ETIQUETTE WHILE TRAVELING TO ASIA

Traveling is a great adventure to experience different countries and learn about their cultures. One of the biggest mistakes travelers can make is to not be prepared before visiting a new country. There are cultural differences and something in one country could be viewed as insulting in another country. Visiting Asia is an unforgettable experience but it holds many cultural differences than what we are used to in the United States. Before heading on your vacation research the dos and don’ts of Asia.

Greetings in India

Unlike the United States, handshaking is not a normal habit in India. Natives to India greet each other by pressing their palms together and slightly bowing their heads. During the bow, you say the word “Namaste.” This is how people show respect for each other and is a common way for people to greet each other.

Eating in China

Finishing your plate in the United States and other parts of Asia can show the host that you enjoyed their food and were satisfied with your meal. In China, you should leave food leftover on your plate. If you finish everything on your plate, you are signaling to your host that you could still be hungry and are not satisfied.

Gift Giving

In Asia, when you are invited into someone’s home, it is typical to bring along a gift for the host. Bringing a gift from your own country are appreciated much more than if you buy something down the street from the home you are visiting. You may want to consider packing a couple of gifts before traveling in case you are invited to someone’s home.

Personal Space

Though we do understand getting too close to each other can make another person uncomfortable, other cultures are more strict about the distance between people. Men don’t touch women in public as a sign of respect in India. Many cultures believe that being an arm’s length away from others is the respectable distance.

Travelers get a bad reputation for being rude while visiting other countries due to them not understanding the cultural difference. Though it may not be intentional, you could be insulting a person’s culture if you do not travel prepared.

The Living Trust Myth

I dedicate this front page article to addressing myths and “shiny objects” that don’t work. This month, I’d like to address one of the sacrosanct beliefs held by all respectable and educated persons — namely, that trusts avoid probate.

HERE’S THE MYTH: The marketing says that you need a “Living Trust.” Otherwise, you’re loved ones will need to spend thousands of dollars struggling through the horribly long probate process. Not only that, but all your family information becomes public. How could you put your distraught loved ones through that at a time that they’re grieving your loss???

THE REALITY: First, going through the probate process isn’t so bad. In fact, I probated both of my parents’ estates. Assuming your family isn’t fighting, the cost is around $5,000 if you use a lawyer. However, simple probates can be done by yourself using forms available online. There is some time invested up front. And the whole process takes slightly over six months. But most of that time is simply waiting for the four-month creditor waiting period to lapse. A huge advantage is that at the end of the process, you know with absolute certainty that there aren’t going to be any creditors coming out of the woodwork.

Second, having a trust doesn’t guarantee that you avoid probate. However, having a well-drafted trust has a good chance of avoiding probate. Around the retirement communities here in Arizona, you’ll see billboards that advertise “Living Trusts” for only $297. I can see this if you have limited wealth that isn’t going to significantly impact your heirs. Also, it requires that your heirs aren’t going to take each other to court fighting over who gets what. And it requires that you properly transfer your assets to the trust.

Third, and I think most importantly, applies if you have any significant wealth accumulated (for instance, more than $100,000 per heir). That’s the point at which your heirs’ inheritance has a hope of doing more than just paying off their credit card debts and car loans. The vast majority of people inheriting wealth can’t hold onto it for more than a few years. One study says that happens 70% of the time, though I suspect that number is low.

There are other options rather than simply distributing everything to your next of kin when you die. You can distribute it in stages — for example, 25% immediately, 25% in 5 years, and 50% when they reach age 65. If you have at least $ 500,000 (including life insurance proceeds), you could have a corporate trustee hold it in trust and distribute it only as needed.

Keep in mind that you get what you reward. It’s very common to say that beneficiaries are entitled to receive distributions for their “health, education, maintenance and support.” For larger estates, this could mean that your heirs get monthly allowances so they no longer need to work. Did you really work so hard during your lifetime so your kids and grandkids can sit around and live off their inheritance?

Finally, merely having a living trust does not prevent your heirs from fighting with each other or with the trustee. And these fights often end up in probate court (the division of the judicial system that handles disagreements involving trusts). There are ways of preventing this from happening, including (a) having a Trust Protector with authority to amend the trust or resolve questions of interpretation, (b) requiring that all disagreements be resolved using mediation or arbitration, (c) including a No Contest Clause that states that anyone who contests the trust will lose his/her inheritance.

The information in this article is not to be construed as legal advice, and this newsletter does not create an attorney-client relationship. Your particular situation is unique, and you need to consult with an attorney (such as me) to discuss your particular needs.

Paul Deloughery on 8 Reasons to Review Your Estate Plan

If you have a Will and/or Trust, you’re ahead of 60% of Americans. But getting an estate plan in place is kind of like changing the oil in your car. You can’t just do it once and forget about it. Here are 8 reasons to review your estate plan:

You move to another state (or buy a major asset in another state). Estate planning isn’t national. It depends on state-specific laws. A document drafted in Minnesota (for instance) won’t be interpreted the same in Arizona. Also, if you buy a vacation home or business in another state, that could complicate things.

The objects of your affection change. When you last updated your documents, you named your kids as beneficiaries. Now you’re remarried and you want to include stepchildren. Such details need to be documented in order to happen.

Your assets or liabilities change. If you receive an inheritance, it could change how that wealth should be passed to the next generation. The same goes for having increased liabilities. You could inadvertently treat beneficiaries unequally based on how things are owned, who is in charge, and who gets what.

The beneficiary designations on your retirement plan or IRA are obsolete. Retirement plans go to whoever is named as the beneficiary. Merely updating a Will or Trust doesn’t change the designated beneficiaries on your retirement plans. Also, retirement plans and IRAs get paid out immediately. Is that appropriate for who will be receiving them?

Your Personal Representative or Trustee designations are no longer appropriate. Are you sure you can trust the person you named originally? Does that person have a good relationship with your other loved ones? Perhaps it’s time to modify this.

You have a blended family. Blended families always complicate the estate planning process. What protections do you have in place to ensure that your own children or intended heirs won’t be disinherited?

You have a business. Have you thought through the nitty gritty details of who will operate this business while someone is waiting to get appointed as Personal Representative or to get control as trustee? Is your business actually owned by your trust to ensure a smooth transition? Does your trust document authorize the trustee to take necessary actions to manage your business?

It’s been five years since you last updated your estate documents. Things change quickly in life. A rule of thumb is to review your estate plan about every five years with your attorney. You can expect to spend almost as much as you did originally on your estate plan if you want your attorney to carefully review your situation. This is a necessary step to ensure that your wishes get carried out.

What to Do in California

Visitors to California are often understandably overwhelmed by the plethora of exciting, “can’t-miss” opportunities that await travelers. But with a little guidance, it’s actually not difficult to narrow them down. Here are 5 of the best attractions that the Golden State has to offer.

Wine Tasting in the Napa Valley

This activity is such an iconic West Coast staple, numerous films have been made around it (see Sideways and Bottle Shock for two prime examples). Don’t forget to assign a designated driver — or better yet, sign up for an expert-guided tour that will show you the cream of the crop. Not a wine drinker? Sign up for a hot-air balloon ride instead — the views of the valley are unforgettable.

Yosemite National Park

While Yosemite was America’s second-ever national park, the stunning scenery featured within is second to none. From El Capitan (the largest granite monolith in the world) to Yosemite Falls, there’s something to delight the eye around every turn. See the par’s website for hours and information.

Golden Gate Bridge

Speaking of icons, there are few that beckon quite like this San Francisco landmark, which connects San Francisco Bay and the Pacific Ocean. Not only does it represent a landmark feat of engineering for its day, it’s likely the most photogenic bridge ever constructed.

Redwood National Park

Where else can you visit a tree with a trunk wide enough to drive a car through, and one that’s literally older than the republic in which it stands? Home to the tallest trees on the planet, this park (see website for further details) represents a bucket-list experience for the ages.

Big Sur

Not unlike Hawaii’s famed Road to Hana, this is a driving experience that all visitors to the state should take to see what all the fuss is about. Featuring more than 90 miles of rugged, fog-shrouded coastline, the Big Sur trip contains surprises and photo opportunities around every turn. Plan on taking a day or even two for the trip — there are so many quaint hamlets tucked along the way, it will be difficult enough to pick just one to stop in for the night.

Originally published at pauldeloughery.net on March 29, 2018.

Carry-On Challenge: 6 Packing Tips

Traveling with just a carry-on can be a struggle for many, but traveling with only one bag (and maybe a personal item) will offer you more freedom and lower costs! If you opt for bringing just a carry-on, cramming a lot of stuff in one small suitcase is tricky. However, if you follow my six packing tips, you will be able to travel carry-on only!

Roll Clothing

Rolling clothing is a common trick that allows you to pack more than you could if you folded your clothing. To roll your clothing, lay the clothes out flat and begin rolling into cylindrical shape starting at the top. Once your article of clothing is rolled, pack it tightly in your carry-on to prevent it from unraveling during travel. If you are desperate for space, I recommend using the military-style roll for t-shirts.

Fold Instead

If you decided rolling is not the best packing style for your carry-on, then try the filling method. After folding all of your clothing, imagine them as a file in a filing cabinet. Then stick each article of clothing (file) vertically in your carry-on (filing cabinet) from front to back. This is very helpful for when you arrive to your destination because you will be able to see each clothing piece easily.

Invest in Compression

Depending on where you are traveling, you may need to pack heavier warm clothes. While I recommend wearing your heavy jacket, sometimes you need to pack another. Using a larger zipper or compression bag, fold and roll your larger items into a space-saver bag. Then simply roll the bag to get all the air out.

Pack Your Shoes

Another packing tip that I use frequently is using my shoes to hold smaller items. I roll socks and underwear into my shoes because it’s a great use of space. After my shoes are stuffed, I wrap the shoes into a small plastic bag and place them at the bottom of my carry-on.

Purchase Packing Cubes

Packing cubes are being a favorite travel item for those wanted to travel carry-on only. Packing cubes are great because it can you be stay organized during your travels and helps when it’s time to pack to come home. This travel accessory can help with both folded or rolled clothes. You can even invest in enough cubes to have one per day.

Use Resealable Bags

Similar to packing cubes, resealable bags or small plastic food bags can help you stay organized. I recommend separating shower products, cosmetics, and other accessories into separate bags. Another great benefit of using resealable bags is that you can tuck the bags into the side corners or outside pockets of your carry-on.

Packing just a carry-on can be difficult, but these packing tips can help you save money and hassle. Packing requires practicality because you must carefully decide what to bring but also how to strategically pack it.

Originally published at pauldeloughery.net on March 27, 2018.

Who Can You Trust with Your Trust?

The issue of trust is a biggie for me. I suspect it is for most people. That’s especially the case when it comes to your money, and who will be in charge if you get dementia or if you pass away.

(Don’t know what a “trust” is? You can read a short description here.)

In a typical case, you are the trustee of your own trust. As trustee, you oversee the money and assets in the trust. This is called a “revocable trust”, or a “living trust”. However, if you get dementia or get a head injury (for example) then you probably can no longer serve as trustee. At that point, someone else needs to come on board as the trustee. The question is … who should that person be.

As a probate attorney, I’ve seen lots of situations in which parents named an adult child as trustee, but that person turned out not to be responsible. Or perhaps that child was too busy with his/her career at the time to be able to serve. Then the next child in line became trustee. However, there was a reason that the parents named one child first and the other child second. The second child turned wasn’t good with money and business responsibilities (which are required for a good trustee).

So in the above example, you have an older person with dementia, and a trustee who doesn’t know what he or she is doing. Now what?

Well … a well-drafted trust document will have checks and balances, and ways of solving dilemmas like this. One increasingly common approach is to name a “Trust Protector” who can remove a trustee and appoint a new trustee. When I draft trust documents, I suggest to my clients to name me (or the then-managing attorney of my law firm) as the Trust Protector. Why? Because I’m familiar with my clients’ wishes and can ensure that those are carried out. But that can be a tough pill for some clients to swallow. After all, they may have just met me. And now I’m naming myself as having the ability to remove their beloved children as trustees and appoint a stranger as a trustee.

I’ve only just touched on the subject of who should be in charge of your money when you die or become incapacitated. Other issues include, who should serve as your agents under your financial power of attorney and health care power of attorney. And should you have joint owners on bank accounts. (And so on …)

Estate planning is complicated. And there are lots of ways that people can mess things up by trying to do it themselves. Generally, it’s a good reason for people to have a close professional relationship with their estate planning attorney. That way, issues like this can be talked out and solved. Just like they should probably work closely with an accountant and financial advisor. My suggestion is for people to meet with their estate planning attorney, accountant and financial advisor at least once per year. The meeting with the estate attorney may only last 30 minutes. But it’s a good way of confirming that there are no changes in the law, and that the documents are still valid. If you don’t want to meet with your estate attorney because you don’t like him or her, then that’s probably a good indication that you should look for a replacement.
I hope this short discussion has been helpful. If you have any questions, you can drop me a line at paul@magellanlawfirm.com or call me at 602–443–4888.

Paul Deloughery is an estate and probate litigation, and law insurance dispute consultant in Scottsdale, Arizona. Visit his website to read more of his blogs or follow him on Twitter!

Originally published at pauldeloughery.com on March 14, 2018.

Just Because I Think It’s a Good Idea Doesn’t Make It So

After five years, I’ve finally come to a realization. I need to change the name of my law firm. In 2013 when I started practicing law again, I came up with the name “Magellan Law.” I liked that name for two reasons. First, I like the ocean and water and ships. Second, I thought a ship made a good analogy for a family’s wealth and what happens when a captain dies, or pirates try to take control.

The problem? My office is in Scottsdale, Arizona, far away from any significant body of water. And I always had to explain the analogy. I’m still not sure how many people understood what I was trying to do.

The solution? I’m starting a new law firm to be called “Family Wealth Lawyers, PLC.” That’s more obvious. Rather than trying to explain why some Portuguese guy who tried to sale around the world has any relevance to my legal clients, now they can look at the name. We’re going to be helping families with their wealth. We’ll be creating legal documents to help protect family wealth. And when family wealth is in jeopardy, we’ll help resolve the problem.

It’s going to take some work. I need a completely new website, for starters. But this will give me the chance to really start focusing on what I want, which is to help families preserve their wealth for multiple generations. This has always been a passion of mine, and the last thing I want is to get tripped up on my business name.

I just did a little research and discovered that I’m not the first person to make a mistake in naming my business. Jeff Bezos didn’t name his business Amazon at first. Rather, he first named his business Cadabra. At first blush, it’s not overtly that bad. But Cadabra isn’t a great name either. Jeff Bezos meant it to be a shortening of abracadabra but realized, not only that people had a tough time spelling it, they didn’t really get that it was part of abracadabra.

(By the way, you can read about even worse business names here.)

This just made me think of something else. We Americans are terrified of making mistakes. This originates as children. In a typical school (elementary school through university), we’re graded based on our correct answers. But in actuality, we learn from making mistakes. I had a couple of enlightened teachers in high school who would give tests and then have us pass our tests to another classmate. We would then grade that other person’s test. I remember learning the subject matter better that way.

In any event, I owned my mistake (naming my law firm based on my fascination with boats rather than basic marketing principles) and I’m fixing it. Have you made any mistakes that you’re ignoring? I’d love to hear your personal story.

Paul Deloughery is an estate and probate litigation, and law insurance dispute consultant in Scottsdale, Arizona. Visit his website to read more of his blogs or follow him on Twitter!

Originally published at pauldeloughery.com on March 19, 2018.

Reconsidering What’s Important

I’m 50 years old, but I think I’m turning into a millennial. Keep reading and you’ll see what I mean. My family is in the process of downsizing from a house to an apartment that’s half the size. (This is an update from a previous blog in which I said we were going to move to a smaller house.) The reason is to cut our monthly expenses in nearly in half.

In the process, I’ve been aggressively donating and selling things that previously I was holding onto. I’ve tried to include my 13- and 15-year-olds in process. My thought was that they would tell me what items they wanted to keep and what to throw. To my surprise, though, they expressed an interest in my story about various things, but then found a way to politely walk away without committing to keeping anything.

So you have a flavor of what I’m talking about, here are some of the things that I thought I was keeping for posterity that my kids don’t actually care about:

Multiple photo albums of older or dead relatives. (I had thought these were important for genealogy. But it turns out there isn’t much family joy involved in sitting around a table listening to me show old pictures and tell stories about relatives that my kids have never met.)
Knick knacks of my mom’s. (I had thought for sure that my kids would want these. After all, they knew my mom when they were younger and before she died. These were porcelain figures from Northern Germany where my family is from. Again, the kids heard the story, but never took me up on the offer to take these items.)
A 1960’s cuckoo clock from Germany. My step-father had brought it back after being based there, and gave it to his parents. So, it has multiple deceased people’s stories involved (which I thought was relevant). My wife and kids gave me a blank stare when I said I thought we should keep it.
File cabinets full of music manuscripts from when I was studying music performance at Indiana University-Bloomington and the University of Iowa 25 years ago. (I’ve hardly used any of this, but kept it just “in case.” After all, the replacement cost of this written music would be in the thousands of dollars.)

I could go on and on. But this gives you an idea. In all, I’ve donated or sold what seems like half a house full of items in the last 30 days.

I was holding onto these things because of fear.

As an estate planning and probate attorney, I’ve found this process interesting. I was holding onto all these things because of fear. That’s the same reason that hoarders hoard. I never considered myself a hoarder. After all, I didn’t have piles of old newspapers, so I had to have pathways to get from one room to another. But my refusal to let things go was based in fear nonetheless.

I was afraid of the following:

That my kids would forget about their past. (That’s why I thought I needed to keep multiple boxes of photo albums.)
That my memory would not be carried on. (And therefore, I should keep lots of things showing what I did in my childhood, etc.)
About losing money. (So rather than sell bronze sculptures for a loss, I should keep them indefinitely.)

In short, I had what philosophers call a “Fear of Annihilation.” The fear of no longer existing. I know intellectually that this is silly. I’m going to die one day. And in all likelihood, no one will remember me in 50 or 100 years.

Millennials are different from my generation (Generation X) and the Baby Boomers. They don’t care about things (unless it’s equipment for a video game). I’m learning to appreciate their simpler approach to life.

So, rather than force possessions on my offspring, I’m choosing to leave them good values and memories. They are much easier to haul around than boxes.

Do you have any experiences of inheriting “stuff” from a loved one? Or perhaps simplifying your life? Please share.

Paul Deloughery is an estate and probate litigation, and law insurance dispute consultant in Scottsdale, Arizona. Visit his website to read more of his blogs or follow him on Twitter!

Originally published at pauldeloughery.com on March 22, 2018.

How I Made $48,000 By Making Three Tough Decisions

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Mark Twain

I’m a 50-year old lawyer living in Scottsdale, Arizona. I’m married (second marriage) and I have two teenage children. My law firm consists of me and a paralegal. Here’s what the common knowledge tells me:

I should own a home because it’s a good long-term investment.
I should have an impressive office to attract clients.
I should drive a fancy car to impress clients and people who might refer clients to me.

The reality, however, is that when you add up property taxes, water, electricity, landscaping service, and maintenance, it costs me $3,000 per month just to keep my nice Scottsdale home.

Furthermore, my office rent continues to go up. Plus, I’m not in the optimum location. Plus, I don’t have flexibility in case I want to downsize (like I do now with only me and one employee) or grow (by adding more lawyers in the future).

Also, my car never actually helped me get a new client. I think it helped me psychologically feel “successful,” and from that standpoint it may have helped. But no one ever said they would hire me because I had a fancy car.

Where does this all lead? I’m making some big changes in the coming months. I’m selling my house and moving to a smaller house (with fewer plants to water). I’m also leaving my current office and going into a nice executive suite — which will also save approximately $2,000 per month. And I got rid of my Cadillac XT5 (crossover) for a Jeep. The change in cars is saving me approximately 50%.

All told, I’ll have $4,000 more in my pocket each month. That’s a $48,000/year raise just by simplifying my life.

Has anyone else ever thought about making drastic changes like I’m talking about? Let me know. I’d love to hear.

Paul Deloughery is an estate and probate litigation, and law insurance dispute consultant in Scottsdale, Arizona. Visit his website to read more of his blogs or follow him on Twitter!

Originally published at pauldeloughery.com on February 27, 2018.

I Inherited a House

“I inherited a house, but my brother or sister won’t move out!”

Did your mom or dad die, and then your brother or sister moved into their house and won’t move out?
Did your mom or dad record a “Beneficiary Deed” stating that when they die, you and your siblings are to receive the house?
Did you inherit a house together with your siblings, and now you want to sell it? (But they don’t want to sell it.)

If the answer to any of these questions is “Yes,” then you need to talk to an attorney familiar with probate and real estate law. Feel free to contact me if the house is in Arizona. I’ve been handling cases like this since 2001.

It’s possible that your parent’s estate needs to be probated. (That would be the case if the house is still in your mom or dad’s name.)

The situation I often run across is when a family owns a house together. What we usually see is one family member takes control of the house, and let’s people live in it rent free. You want to be able to sell the house, but you would need to get your siblings to cooperate. (And they won’t cooperate because they’re getting a sweet deal by living in the house rent-free.)

The solution is to ask the Court to partition the property by sale. “Partition by sale” is a technical way of saying that the court will order the property to be vacated and sold. But be sure to hire a lawyer familiar with these types of cases. There are lots of little tricks that inexperienced lawyers won’t know. For example, you can get a court order saying that the property gets sold, but your lawyers needs to think of other details such as:

Who will sell the property?
Do the people currently living in the property need to leave?
Who gets the contents of the house?

We will get paid out of the sale of the house. Even if you don’t have money to pay a lawyer right now, there’s still a solution. Some lawyers (like me) are familiar enough with these cases that we will take your case and get paid when the house sells.

Your own situation is unique, and this article was not intended as specific legal advice. In order for me to help, you will need to contact me. We will sign a written fee agreement.

Paul Deloughery is an estate and probate litigation, and law insurance dispute consultant in Scottsdale, Arizona. Visit his website to read more of his blogs or follow him on Twitter!

Originally published at pauldeloughery.com on February 27, 2018.