The Importance of Solo and Small Firm Attorney Disability and Estate Planning- part 2

At the Denver Tea Room

At the Denver Tea Room

This is part two of the previous post about some of the obstacles as well as rewards of solo and small firm lawyers getting their disability and death plans in place.  In the first part I mentioned I was posting this due to my participation in the American Bankruptcy Institute’s Rocky Mountain regional conference.  Next month I will be putting on a similar program for the Aurora Bar Association.

Let’s dive in with (a review of) Kipling’s serving men –

I keep six honest serving-men

 (They taught me all I knew);

Their names are What and Why and When

 And How and Where and Who.

 . . .

The Elephant’s Child, by Rudyard Kipling.

We’ll begin where we left off, with the fourth serving man. . . .

 Here’s the fourth man, HOW . . .

Well, you can always start with a simple plan, which involves another person (the sixth man is “who”).  It’s best to start with a person in mind to help you (known in the appendix as the “assisting attorney”) because it’s often easier to get going with this plan if there are two of you who are holding each others’ feet to the fire, so to speak.  If you can’t think of another attorney with whom you can get started, try a request on the BR listserv or ask on the SSF listserv.

Don’t let the fear of confidentiality and conflicts (as in the CRPC variety) stop you in your tracks.  Any arrangement to manage or take over the lawyer’s practice must include appropriate protections for client confidentiality. The assisting lawyer taking over must beware of conflicts and must safeguard confidential information. The assisting lawyer should be introduced to or familiar with office staff. Staff or family members of an affected lawyer need to know how to contact the assisting lawyer in the event of disability or death.  They need to know where any agreements, powers of attorney, or other planning documents are located. Family members and the PRs should be advised of the arrangements so they know of their existence and any important provisions. Instruction letters could prove invaluable and of course an office procedure manual would be ideal to help locate and decode the affected lawyer’s system.

A more advanced plan and even the super deluxe plan aren’t rocket science as such (unless you have an engineering background).  Lloyd Cohen’s ABA book Being Prepared is very useful in this regard AND it’s available from the CBA’s lending library.

 Enter Kipling’s fifth, WHERE.

This one is up to you! Meet somewhere with your law partner, a trusted colleague, a family member or office staff at a place and time where you can get started on the difficult conversation that leads to . . .  the documents.  The documents need to be kept in a safe place where your assisting attorney  can have access to the documents in the event they must be used or held by a third person like an escrow holder.  At a minimum you will need an easily understood and complete filing system with access by someone who has some familiarity with the system.

   And last but not least, there is WHO.

This can be a very challenging detail – on whom can you rely for this type of assistance?  Will it be asking too much of the person? These are not easy questions to answer, but many of us deal with these questions regularly in representing our clients.  The arrangement you make with the assisting attorney should establish the scope of the assisting attorney’s duty. Will the assisting attorney be the personal attorney for the deceased or incapacitated lawyer? This can be an important distinction. If the assisting attorney personally represents the deceased or incapacitated lawyer, in the event he or she discovered malpractice or ethical violations in any matters, the assisting attorney would not be able to inform the clients and also the assisting attorney could not represent the clients. If it is intended that the assisting attorney take over representation, then he or she would not be the personal counsel for the deceased or incapacitated attorney and must obtain each client’s consent to representation.

The compensation of the assisting attorney should be addressed, as should the matter of staff support to assist the assisting attorney in performing his or her duties and arrangements to pay for these services.  If you are looking for more inspiration about the intersection of (1) what to avoid by planning and (2) how a community of lawyers came together to help one of its own, read this 2013 article from the ABA Journal.

Okay, we’re finished with Kipling’s serving men, and I hope they have helped demonstrate how simple this process can be (note: I did not say it was easy).  Just in case you need a little extra ethics ammo to get you motivated, take a look at the American Bar Association Standing Committee on Ethics and Professional Responsibility Formal Opinion 92-369, December 7, 1992, Disposition of Deceased Sole Practitioners’ Client Files and Property, which provides:

To fulfill the obligation to protect clients’ files and property, a lawyer should prepare a future plan providing for the maintenance and protection of those client interests in the event of the lawyer’s death. Such a plan should, at a minimum, include the designation of another lawyer who would have the authority to review client files and make determinations as to which files need immediate attention, and who should notify the clients of their lawyer’s death.

Many state bars require such plans of solos (our neighbor Wyoming, for example).  Colorado does not – let’s not give OARC a reason to require this of us – plan now!  If you are looking for more ideas by way of checklists, LDPOAs, casualty letters, and other documents associated with this planning, and you are a solo attorney and have a question about my forms, get in touch!

©Barbara Cashman  2015   www.DenverElderLaw.org

The Importance of Solo and Small Firm Attorney Disability and Estate Planning- part 1

My Old Girl

My Old Girl

Well, it seems my Solo Attorney Estate Plan posts are few and far between!  Strange when I consider that I have usually presented on the topic at continuing legal education (CLE) programs at least a couple times a year.  I’m always updating my materials (and looking for more cartoons about death and dying) and am particularly grateful to my colleague Mark Masters, a community resource for trust and estate lawyers who is of counsel at Glatstein & O’Brien. Mark was kind enough in December to take a close look at my forms that I use in my CLE presentations to get the planning going.  Though I have shared these forms over the years with dozens of attorneys, I am always looking for comments and suggestions.    I will be presenting on Friday at the ABI Rocky Mountain Bankruptcy Conference, January 23, 2015 as a panel member of Consumer Workshop III: Practical and Ethical Issues in Succession Planning. 

The other panel members include Charles “Chip” Mortimer, Jr. from the Office of Attorney Regulation Counsel, Colorado Supreme Court, Mark Dennis, of Dennis & Co., P.C. and our moderator, Nancy Miller, of Nemirow Perez. 

As an estate and elder law attorney, I am familiar with detour, dissolution, disability and death.  I am one of a small number (as far as I can tell) of attorneys who has a plan of some sort in place.  Fact is, most people put off thinking about these things and making plans.  I think it proves that lawyers are people too.  What are the barriers to making a plan?  Well, there are many.  There is the first hurdle of the emotional issues we face in coming to terms with uncertain certainties (death) and certain uncertainties (some catastrophe or a disability of a physical or cognitive variety).  This freezes many of us right in our tracks.  It may be the biggest reason that most people die without any estate plan in place.  Perhaps you have heard the estate planners’ adage about the people most in need of estate planning (people with young children and small business owners) being the least likely to have it?  Many of us, especially the solo and small firm types, have kids or family members who depend on us and our law practice as a source of income.  We need to make our own plans.

I don’t like to scare people, and so that is one of the reasons I share my forms – it’s kind of a “hey kids, try this at home” approach. For this post I will begin with the end in mind – yes, the plan itself, and a few documents that are must haves.  Where to start? Well, I recommend Rudyard Kipling’s six honest serving men to help overcome that most potent physical and psychological force – inertia:

I keep six honest serving-men

 (They taught me all I knew);

Their names are What and Why and When

 And How and Where and Who.

 . . .

The Elephant’s Child, by Rudyard Kipling.

Let’s start at the beginning with WHAT. . . this is the most important part to begin with.  What do you want to happen in the event of your disability, incapacity or death?  You as the person making the plan will sometimes be referred to as the planning attorney or the affected lawyer.  I know, the second moniker doesn’t sound so nice.  The person you have selected to help you will be known as the assisting lawyer.  Here are a few questions to get the ball rolling.

  • What will happen if you become disabled? Begin with a conversation with another lawyer or perhaps a staff member about how to make arrangements for you, a/k/a your law firm, as an affected lawyer or law firm to continue, close, or transfer your practice on your behalf.
  • What can you put in place to cover your disability? Have appropriate powers of attorney in place so that your assisting lawyer(s) can step in if needed to run your practice. They will need to be able to sign checks, handle the COLTAF accounts, manage employees, and generally conduct your law practice business on your behalf.
  • What will happen to your law practice upon your death? Consider naming at least one personal representative in your will who is a lawyer to be charged with the responsibility of selling or closing the practice.
  • What can you do now that could help your assisting attorney? Maintain an easily understandable system of client records to help the assisting or successor lawyer to carry out his or her responsibilities.

Sure, there’s the detail of how your assisting attorney will get paid, but don’t let that detail hold you back!

 

The second serving man is WHY.

Think of this planning as putting in place a management plan.  Even if you don’t have a business plan, let alone a management plan for your current practice, it is imperative that you get one for these “if” and the “when” scenarios.  Think of the plan as putting together a management team.  They will manage according to the plan you have put in place.

Whether you have a plan [or not] should be a conscious choice.  I know this sounds familiar to all of you reading this because, well . . .  many of us do this planning for a living and some of us do litigation when there wasn’t a plan or a badly constructed plan.  So, at the risk of singling you out as your own cautionary tale, wouldn’t you rather make a conscious and deliberate decision?  It doesn’t have to be perfect and it can be changed and updated as needed. What it is that fits your goals, personality, your business plan and your longevity and estate planning goals? Most of us would rather be in charge of deciding this and not leaving it to be a burden on someone else.  Here are a few “why” things to consider – just in case you forgot that you have to think about the same things as your clients:

  • Longevity planning (for incapacity or disability to avoid guardianship, conservatorship or OARC appointment of inventory counsel)
  • Making a will or trust that addresses or has provision relating to your law practice
  • Tax issues
  • Providing for some financial management in the event the firm can go on without you
  • Caring for and protecting beneficiaries with a stream of income or other benefit they might be depending on
  • Considering carefully and choosing your key people: agents, assisting lawyers, personal representatives, trustees, etc.
  • Maintaining privacy and confidentiality during times of uncertainty or transition
  • Ensuring there is no breach of fiduciary duty owed to clients by the lawyer or law firm

 

Kipling’s third serving man is WHEN.

There is no time like the present!  Some would argue that there is no other time besides the present, that the rest of it is . . . theoretical.  So get busy and start now.

That’s all I can fit in this post for now. . . .  stay tuned for the continuation!

©Barbara Cashman  2015   www.DenverElderLaw.org

 

This Week: Small Business Week and Elder Law Month

An Irish Ruin

An Irish Ruin

This is an interesting combination topic – don’t you think?  Perhaps you might be thinking that I am taking this whole “theme” thing a bit too far.  Putting together the “Happy Small Business Week” (which I learned about from my Google page on Monday) and Elder Law Month. . . .  Isn’t this a bit of a stretch?!

Why no, not at all!  In fact many folks in the second half of life are shunning retirement in favor of . . . . “risky startups.”  Read the January 7, 2014 Bloomberg article about this here.  It’s no surprise to learn that job opportunities for folks over 55 are “limited” but it was surprising for me to learn that the number of people aged 55-64 has been increasing, with a full 23.4% of them starting their own businesses in 2012.  What is prompting people to do this?  Many have discovered that the retirement benefits that many of our parents enjoyed are simply not on the table anymore.  Couple that with a lifelong yearning to work for yourself, and there you have the boomer startup!  The Small Business Administration is well aware of this trend and has targeted free resources available for this cohort.

Last month I was pleased to present the CLE program at the monthly meeting of the Elder Law Section of the Colorado Bar Association.  My friend and colleague Rick Mishkin gave me a very kind introduction and revealed publicly my secret desire to be a talk show host . . . .!   He was generous enough to update the title of the solo/small firm disability and death planning presentation I have given a few times now to “The Death You Need to Plan for Should Be Your Own.”  As it was the elder law section, which is an interdisciplinary group, there were a few professional fiduciaries who attended the program and a couple of them (one of them a finance person and the other a professional guardian) noted that the materials I shared were helpful to them as sole proprietors who wanted to have some succession or disaster planning in place.  A bar staffer told me the materials would be available on the bar website. I am happy to share these resources with other solo professionals who are so inclined.

Among the small business startups by those underemployed boomers or boomers who just aren’t ready to be retired can be found more than a few businesses targeted at the elder care services field.  There are businesses that are founded on services that most family members that traditionally were largely provided by family members.  With our modern-American and far-flung families, many elders have come by necessity to rely on service providers for many services and support.  In fact, the Eldercare Locator, a public service of the U.S. Administration on Aging has a handy website that can help locate local providers of services including information on Alzheimer’s Disease, health insurance, transportation, housing options, legal assistance and long-term care.  Many of those service providers are baby boomers who found that the service their parent(s) needed was not really available, and so many unique forms of assistance for elders were born from this necessity.

The boomers have a vested interest in how these business developments they are involved in turn out.  They are the “silver tsunami,” which is necessitating a reexamination of resource allocation in services that will be made available to the biggest ever cohort of elders in our country (and many other nations worldwide) has seen.  There are many dimensions of what has been called “the 2030 problem” of meeting the challenges to public policy placed on caregivers and public finances; and to focus only on economic challenges (like issues around raising tax rates while tending to economic growth of service costs at the expense of other forms of social investment along with tending to the well-being of future generations of workers) may be misleading in its simplicity (or not).  This topic is not at all an easy one to identify and discuss, let alone come up with what might be “solutions.”

Another excellent online resource is the American Society on Aging.  On their site is a tab called “business and aging.”  Turns out there are a few discussions of the topic outlined above – how long should a boomer work; will there be enough caregivers to go around when we need them; and what about long-term care insurance issues . . . ?  My favorite item on this site is a video by Katy Fike, Ph.D., a member of the ASA’s Board of Directors entitled “Ten Innovations that Could Change the Way We Age.”  Spoiler alert: one of them is the Google self-driving car!  I think we Boomers have a lot to look forward to in our old age.

©Barbara Cashman  2014   www.DenverElderLaw.org

Solo Attorney Estate and Succession Planning: Overcoming Inertia

 

The Solo Attorney’s Plan for Succession, Disability and Death: part 1 of a series.

Overcoming inertia can be difficult!  [In case you’re wondering, the picture at left is of Newton’s laws, I’m thinking particularly about Newton’s First Law about overcoming inertia.]  Let’s face it, procrastinating has a bad rap – but it isn’t always a bad thing.   But if you are a solo attorney and you don’t have any arrangements in place for someone to be able to assist in the event of your sudden incapacity or disability or death, you might want to consider thinking about what might happen to your spouse or loved ones if something happens to you.

On February 11, 2013, I presented a continuing legal education (CLE) program on the topic “Death of a Solo, Death of A Practice: Planning for the Inevitable. “  I’m pleased to say it was well-attended and I got many positive responses from colleagues.  Apparently this topic is on a fair number of my colleague’s minds.  There are several layers of challenges for a solo in figuring out a plan.  In this series of blog posts, I will talk about some of those challenges and some ideas about how to work through them.

I think the biggest obstacle for many people is the very first one, and I used a slide entitled “What Me Plan?” to pay homage to Alfred E. Neuman  (of Mad Magazine fame, in case you’re too young or that part of your memory is compromised) and keep this whole question on the lighter side.  The idea for the program was of course not original.  Back in 2010, I worked on and presented at a daylong CLE program (August 2012, “Planning Ahead”) for this same topic for solo and small firm types.  Last summer at the Elder Law Retreat in Vail, I presented a couple  of the forms I used as materials for the Feb. 11 program as a “special bonus” to my ethics presentation.  What prompted me to propose this topic to the lunchtime CLE series was an article I read in the January ABA Journal  about the terminal illness and death of a sole practitioner and the impact it had on a friend’s life and law practice.  The story is essentially about community, but is also a cautionary tale about being realistic about our own mortality and making a plan for uncertain certainties (when we will die)  and certain uncertainties (whether we will be incapacitated or unable to practice law for a short or long term period).  The vast majority of colleagues I speak to (including those practicing trusts & estates and elder law) do not have any documentation in place.  Most of us have a vague sense that having a plan would be a good idea . . . .  but how to get started and how to go about it?

I think this procrastination proves that lawyers are people first and lawyers second – most people don’t have wills and durable powers of attorney because they procrastinate and for a few other reasons, but that’s another topic.  I am concerned in this post with getting over the initial hump, that inertia of the status quo of not having anything in place.  Death denial plays out in many powerfully subtle ways, and procrastinating facilitates its continuation.  These posts will be about getting past the first obstacle and allowing ourselves the space to consider our own vulnerability and mortality and doing this in the context of what we value in our lives, what is important to us and who we want to protect.  Considering what is at stake is one way of looking at it, but for every individual there is a different perspective.  The tricky thing about this kind of planning is – we never really know whether it is necessary . . .  until it is too late!

This gets back to the whole idea behind estate planning as a positive and meaning-making human endeavor.  I’ve addressed some of the therapeutic aspects of estate planning in a previous post here, but I think some of the points about fear of death are worth repeating – these are some elements of people’s fear of death that psychologists have described:

  1. They can no longer have any life experiences;
  2. They may be uncertain as to what will happen to them if there is a life after death;
  3. They may be afraid of what will happen to their bodies after death;
  4. They realize they will no longer be able to care for their dependents;
  5. They realize that their death will cause grief to their relatives and friends;
  6. They realize that all their plans and projects will come to an end; and
  7. They may be afraid that the process of dying will be painful.

When we think about our own mortality we can see beyond the basic fear of the unknown and think about how our death is connected to our life.  I think this is where a fear of death is really more about a fear of life, of life’s inherent uncertainty and fragility.  What if we could start practicing a little bit every day, by recognizing the uncertainty of the future – any knowable future, by looking at what is and being grateful for it?  Now I’m thinking about another blog post or two where I’ve cited Dr. Ira Byock’s four things to say to others while we are alive, but particularly useful when we know our time is limited:

please forgive me

I forgive you

thank you

I love you

If we could start saying these things while we are alive, maybe it would be easier to consider our own mortality and examine and embrace the meaning of our lives.  This is where the community element comes in.  The other part of my message for the recent CLE was that solos are not alone, we are part of a community.  We can help each other talk about what our concerns are about planning, addressing our own individual needs and concerns, along with finding a colleague we can trust who can assist us in the execution of plans in the event of our disability or death.  As members of the CBA solo and small firm community, we can share our ideas, experience and strength in ways that help us as individuals (and our families and loved one) and foster our community.  In future posts I will be sharing some more ideas about getting started and making progress toward a plan, as well as some of the documents that solo attorneys can use for their document “infrastructure.”

 

©Barbara Cashman     www.DenverElderLaw.org