Debt ceilings, and taxes. Where will the money come from?

How bad does that chart look? And that is pre-deal.

If you haven't heard what is going on, here is a run down:

The government borrows money to pay for things. It has over-extended itself.  It needs to borrow more just so it can pay for what it has already committed to, as it is not taking in as much tax revenue as it has committed to pay out. However, to borrow more it needs permission.

A partisan (and tea party factioned) Capitol Hill saw this looming crisis as a chance to lobby and push for reforms, budget balances, and tax or no tax agendas.

We have until tomorrow to fix it, else the government won't/can't pay its bills, the markets will likely keep crashing down, our credit rating goes worse, the dollar is further devalued, interest rates spike, social security checks could not come...all bad things and more.

But it was avoidable, and this is why you, the conscientious planner should call and or write your Congressman either way this thing turns out.

Whenever a silly thing like this happens, your retirement gets hit. You could've lost 10% last week, maybe more. What would that have paid for? 2 years of retirement? The boat or RV you have always wanted?

Maybe. Or maybe you hedged and bought gold and silver! What great foresight. But for lots of folks, your golden years took a hit this week, after taking a big hit a couple years ago.  Not to mention the jargon filled "QE1, QE2, and their youngest sibling, QE3" that we have had the pleasure of experiencing, which the government thought that by calling printing more money and further devaluing the dollar "quantitative easing," no one would notice.

Here is the secondary problem:
 
Even if the Republicans are successful in a "no tax raises" compromise, the revenue has to come from somewhere. Congress is too scared to raise taxes, because they want to stay in office. Way too expensive to not get re-elected. Take a step down, to the states: State reps and senators won't raise taxes, because its way too expensive to not get re-elected.

What's left? Cities and municipalities. How do they raise money? Property taxes. Who sets these? Appraisal districts, who are not elected. No accountability, and very little recourse. Have you tried to protest your property taxes/valuation recently? Good luck. Having a bad day, and want to see people more angry than you are? Walk into a county appraiser's office. Its awful.

So, that house you have finally paid off, that second home,  and that little investment real estate you and a partner bought in the 80's just became a little more expensive to own, out of thin air, even in a depressed real estate market. Make sense? It shouldn't, but tax revenues are going to have to come from somewhere, and they will come from the bottom if Congress doesn't force them at the top.

There is no such thing as not raising taxes in a time when revenue is needed as badly as it is now. 

Special thanks

A very special thanks to Jen Anderson and GeekGurlDesigns.com for the excellent new layout.

If anyone needs any website or graphic design help, her work is top class.

Will Contests

Maybe I am a sucker for John Grisham books because I like to believe there is still some romance and adventure in being an attorney. Nevertheless, "The Testament" was and is a good primer on the background of what a will contest can be, and how crazy it can get when things go awry.

For those who haven't read it, here is the quick summary (sorry, spoiler alert):  Troy Phelan, a reclusive billionaire, has a big will signing ceremony where he leaves his estate to his several children from various marriages. He video records it and has prominent doctors adjudicate that he is perfectly sane. Unbeknownst to anyone but he and his personal lawyers, he then executes another will, that only leaves his rotten kids enough to pay off their debts, leaves the rest to an illegitimate long lost daughter Rachel (who happens to be a missionary in remote Amazonia), and jumps off the balcony of his building, to his death.

The rotten kids lawyer up,  fight and squabble, and try to contest this last-second will. Phelan's lawyers send a sympathetic-recovering-alcoholic partner from their high-dollar lawfirm to the jungle to find the missionary daughter, and the chaos plays out.



In the real world, will contests happen everyday, even more so when there are significant dollars involved, but people will fight over anything (dad's ole' straight razor was the subject of tens of thousands of legal fees in one case). Aside from fraud or forgery, the main ways to attack a will are:

Failure of execution: someone didn't properly sign or witness the will. If you are in a different room, signed in the wrong order, etc., you can mess this up and the whole thing will becomes invalid.

Lack of Testamentary Capacity: you can be insane one day, and still have the capacity to sign a will the next. Its a low threshold, but the general requirements are:

• Know the nature and extent of your property
• Know who the natural objects of your bounty would be (ie your family/heirs at law)
• Know that you are making a disposition, and the effect of a will
• Know how all these things work together to form an orderly plan of disposing of your property when you die.

This one is tough to prove, and depends on who and what the probate judge will believe. There is also a theory of "lucid interval," where the otherwise incapacitated person wakes up for a minute or an hour, decides he wants to change his will and does, then reverts back into his low mental state. This is most common in those suffering from Alzheimers or dementia. Sounds crazy, because it is crazy.  However, the courts presume a validly executed will is just that, valid, so you really have to go above and beyond to prove this.

Undue Influence: This is the sexy one. This is where the little old person falls in love with their nurse or home health assistant, or gets married to a former playmate of the year. Sometimes there will be a new will, sometimes their won't, but these are where the fights get dirty.  The basic elements to look at here are:

• The presence or existence of a confidential relationship or influential relationship
• The use of this relationship or influence to overpower the mind or natural desires of the testator/gift giver
• The existence of a will or other gift that would have existed but for the exertion of such an influential relationship.

From an unbiased level, who should inherit the old man/woman's billions? The 26 year old adult film star, or the children? The answer may seem simple from a "fairness" standpoint, but you never know all the facts. Were the children given "enough" already? Did they not take care of their elderly relative, or did they have a falling out? At the end of the day, it really doesn't matter. This is America, and in America, you can leave your billions to your kids, your mistress, the Tea Party, or your dog, as long as you don't violate one of the above tests.

Here is some food for thought:

According to www.theroot.com, the gentleman in the hat, an aptly named "Lord Glennconner" has left his millions to his manservant (seen in the picture) changing his will just seven months before his death, disinheriting his 17 year old grandson and his widow.

Seem fair?

Would it change your mind if you knew that Kent Adonai worked for Lord Glennconner for 30 years,  slept at the foot of his bed, walked his pet elephant, cooked and cleaned, and was the one trying to revive Lord Glennconner when he suffered his fatal heart attack?

The lesson is never judge a will contest by the will itself. You have to dig much deeper.

If you or a loved one have experienced any of the above situations, please contact an experienced probate litigation specialist to help represent your interests.

Legal Zoom around the room

Photo and real-life inspiration courtesy of Brian F. Murn, Esq. 

When you show up in Court, you don't expect to see this as the attorney you are up against:

(if you can't see the wording on the folder, it says "LEGAL ZOOM.COM")

Lets get one thing straight- Legal Zoom is not a lawyer. Its a website, allegedly run and maintained by lawyers. Its also been sued several times, for the unauthorized practice of law.

"Wait, but its run by that ROBERT SHAPIRO guy! He defended OJ! So its gotta be good!"

Yes, Robert Shapiro of the O.J. Simpson defense team, is a spokesperson and founder. Yes, Robert Shapiro also has another online venture, related to the O.J. Simpson trial and its aftermath, the aptly named Shoedazzle.com, where he and one of his late defense team member's "famous" daughters, have teamed up.

Can it help you start your business? Sure*. Write a will or trust? Yes*.

(Items with an * should be translated as having the minimum level of competency, and you better hope you don't need any sophisticated planning, advice, or have a complicated family structure. )

A good example of what LegalZoom canNOT do is given here:                                  

Top 10 Planning Scenarios Not Covered by LegalZoom

By: Teresa A. Bush, Esq. (InterActive Legal)

1. Clients who want to leave property to specific people or charities if spouse/descendants are not living.

2. Clients who want to ensure property stays in the family line, rather than passing to son-in-law or daughter-in-law if a child dies.

3. Clients with disabled children/beneficiaries (or who would like to include provisions to apply in case a child develops a disability later in life).

4. Clients who want to include special provisions for beneficiaries who develop substance abuse problems.

5. Clients who would like to protect property from creditors and provide management by leaving it in trust for their spouse.

6. Clients who would like to have property sprinkled out to children at different ages – such as 1/3 at 25, 1/3 at 35, and 1/3 at 45.

7. Clients who would like to put property in trust for children, but make sure all income is given to the child each year.

8. Clients with children from prior marriages, where they may want to exclude certain children, or include step-children.

9. Clients who live in a state where there is state estate taxation.

10. Clients with specific residency issues, such as community property state residents, resident aliens, or clients with property in several states.

Still not enough reasons to make you go use a real lawyer? 

Take a look at this sample legal zoom will, with comments from an established attorney here. Its just not the same thing. Maybe that's why its cheaper?

Countless attorneys have already written on this, but as long as the internet is around, there are going to be "internet attorneys." Use them at your own peril, and feel confident that the money you saved by not going to a real lawyer on the front end will be spent and multiplied out of your estate in handling the mess that you created. 

So you died without a will...

Then you probably have bigger things to worry about, but your family might be wondering who gets your baseball card collection (or your house and millions, if you are lucky).
Here is a good basic chart to show what happens if there is no will:

CP= community property
SP=Separate property
RE= Real Estate.
(chart credited to www.pv-law.com)