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Tuesday, January 22, 2008

DIY LEGAL

By Sean Hayden, Esq.

TOPIC: ATTORNEYS

Do It Yourself. Great idea for redoing your kitchen tile. Perhaps not a great idea for creating your own legal documents.

Consumers these days are besieged by ads for internet downloads and store bought mass market do-it-yourself legal kits. These products promise to save you hundreds of dollars in legal fees. However, when one considers the role that a legal document, such as a Last Will and Testament or a Living Trust, plays in your life, it’s important to realize some things are best for professional advice.

This summer after spending a bit too much time in the sun, I noticed a couple of skin moles. Naturally, I was concerned about skin cancer. I could have consulted the internet to self diagnose myself. After all, there are lots of sites with pictures and descriptions of which moles are malignant and benign. Instead, I made an appointment with a pathologist to properly check them out. And a clean bill of health later, I’m glad I did.

I think it’s the same way with legal matters. While we’re not talking about a literal life and death matter, faulty estate documents, in particular, can mean financial ruin for your loved ones after your death. When a prospective client brings in a document he has prepared through an internet or software form, invariably the final product simply does not express what the client intended. Many times the document simply has no legal effect. Interestingly, most of these premade forms carry the disclaimer “You should seek appropriate legal, financial, or other expert advice or assistance as may be required.”

An internet form can, however, provide you with a framework to start thinking about issues you’ve never had to contemplate. And the internet can be a great tool to educate yourself about legal matters so that your representation by an attorney can be more effective. But be aware there is a lot of misinformation out there. (I can’t tell how many people visit my office thinking a Living Trust will save estate taxes or that the City of New York domestic partner registry conveys full inheritance rights.)
Still, it seems many people will avoid seeing a lawyer and opt for DIY because they don’t believe they can afford legal services and they see the internet as a cheaper alternative. Yet I’m amazed to hear of friends who can easily can justify spending on that long weekend to Mexico or that splurge at the Barney’s Sale but will scrimp and save when it comes to medical and legal care. Fortunately, there are plenty of reasonably priced attorneys out there to suit almost anyone’s budget. And at some point, we simply have to decide that one’s well being, whether it is medical or legal, is worth the personal investment.
So remember, DIY may be great for that new kitchen tiling. After all, if you make a mistake you can always do it over. When it comes to estate documents, there is no "do-over." After you pass away, your loved ones may be left picking up the pieces of your bargain.

Tuesday, January 15, 2008

THE INCREDIBLE REVOCABLE LIVING TRUST



TOPIC: TRUSTS AND ESTATES
By Sean Hayden, Esq.

One of the documents new clients most often ask me about is the Revocable Living Trust. If you’ve ever been stuck at home on Saturday nights watching Suze Ormon on CNBC (uh…guilty), you no doubt have heard her sing its praises.

For the rest of you who actually go out every Saturday night, the revocable living trust is a document everyone should have in addition to a basic Last Will and Testament. A Living Trust is a document which allows the assets placed in your trust to avoid probate upon a person’s passing.
Why do we want to avoid probate? (And hey...what is "probate"?)
Probate is a special court in which a Last Will and Testament must be submitted and a special certificate of authority called “Letters Testamentary” must be issued to the Executor of the Last Will. Only then can the assets can be distributed to the beneficiaries. Probate can be very slow, costly and can provide a venue for will contests from disgruntled family members.

So how does the Living Trust work?
Think of a Living Trust as a storage container with a front door, which remains open, and a back door which remains shut. During the lifetime of the person who sets up the Living Trust (we call her the “Grantor”), the Grantor can go in and out of the front door to place assets in the trust, remove assets at any time or even change her mind about the beneficiaries. That’s the “revocable” part. The Grantor is also called the “Initial Trustee” of the trust. Upon the Grantor’s death, the back door opens and the “Trustee” (a person appointed by the Grantor, much like an “Executor” under a Will) can then distribute the assets to the beneficiaries. There is no court procedure and no special certificates to apply for. Assets are swiftly distributed to beneficiaries. That’s great!

Why do you also need a Last Will and Testament?
Well, a Living Trust is “asset specific.” That means the Grantor must specifically itemize each asset and retitle each asset in the name of the Grantor in his capacity as the Trustee. In a Last Will and Testament, you can globally list your assets by specifying something along the lines of “all of my personal possessions, etc.” A person who only has a Living Trust and does not have a Last Will would therefore have assets not covered by any document as it is unlikely a person could possibly update a Living Trust continually to name every possible asset she owns. That’s bad.

So your Living Trust should work with your Last Will to cover your entire estate. However, you will want to make sure you update your Living Trust regularly to ensure as many assets as possible are covered by the Trust. For instance, my clients will visit me for an annual check up meeting to update their Living Trust as well as their other documents.

Together, your Last Will and Testament and your Revocable Living Trust will have you covered...and that's incredible!







Monday, January 14, 2008

CHOOSING AN ATTORNEY

TOPIC: ATTORNEYS

By Sean Hayden, Esq.

You’ve just put in an offer for your dream apartment and the seller’s broker says “So can I have the contact information for your attorney?” You say, “Uhhhh….”

One of the most daunting tasks a person can face is choosing a lawyer. And it not any easier when you’re under a time clock to secure counsel.

An attorney should be a part of your life planning “team.” I always say everyone should have in their back pocket a primary care physician, an accountant, a financial advisor and an attorney.

Often professionals in your life, such as brokers, financial advisors and accountants, will have good recommendations for legal counsel. Some of the best sources for attorneys can also be from your friends. Be sure to ask them what they liked and what they didn’t like about the attorney and whether they would enlist the attorney’s services again.

Once you find an attorney, schedule an initial consultation after confirming your matter is the type of matter handled by the attorney. Also be sure to confirm the cost of the consultation. Many attorneys will offer a consultation for no fee or for a reduced rate.

The initial consultation is your opportunity to interview the lawyer and assess whether he is right for you. It is helpful that you take any relevant questions and documents with you which the attorney may need to adequately address your concerns.

What types of questions you should pose in the consultation?

Does the attorney frequently handle your type of matter? How many similar matters has he handled in the past year? Remember attorneys have become more like doctors in that they specialize. You probably don’t want a lawyer who takes on anything that walks in the door.

Will the attorney you are interviewing be personally handling your file or will be passed to paralegals or to less experienced associate attorneys?

How available is the attorney at the moment? Is his workload such that your matter cannot be given priority?

How will you be billed? Will the attorney bill at a flat rate or an hourly rate?

Finally, what is your feeling about how responsive the attorney will be? Does he seem aloof and not sensitive to your needs? Many a client has been disappointed by his attorney client relationship because an attorney did not promptly return phone calls or repeatedly dismissed the client's concerns about his file. Your attorney doesn't have to be your best friend. However, he should be someone with whom you feel comfortable and someone you trust!

And remember, the consultation is a two way street. The attorney may determine he cannot represent you due to a conflict of interest or he simply doesn't believe the relationship presents the right fit for the parties.


Good luck and good legal health!