made long after you have passed, so you cannot express your wishes or revise the documents to be in compliance.

Additionally, the online document preparation process affords you absolutely no specific advice about what is best for you and your family. An estate planning attorney can help your heirs avoid probate altogether, maximize tax savings, and arrange for seamless transfer of assets through other means, including titling property in joint tenancy or establishing “pay on death” or “transfer on death” beneficiaries for certain assets, such as bank accounts, retirement accounts or vehicles. In many states, living trusts are the recommended vehicle for transferring assets, allowing the estate to avoid probate. Trusts are also advantageous in that they protect the privacy of you and your family; they are not public records, whereas documents filed with the court in a probate proceeding can be viewed by the public. There are other factors to consider, as well, which can only be identified and addressed by an attorney; no online resource can flag all potential concerns and provide you with appropriate recommendations.

By implementing the correct plan now, you will save your loved ones time, frustration and potentially a great deal of money. In most cases, proper estate planning that is tailored to your specific situation can avoid probate altogether, and ensure the transfer of your property happens quickly and with a minimum amount of paperwork. If your estate is large, it may be subject to inheritance tax unless the proper estate planning measures are put in place. A qualified estate planning attorney can provide you with recommendations that will preserve as much of your estate as possible, so it can be distributed to your beneficiaries. And that’s something no website can deliver.

The proliferation of DIY websites and non-attorney legal document preparers give the impression that the process is simpler than it is. These services can help you deal with the court forms required to dissolve a marriage, including financial disclosures, motions, hearing notices and child support paperwork. It’s tempting to save money by using one of these services to prepare and file your divorce forms without using a lawyer.

Unfortunately, these services will leave you in the lurch when things do not go as planned, as they cannot offer you any legal advice or engage in any negotiations on your behalf. Worse still, they cannot point out the pitfalls contained in your paperwork which can pose risks to your financial future long after you think you’ve put the marriage behind you.

The typical do-it-yourselfer believes that everything is correctly resolved because the court accepted and processed the forms and has issued the divorce decree. However, this may or may not be the case; and any problems can remain undiscovered for years until, for example, one spouse embarks on a significant financial transaction such as purchasing a home.

A common scenario involves incomplete (or incorrect) provisions in a marital settlement agreement, leaving both spouses legally on the hook for a mortgage. What happens when the spouse who kept the home and obligated to make the monthly payments fails to do so? What happens when the other spouse applies for a mortgage on a new home, but the amount of the monthly payment of the previous mortgage is still considered when calculating the debt-to-income ratio? This is just one example of how “saving money” on the front end of your divorce can cost you greatly in the future.

Even if your divorce is “uncontested,” in that you and your spouse agree on all of the settlement terms, getting legal advice upfront will ensure the process goes smoothly and that you do not encounter any unpleasant surprises in the future. A  family law attorney can identify what issues must be addressed, point out potential negative consequences of certain decisions, and let you know what to expect throughout the divorce process.

If your divorce case is “contested,” meaning you cannot agree on terms regarding your property or children, it is important that you consult with a lawyer to obtain a realistic idea of what you can expect based on your legal rights under the circumstances. And, unlike the DIY services, an attorney can also represent your interests during settlement negotiations. If settlement negotiations are unsuccessful, your lawyer can ensure the court fully considers all information in your favor prior to making any rulings.

Keep in mind the legal field is notoriously bad about publicizing information on legal fees. Law firm websites rarely contain information on what or how they charge for websites. Even between lawyers the topic of legal fees is often taboo. This general attitude against publicizing fees can make it hard to get a good feel for what the going rate in your community is. When trying to compare the cost for estate planning it is important to compare apples to apples and understand what it is you are comparing.

The first thing you should ask is how are fees calculated?

Legal fees for estate planning can be calculated on an hourly basis or a flat fee for the service. With an hourly fee it may be hard to predict ahead of time what the total cost will be, whereas a flat fee can give you the total cost before you start. An estate plan for a flat fee of $1,000 will cost less than an estate plan charged at $200 an hour for a total of 6 hours. A case that one firm spends 5 hours on, another firm could spend 10 hours on.

The second question to ask is what is included?

Sometimes the price you will be quoted includes ONLY the will. Only later will you learn that if you want a complete estate plan that includes important legal documents such as Health Care Directives and Powers of Attorney you will be charged more. There may be additional costs involved for phone calls, emails, or meetings, either during the initial process or later on if you have questions. There may even be hidden costs for copies or postage. When comparing costs be sure to ask what all is included in the quoted price and what extra charges you can expect.

The final thing to keep in mind is the fact that a Will is just one aspect of estate planning.

A Will only comes into play after your death, if you have probate assets. A Will does not override beneficiary designations or joint assets. A Will does not control what may happen if you are incapacitated. There is no one-size-fit-all simple Will. 

That’s why we take a Total Estate Planning approach at Lewis Kannegieter Law, Ltd. Total Estate Planning takes a holistic approach considering both the legal process as well as the personal and emotional needs of the client. With our Total Estate Planning packages clients receive a comprehensive plan, including but not limited to a Will, Health Care Directive, Power of Attorney, and our exclusive Total Estate Planning Organizer. You will also receive an education on the legal process and a trusted advisor who will be with you every step of the way. We make sure you, and your loved ones, are as prepared as possible for whatever comes your way.

Total Estate Planning packages are offered on an all-inclusive flat fee basis. During the Personal Strategy Session we assess your situation, explain your options, and together choose the type of plan that meets your needs and accomplishes your goals. Before retaining our services you will know the total flat fee cost of your estate plan. While we do offer a wide range of packages to fit each client’s specific legal needs, our  most popular packages range from approximately $500 to $1,500.

What is mediation?

Mediation is the process where a neutral third party oversees a conversation between parties, with the goal of helping the parties talk to each other and reach an agreement on disputes. In a traditional facilitative mediation, the mediator does not give any opinions or feedback to the parties (which can be provided in an evaluative mediation). While some mediators are also lawyers, there is no requirement that a mediator have legal experience. As a neutral third party, mediators are not to give legal advice to the parties nor assist with drafting the legal court documents (even if the mediator is also a lawyer). Many mediators will draft a memorandum of understanding outlining any agreements reached at mediation, but this is rarely a legally binding document or submitted to the court.

Misconception: We can use a mediator instead of a lawyer.

While some mediators are also lawyers and vice versa, mediator and lawyer are two distinct roles and the same professional can not ethically wear both hats in the same case. A mediator facilitates the conversation and encourages the parties to reach an agreement. A lawyer guides the client through the legal process, providing legal advice and preparing legal documents. While there may be some overlap in the subject matter, a divorce mediator and a divorce lawyer are not interchangeable.  Unless the parties are prepared to handle the court process pro se (representing themselves) and have a sufficient understanding of the legal issues, their rights, and the consequences of their agreement, a lawyer will be needed in addition to the mediator.

Misconception: If we want a friendly divorce, we need to use a mediator.

In some cases a divorcing couple are able to reach agreements on their own. They trust each other and are able to communicate easily. They want to have a friendly divorce. For this couple mediation would be a waste of time and money. They don’t need a third party to help them talk to each other when they are able to communicate themselves. They don’t need mediation to reach an agreement they have already reached. There are a variety of ways to have a friendly divorce that do not require mediation, including an uncontested divorce or collaborative divorce.

Misconception: We’ll always save money going to mediation.

While resolving disputes before trial is always good for saving money, mediation is not always the answer. For the couple able to communicate and reach agreement on their own, mediation is an unnecessary expense. For the couple who choose to hire a mediator instead of a lawyer, only to discover they do need a lawyer to handle the court process, or worse, to fix the problems their pro se divorce created, mediation does not save money.  For the couple with a more complex situation, extremely different opinions, and/or a relationship so deteriorated that there is no trust or ability to communicate, meditation alone (without the advice and guidance of attorneys) is not likely to be productive and can add to the overall expense of the process instead of saving the parties money.
Mediation can be a great tool in the divorce process. But it is only one tool in an entire toolbox and is not the answer for everyone.