Bar Bulletin: Top 10 issues lawyers ignore about their own personal estate planning

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  • | 12:00 p.m. October 24, 2016
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We counsel others. We advocate for others. We plan for others.

However, many of us do not do the same for ourselves because we are too busy or we don’t face the reality that we may not always be healthy or immortal. So, are you prepared for your own disability or your own passing?

Here’s my top 10 list of what most lawyers ignore about their own estate planning:

1. Having no plan at all

We are busy solving other people’s problems.

We focus on practicing law, our clients, managing the office and the staff, or being accountable to the demands of the partners of the firm. Emails, letters, pleadings, meetings, hearings, Bar functions and community involvement must be addressed every day and the list goes on.

Somewhere in the mix, you may get married and have children. You may have to start caring for your parents. Even if your office does not change, your life does.

What is your contingency plan if you are disabled or die?

2. Having a do-it-yourself plan

Warren Burger, former chief justice of the U.S. Supreme Court, passed away in June 1994. He typed his own 176-word will, filled with spelling errors and substantive omissions, including failing to give the executor the ability to manage the estate without court orders.

Due to his homemade effort, Burger’s estate had to pay $450,000 in taxes, along with the costs of probate, for a $1.8 million estate.

How much will it cost your family for your DIY plan?

3. Updating your health care surrogate

If you are incapable of making medical decisions for yourself, you must have someone designated to make those decisions for you.

If you did it years ago, is that person still willing and able? If not, your family will have to go the unpleasant route of guardianship.

Do you want the details of your disability to be disclosed in the court files?

4. Updating your agent under a durable power of attorney

Naming an agent under your durable power of attorney gives someone sweeping powers over the management of all you own and they may act as though they are in your shoes.

If you are in a second marriage or in a relationship with someone you have not yet married, do they understand your plan? Do your immediate family members know who you want to manage your assets?

5. Underfunding your life insurance

Several years ago a well-known judge passed away suddenly at a young age.

Soon after, I received a request for a donation to support his wife and minor children –– he had no life insurance.

Perhaps he was uninsurable, but more likely he did not believe he needed it.

Can you imagine leaving your family in a position where they have to ask for donations from your colleagues?

6. Naming your estate as beneficiary

Probate is not a dirty word, but many times it is an unnecessary expense.

Do not neglect to name a beneficiary. If you want someone to oversee your estate, do not name your estate as beneficiary. A trust would accomplish that purpose without the expense of probate.

Did you name your estate as beneficiary without considering the purpose of a trust?

7.  Updating your beneficiary

Every year, make sure your beneficiary designations, both primary and secondary, are reviewed.

Too often, an attorney will have outdated designations, such as one who is now incompetent or deceased.

Have you reviewed your beneficiary designations to account for outdated or new family additions?

8. Naming a minor child as a beneficiary

Proceeds payable outright to a minor child above $15,000 require a guardianship be established. At age 18 the child receives it all in one lump sum.

Set up a trust for your children and name it as beneficiary.

Do you really intend for your child to receive all their inheritance at age 18 with no restrictions or guidance?

9. Updating your inventory attorney with The Florida Bar

While you may have taken care of your personal affairs, someone has to take care of your office. You are required to name an inventory attorney if you are moving or closing your practice.

It is easier for those in larger firms to manage such a change. However, small firms or solo practice attorneys should give more thought to who they name. Select someone that is reasonable, attentive and responsive to your next of kin.

Are you sure you have named someone who will work well with your family to wind up business quickly?

10. Call on your resources

Chances are you know a colleague who focuses on estate planning. Give them a call and they will help you focus on your own affairs.

Many times, that call will alert you to what you will be leaving behind for your family to sort out.

Have you reached out to a colleague to help you think through the best way your family can manage your affairs in case of your disability or death?

As busy as you may be or as immortal as you may feel, it does not negate the reality that life changes, even for lawyers.

Do not ignore your own estate plans.

Rose Marie K. Preddy is chair of the Estate Planning and Tax Committee of The Jacksonville Bar Association and principal of the Preddy Law Firm.