Jarvis Law Office

Untraceable Bonds, Zero Credentials and Investors Who Believed a Con Artist

John T. Burns III lied and cheated a group of a dozen retirees, as reported in The Naperville Sun, “Naperville Man gets Prison for Role in $28 Million Investment Scam.” A mortgage salesman with no investment or estate planning credentials, he must have talked a good game to get them to part with their hard-earned retirement funds. But that was just the beginning.

A jury convicted Burns of wire fraud and mail fraud for his part of a larger Ponzi scheme, which bilked $28 million out of 120 people. Burns identified potential investors through seminars that promoted his presentation and offered a free meal to attendees. He then followed up with prospective clients and pitched what he claimed was a uniquely profitable investment opportunity in Turkish bonds. But Burns didn't tell them that the Turkish bonds didn't exist. Their investments were used to pay other investors in the scheme.

USA Retirement Management was ordered out of business in 2010 by the U.S. Securities and Exchange Commission. With no prior experience in estate planning or handling investments for clients, Burns held himself out as an experienced, certified estate planner to scam his clients.

If something sounds too good to be true—it probably is. Talk with a qualified estate planning attorney and resist the urge to get something for nothing.

Reference: Naperville Sun (August 13, 2015) “Naperville Man gets Prison for Role in $28 million Investment Scam”

Should You Have a Trust?

According to financialplanning.com’s post “Should Estate Plans Rely on Trusts?,” people structure their estate plan to include trusts for a number of reasons. In some instances, the trust functions as a contingent beneficiary, usually when there are minor children involved, and the trust assigns a guardian for the children until they come of age. Assets held in trust are not subject to probate at death, which is useful if a person owns property in multiple states, thereby avoiding probate in each state.

Implementing a trust provides control for assets in the event of incapacity. A co-trustee or successor trustee will take over the management of the trust assets. Another nice thing about a trust is that it gives you maximum privacy, where a will is public record and open to all.

Trust language can be drafted to reduce or eliminate estate taxes, as well as to protect from divorce settlements and creditors. In addition, a trust can protect dependents with special needs. Ask your estate planning attorney about a special needs trust for your child with special needs—or about the other types of trusts that might benefit your circumstances.

An individual can use trusts in one of two ways. Some people will grant title assets to a trust while alive, and then the living trust terms will stipulate the distribution of trust assets at the grantor’s death. Other folks don’t have a standalone living trust; instead, they use a testamentary trust which is funded through a will.

Contact a qualified estate planning attorney to help you decide which way to go.

Reference: financialplanning.com (August 13, 2015)“Should Estate Plans Rely on Trusts?”

Three Estate Planning Fundamentals You Can Fix

The biggest problem that results from failing to address estate planning in a timely manner is simple:  it often leaves loved ones with a mess to clean up that can be expensive, time consuming and very public. The Street’s “Mistakes You Need to Stop Making,” takes readers to task for putting this necessary responsibility on the backburner. Three basic estate planning mistakes that are more common than you would think:

Mistake 1: Not Signing a Will

Even those who are proactive in their planning sometimes forget to dot the I’s and cross the T’s—some people, for example, write a will but never actually sign it! This becomes a priority only after a health crisis or another life change. That's risky! It’s really important to have a signed will in place before something urgent arises.

Mistake 2: Tax Faux-Pas

Federal estate tax laws exempt taxes on estates with assets under $5.43 million per person, but some people with assets less than the threshold think they're exempt from estate planning. Not so! There are a number of other benefits for estate planning. This includes avoiding financial disputes about the inheritance, protecting assets from creditors and lawsuits, and donating to charity. In addition, state estate tax is part of the process, too. Your state might have a much smaller estate tax exemption limit.

Mistake 3: Negligence/Being Out-of-Date

Failing to keep your estate plan up-to-date is another dangerous mistake. Make sure that you do a review with your estate planning attorney any time a major life event happens, for example, divorce, a death in the family or the birth of a grandchild.

Talk with a qualified estate planning attorney and avoid these estate planning mistakes.

Reference: The Street (August 14, 2015) “Mistakes You Need to Stop Making”

Why You Should Put an Estate Planning Attorney on Your Cancer Defense Team

Cancer is the second leading cause of death in the U.S. It is anticipated that half of all men and one-third of all women in the U.S. will develop cancer at some point in their lives, according to a recently published article in The Huffington Post, “When an Attorney Is the Best Medicine.” That’s the bad news. The good news is that the five-year survival rate for all diagnosed cancers has improved. Unfortunately, the costs of treating cancer have risen exponentially. Medical debt is a problem for many Americans, and it is only going to become a bigger problem.

The National Institute of Health believes that by 2020, direct medical costs alone will be at least $158 billion—an increase of 27% over 10 years. This means patients often face great difficulties in paying for housing and groceries. Cancer patients with major financial issues are also more likely to suffer from depression and anxiety.

However, attorneys who work with health care professionals can help with many of the non-medical issues that impede a person's cancer prognosis and life expectancy. Identifying healthcare coverage options, securing coverage, and assisting patients with providers disputes are some of the big problems with which attorneys can help. An attorney can also help patients with housing issues, dealing with Social Security and other benefits and end-of-life planning.

Legal assistance helps patients help themselves. Those who received legal services become better advocates on their own behalf. Healthcare systems see a benefit as well; with an attorney acting as part of the healthcare team, doctors are able to focus on the patient's health.

Fighting cancer alone can make anyone vulnerable. Fighting cancer and also dealing with a serious legal matter can have horrible effects on patients and their families. Work with an experienced elder law attorney and get help so you and your loved ones do not face a disease like cancer alone.

Reference: Huffington Post (August 14, 2015) “When an Attorney Is the Best Medicine”

Fundamentals of Preparing a Will

Fox Business reported on three important aspects of wills in a post “3 Things You Should Know Before Writing Your Will.”

1. A will doesn't actually cover all of your assets. If you own property in accounts that have beneficiary designations (IRAs, 401k’s, and life insurance policies), then the people you choose as beneficiaries will inherit those proceeds, regardless of what your will says. And if you own property in joint tenancy with rights of survivorship, your joint tenant will take full possession automatically at your death. Pay-on-death bank accounts likewise give the surviving account holder the rights to withdraw all of the money when you pass away. Also, property held in trust is handled outside of probate.

Make sure your beneficiary designations are consistent with your will. If you make changes to your will, you should review those beneficiary designations to see if similar changes are needed. If you fail to do this, your effort to update your estate planning could create major gaps that will wreck your plans for the distribution of assets after death.

2. Naming your will's executor takes some thought. The executor is the individual in charge of taking care of your affairs and ensuring that your will is executed as you stipulated. This is a big decision: the executor is responsible for several extremely important tasks. These include:

• Distributing assets as directed by the will.
• Paying bills and taxes on behalf of the estate.
• Appearing at legal proceedings for the estate.
• Maintaining property until the estate settles.

You need to choose the right person for this important job. Many people select their spouse, an adult child, or a trusted friend. But you can also name an attorney as executor. You also can name joint executors and alternates in case the executor you choose can’t serve or he passes away before you do.

Consider these thoughts when selecting an executor. It should be someone you trust to make the right decisions, and a person who is smart enough to ask for help from a qualified estate planning attorney when they need it. Naming several of your children as co-executors might be hazardous, as this could lead to arguments. Your executor doesn't need to be a financial guru, but should be a person you trust with good business and common sense.

3. Take extra care in writing your will if you have young children. In many instances, children can’t deal with the responsibility of inheriting property. Also, if your son or daughter inherits property outright when they're still a minor, the probate court will appoint an individual to be a property guardian if you don't. So it makes total sense to carefully consider whom you want managing your assets for your child after you pass. This is especially vital because a court-appointed guardian will hand over all the inherited property to your child on the day he or she turns 18.

Take some time and think about how you want to address these issues. Your estate planning attorney can help with planning.

Reference: Fox Business (August 9, 2015) “3 Things You Should Know Before Writing Your Will”