power of attorney, guardianship

Power of Attorney vs. Guardianship: What’s the Difference?

 

Transcript:

Hello. My name is Jonathan Barlow. I’m an attorney here at Clear Counsel Law Group. A large part of my practice is in estate planning and guardianship.

In doing estate planning we often do what’s called a power of attorney for people and sometimes we get to the point where we have to file for a guardianship for people.

We’re going to talk about what those two things mean, especially for elderly people in southern Nevada.

 

First, I Will Define the Term “Capacity”

An important concept though, before we discuss those two things, is capacity. That’s going to come up over and over again in the discussion of power of attorney and guardianship. What is capacity?

Capacity simply means for you, as a person, your ability to mentally appreciate and understand the consequences of your decisions.

Decisions, whether they’re financial decisions, whether they’re health care decisions, have risks and rewards and consequences.

Your mental ability to appreciate the consequences of those decisions and act rationally in relations to those risks and consequences is essentially capacity.

As we all know, there are medical conditions and other reasons that people begin to lose capacity over time and sometimes it happens very quickly through accidents and other things that may happen, such as traumatic brain injuries, where that person loses capacity.

What that means is they are no longer mentally able to appreciate those risks and rewards and consequences of their decisions and thus it raises concern about the person’s well being, about their safety, about them being subject to potential exploitation by other people or undue influence from other people.

There’s processes put in place to protect a person in the event of incapacity.

That’s a brief nutshell of what capacity means.

 

Next, I Will Explain Power of Attorney

Let’s talk for a minute about what is a power of attorney and how it can help an elderly person.

A power of attorney is essentially kind of like a contract where you’re going to sign a document that is going to grant rights and authorities and powers to a person, who is called an agent under the power of attorney, to make decisions for you or to exercise rights and authorities that only you can exercise.

Let me give you some examples of what the person can do for you under the power of attorney.

 

Medical Power of Attorney vs. General Power of Attorney

Let’s assume you’ve named your son Frank to be your power of attorney.

There’s two types of power of attorney, excuse me, sorry for this side track, but there’s a medical power of attorney and there’s general power of attorney. There’s generally two different documents. Same concepts. We’re naming Frank to make decisions.

Under the medical power of attorney, that’s fairly straight forward. It allows Frank to make medical decisions for you in your place, again, only if you are not able to make those medical decisions for yourself.

For instance, he’d be able to determine what medications you would receive, what doctors you were treated by, what hospitals you might be admitted to, what rehab facilities you went to after being treated in a hospital, where you’re going to live after being treated in a hospital or rehab facility.

Those are medical decisions related to who you are as a person and your well being as a person.

Under a general power of attorney an agent can make decisions, or has authority over, such as your bank account.

They can access your bank account and use it. They could sell your house for you. They could prepare and file your tax returns for you.

They’d have authority over your insurance policy such as homeowners insurance, car insurance, health insurance.

Essentially, anything you can do in you general the agent would have the ability to make those decisions and has the authority to do that under the power of attorney.

 

power of attorney, guardianship

 

Now That You Understand Power of Attorney, I Will Explain “Springing” Power of Attorney

There’s an important concept in power of attorney that you need to understand and it’s a protection for most people and I often recommend it for almost all of my estate planning clients.

That’s called the spring power of attorney or springing rights under power of attorney.

Let’s think in your mind about that point in the future at which point you have lost capacity. What we talked about again, you are incapacitated.

Think about that point in the future.

If you have designated your power of attorney to be a springing power of attorney, Frank, your son who you named to be your agent, though you’ve named him as your agent in the power of attorney, he has no rights, he has no power or authority, until you become incapacitate and then his rights spring into effect, in essence.

How does Frank accomplish that?

How do his right spring into effect?

Frank has to go to a doctor, to a physician, and obtain an opinion from the physician that says, “My mom or my dad has lost capacity. That they are incapacitated.”

Once he gets a doctor’s opinion, his power of authority under the power of attorney spring into effect.

It’s a protection for you. If you want to put that power of attorney in place to protect that time when you’re incapacitated, you can do that but you want to reserve to yourself and only yourself.

Even though you love and trust Frank, while I have my capacity I’m the only that is going to make these decisions. When I become incapacitated, his authority spring into effect.

It’s a great protection and something that most people should think about and consider rather than the opposite which is if it is not springing, Frank can use the power of attorney tomorrow while you have your capacity to run your life for you.

Some people want that because they want the assistance, most people say, “I love Frank, I trust Frank, but let’s wait until I’m incapacitated.”

Power of attorney is very good for elderly people. It’s relatively inexpensive to have a power of attorney.

 

Let Us Now Contrast Power of Attorney and Guardianship

It avoids the need for a court guardianship process when that incapacity arises and it allows the person to act pretty quickly without needing to wait for court authority. Which transitions us now to court guardianship process.

Many people don’t get a power of attorney while they have capacity and they come to the point of incapacity and suddenly, Frank or other families, become concerned that you are not able to make your decisions or that you’re making unsafe decisions that are putting you at risk.

They don’t have a power of attorney document they can rely on.

The only way that they can have those same rights and same authorities to take care of you is to file papers in the guardianship court asking that Frank, or whoever, be named as the guardian for you.

Assuming that you are incapacitated and other legal standards apply that show that the guardianship is appropriate, once the court appoints Frank as the guardian, Frank has essentially the same rights as he would have under power of attorney.

Same rights to make medical decisions for you, to decide what health care you’ll receive, to manage your money and finances for you, your property, to take care of all those general matters. Same rights happen under the guardianship.

However, he’s stuck in this court process that requires annual reports, it requires annual filings with the court, annual accountings, and so it can be a little bit burdensome and it can be costly and time consuming to go through the guardianship process.

Nevertheless, they have the same rights under power of attorney and guardianship, both meant to take care of you while you’re incapacitated.

 

How To Revoke Power of Attorney

Last thing we want to talk about, if you’re still with us here at this point in the video1)Of course you are!, is what do you do if you are concerned about the agent under your power of attorney or you’re concerned that you’re stuck in a guardianship with a guardian named for you and in both situations you feel like you’ve lost control of your life.

Where Frank is running your life for you and you’re not happy with what he’s doing for you, both under the power of attorney and guardianship.

A power of attorney, if you still have capacity, you can always revoke your power of attorney.

Tear it up, get rid of it, notify other people who might be aware of it that you have revoked Frank’s rights under the power of attorney.

That’s fairly straightforward and easy.

 

It Is Difficult to Terminate a Guardianship

Now, if Frank has gone ahead and got that doctor’s opinion that says you are incapacitated or if you’re stuck in guardianship, in both situation you’re unfortunately you’re going to be stuck in some court process to prove your capacity.

You’re going to have to try to prove that you do have the ability to make your own decisions, that you have the mental ability to understand the effect of those decisions. If you can do that and prove your capacity, then you can revoke the power of attorney and get rid of Frank or you can get out of the guardianship.

The guardianship would be cancelled, it’d be terminated, and you’d have your right back to take care of your person, your own finances, at that point.

Both situations are not desirable because, again, you’re stuck in a court process. It’s uncertain.

It’s difficult to get a doctor to give an opinion that you have capacity when another doctor has already determined that you’re incapacitated. Especially if there’s diagnosis of Alzheimer’s or dementia or something like that, it becomes very difficult.

Another protection I want to point out as we finish here, is that third parties, other people, Frank’s siblings, your other children, other family or friends, can watch Frank’s actions whether under power of attorney or under guardianship and they can come into those processes and file things or try to protect you.

There is a court process allowed to challenge the agent’s actions under a power of attorney.

That allows a third party that’s interested in your welfare and interested in your well being to bring the agent into court and ask the court to review his actions to determine whether they’re appropriate under the power of attorney.

If they’re not appropriate his right would be cancelled under power of attorney and may be required to repay or things that he’s done and correct it. Same thing in a guardianship.

Third parties can come in and ask the court to either remove the guardian and replace him with somebody more appropriate or to cancel the guardianship altogether for you if it’s appropriate.

 

If You Are Getting Older, Please Consider Power of Attorney Documents

If you’re an elderly person or getting to the point where you want to think about a point where you may reach incapacity, you definitely need to think about this.

You should come in and at least get some power of attorney documents put in place where you can choose proactively who you want to name as your agent to make those decisions for you.

Who you trust rather than leaving it to the whims of the guardianship court to determine who the court thinks is best to make those decisions for you.

In any event, if you’re stuck under a power of attorney or a guardianship and need help getting out, definitely come and see us and we’ll talk you through those processes of what needs to be done to help you gain your independence back, to gain your capacity back, to make those decisions for yourself and to protect yourself.

Either way, we’re happy to help here at Clear Counsel Law Group and we have a lot of experience helping people with these issues.

Give us a call here at Clear Counsel and we’ll be glad to answer any questions you have about this and we look forward to talking to you soon.

 

Footnotes   [ + ]

1. Of course you are!
contesting a will

How to Contest a Will in Nevada

In the state of Nevada, a Last Will and Testament is presumed valid – even if it was written by the deceased person themselves on the back of a napkin just days before their passing. In fact, a valid holographic will only requires 3 things to be valid: that it be hand written, hand dated, and signed.

This, of course, leads to potential problems. What if the deceased didn’t have the mental capacity to make a will? What if he or she was coerced or influenced by somebody to the point that the will doesn’t actually represent their true desires?  That’s when the will must be contested.

woman writing a will

The challenge of contesting a will in Nevada

Proving any of those things will be a fight.

Contesting a will in Nevada is basically just another form of litigation. The contestant is in the role of the plaintiff, and the petitioner for the probate of the will is filling the role of the defendant. The regular rules of civil litigation also apply to will contests. Each party can gather information about the other side’s claims in the “discovery” process using the usual litigation tools of “interrogatories” and through depositions. There is going to be an evidentiary hearing, which is a lot like a trial.

The contestant has to make their case very well. As described above, the judge is going to have the default view that whatever will exists is valid. Therefore to prove the will is invalid, your case must prove one of the following:

  1. the will was not properly signed and witnessed,
  2. the testator lacked mental capacity, or
  3. there was coercion or undue influence by somebody and therefore the will is not representative of the testator’s true desire.

 

The process of contesting a will in Nevada

First, you must have “standing” to contest a will, meaning you have the legal right to bring your challenge to the court. Nevada has strong rules about who qualifies as an “interested person” in these cases and is therefore qualified as to their standing. Basically you have to have some kind of claim to the estate.

Once a will is contested, the probate court will probably appoint somebody to act as “Special Administrator” to administer the estate until the contest reaches resolution. The special administrator is not to distribute the estate until after the case resolves. The special administrator must be a Nevada resident, or a bank, or a trust company (or be associated with one of those as co-Administrator).

The litigation will proceed along established rules for Nevada. It is important to have an experienced Nevada probate law firm help you. Litigation is complex, and probate only makes it more complicated. A will being “unfair” is not good enough to get it thrown out. You will need a team to build your case and present your evidence in a way that the probate court will accept.

If you need to contest a will in Nevada, please call us today.

Power of Attorney For Mother

How Can I Get Power of Attorney For My Mother?

The question, “how can I get power of attorney” for a person is among the most frequent inquiries our estate planning department receives. Most people have a general idea of what a power of attorney is, however, relatively few understand how it is granted and when it can be granted. This article will discuss the two main types of power of attorney and what they cover, how someone can grant power of attorney to another person, and the importance of capacity during execution of the power of attorney.

What is Power of Attorney and What Authority Can it Grant?

Nevada law defines “Power of Attorney” as “a writing or other record that grants authority to acting the place of the principal.”[1] The principal is the “individual who grants authority to an agent in a power of attorney.”[2]

Nevada deals mainly with two types of power of attorney: Power of Attorney for Financial Matters and the Durable Power of Attorney for Health Care Decisions. Each power of attorney is important in its own sphere and a principal should ideally execute both.

The financial power of attorney allows the principal to appoint an agent to whom she can grant authority over several items including real property, personal property, bank accounts, and the personal maintenance of the principal. The principal can also elect whether to make the power of attorney effective immediately or upon the determination of doctor that the principal no longer has capacity.

The health care power of attorney allows the principal to appoint an agent she authorizes to make health care decisions on her behalf if she is otherwise unable to make those decisions herself. This power of attorney also allows the principal to declare her desires in regard to whether she wants life prolonging treatments commenced or continued.

Execution of Power of Attorney

Nevada law requires certain procedures to validly execute a power of attorney. The financial power of attorney and power of attorney for health care decisions both have their own set of requires for the actual execution of the power of attorney.

The financial power of attorney must be sign by the principal, or in the principal’s conscious presence by a person directed by the principal to sign the principal’s name. The signature is presumed to be valid if notarized.[3]

The health care power of attorney must be signed by the principal and the signature must either be notarized or witnessed by two adults who know the principal personally.[4] The witnesses also cannot be a health care provider or the appointed agent and the at least one witness must be a person who is not related to principal and has no interest in the principal’s estate.[5]

The Importance of Capacity

Besides proper execution, the statutes governing power of attorney also provide extra requirements for validity in certain situations to ensure that the principal is competent to execute the power of attorney. One of the most important aspects of establishing a power of attorney is that this is not an authority or position that a potential agent can actively seek out and obtain on their own; you cannot go and “get” power of attorney. Rather, this authority is granted to the agent by the principal of their own volition. A person lacking capacity cannot make this appointment.

Nevada law is careful to only allow competent persons with capacity to execute powers of attorney. The law is so concerned with a principal’s competency that it requires proof of competency in certain cases. The statutes for both the financial power of attorney and the health care power of attorney provide that, “if the principal resides in a hospital, residential facility for groups, facility for skilled nursing or home for individual residential care,” when the power of attorney is executed, the power of attorney must be accompanied by a certificate of competency from a physician, psychologist, or psychiatrist declaring that the principal has the requisite capacity to execute the power of attorney.[6]

The Importance of Power of Attorney

A valid power of attorney is a vital part of any person’s estate planning. Unlike other parts of an estate plan which contemplate what happens after a person dies, powers of attorney take into account a person’s needs during their lifetime. In many cases, a valid power of attorney can prevent the need for a court-appointed guardianship. The cost of having the power of attorney correctly executed is well worth any person’s time and can certainly simplify matters when caring for a loved one in need of assistance.

[1] NRS 162A.090.

[2] NRS 162A.110.

[3] NRS 162A.220(1).

[4] NRS 162A.790(2).

[5] NRS 162A.790(3)-(4).

[6] NRS 162A.220(2); NRS 162A.790(5).

las vegas real estate

Las Vegas Finally Picks Up After 2008

Clear Counsel Law Group is pleased to feature this blog post by our friend Margaretha Breytenbach who has helped many of our clients make responsible real estate decisions.

The Great Recession of 2008 became known as the 2008 financial crisis and it made way for the most widespread disruption to the US economy ever since the Great Depression is the 30’s. It started in 2007 when the US real estate market began falling apart and delinquencies of mortgages increased. By September and October of 2008, it created a nationwide financial disaster. The US government provided extraordinary assistance to financial institutions by flooding the market with money, adding liquidity and increasing government spending.

When the leverage credit market seized up, and the US mortgage giants Fannie Mae and Freddie Mac went flop during the summer, the government was distressed since these two are highly important in the US real estate market. Since the failure of those two institutions could cause the fall of the entire financial system, the US treasury injected $200Billion of funds as new capital in the form of stocks.

Jobs and Tourism

Las Vegas, being one of the most sought after tourist destinations in the US, became the epicenter of foreclosures. When there are only few people left spending their earnings in a casinos, hotels and bars, incomes get depleted, and mortgages go unpaid. The unemployment rate rose when business tried their best not to go underwater by cutting manpower. Many are yet to recover from it.

Many construction projects were put on hold when US citizens felt Vegas party trips were no longer a responsible use of income. Major constructions went bankrupt and halted their completion like the Summerlin shops and Cosmopolitan. Everyone in our tourism-driven community felt the pinch.

Why now is a Good Time to Invest in a Home?

Everyone almost gave up when we went so near rock bottom. Even the middle class has bankruptcy declarations; about 13,068 (individual and business) foreclosures were from the Clark County. It increased by 2010 to 25,000 but eventually recovered in the first quarters of 2015 to 4,566.

The market was slow in picking up the pieces left by this upheaval in the US housing bubble. However, the latest findings show that where it struck hardest, the recovery will also rise fastest. Las Vegas had made the largest jump in the number of renters to owners ratio from 39.5% (2006) to 49.4% (2014).

Home values are now recovering at a fast pace; more so due to the fact those tourists are again pouring back to the Strip. Businesses are booming. All temporized construction and plans are resumed. Las Vegas is reinvented and reinvigorated.

Born and Raised in South Africa, Margaretha has moved in the USA since 2004 after extensive travel through Europe. Well versed in the international market, she was also able to cater her Real Estate services to those from Canada, China and Europe. Whether you are looking to buy, sell, invest as a first time home buyer or a seasoned investor; it would be Margaretha’s honor to apply her strong negotiating skills to your transaction. She is motivated to build a strong business relationship with all her clients and can show you why she is the right person to market your home.“Top 100 Women in Real Estate in 2017” by MYVEGAS Magazine, Top 10 Real Estate Agents on Social Media by Property Sparks and currently the #1 Real Estate agent for 2018 with Urban Nest Realty.

Contact information:

Mobile: 702-813-1770

email: mbreytenbach@mac.com

undue influence in a will

Proving Undue Influence in a Will

When a will is admitted to the Court for probate, there are often parties who contest the will and attack its contents  These parties are generally the children or other family members of a decedent who would have inherited under the decedent’s will had the decedent not made later in life changes to their will. Often times what the contestants argue is that the decedent was a product of undue influence, coerced into changing their will by a person with whom they had a special relationship or upon whom they relied for care.

proving undue influence in a willThe contestants can attack the validity of the will by arguing undue influence. In certain situations, undue influence is presumed. When a will gives property to a person’s caregiver, the person who drafted the will, or the person who paid to have the will drafted, those transfers are presumed void. For example, if an elderly person’s in-home nurse is beneficiary of their will; the Court will declare the will void and refuse to distribute the property to the nurse.

The theory being that the elderly person relied on the nurse for care, and the nurse could have abused her position and coerced the elderly person into naming her as a beneficiary under their will. To rebut the presumption, the nurse would have to prove to the Court by clear and convincing evidence that the gift of property to her through the will was truly the wishes of the decedent and not the product of undue influence.

In other situations, wills are attacked by family members based on undue influence when a will disposes of property in ways that seem unnatural or suspicious. In a case where the presumption of undue influence does not apply, a will contestant must prove undue influence by a preponderance of the evidence.

Meaning, that the contestant must show the court that the gifts under the will were “more likely than not” the product of undue influence. A situation may arise when an elderly person is befriended by someone later in life, and that person ends up taking under a will where the person’s children were originally set to take.

Undue Influence in Nevada Case Law

The Nevada Supreme Court recently decided In the Matter of the Estate of Arlan Edward Bethurem, that this somewhat relaxed standard of proof was the best way to protect vulnerable persons who may have been susceptible to pressures that overrode their true wishes for disposition of their property.[i]  The Court established a strong public policy of protecting the elderly and the vulnerable by accepting circumstantial evidence to prove undue influence, noting that pressures may be exerted in secret and impossible to prove.

Although the Court did not impose the highest standard of proof for showing undue influence, it should not be taken lightly, as substantial evidence will need to be presented to meet the burden of proof by a preponderance of the evidence.

As always, if you or someone you know is faced with a situation as illustrated above, where their loved one may have been the product of undue influence, make sure you consult an experienced probate attorney. Caution should always be taken before attacking the terms of a will because doing so may make you ineligible to inherit under the decedent’s other estate plans, such as a trust. Additionally, an attorney can assist in weighing the likelihood of your chances of successfully invalidating a will.

For a consultation on this or any other issues, contact our knowledgeable probate attorneys at Clear Counsel Law Group.

 


[i] 129 Nev. Advance Opinion 92, November 27, 2013.

Can I Sue My Sibling for Exploiting Our Elderly Mother? Standing Up Against Elder Abuse.

Southern Nevada is a welcome retirement location for many elderly individuals. Census data shows that an estimated 12-15% of Clark County, Nevada, residents are 60 years old or older. Being aware of this significant elderly population, the Nevada legislature has attempted to provide protections for elderly individuals who might become targets for financial exploitation. Specifically, if an “older person” (meaning any person who is 60 years of age or older) suffers a loss of money or property as a result of exploitation, the older person can sue the person who caused the exploitation in order to recover the lost money or property. In addition, and as a very important addition, the person who caused the exploitation is liable to the older person for two times the value of the money or property taken from the older person. See NRS 41.1395. This claim is often called an “elder abuse” or “elder exploitation” claim.

What if I think my sibling is exploiting my parent? Can I file a lawsuit on behalf of my parent?

Often the older person’s children or other loved ones become suspicious that the older person is at risk of being exploited or is actually being exploited. Too often, one child believes that it is his own brother or sister who is exploiting their mother or father, but it is also frequently alleged that a caregiver or another unrelated person who has gained the confidence of the older person is exploiting the older person. Often the child asks whether he can file the elder abuse or elder exploitation lawsuit on behalf of his elderly parent. This question also frequently arises after the older person has died.

It is clear that the older person herself can file the lawsuit on her own behalf. However, what can be done if the older person will not or cannot file the lawsuit? Who has the legal right to protect the older person’s money or property by filing the lawsuit? The Nevada Court of Appeals provided guidance on this issue in 2015 in Echevarria v. Echevarria. In Echevarria, Michael sued his sister Angel shortly after their mother, Jean, died raising claims that Angel had taken advantage of Jean and inappropriately obtained Jean’s money or property. Among other claims, Michael sued Angel for “elder abuse” of Jean under NRS 41.1395. Jean requested that the court dismiss the elder abuse claim arguing that Michael was not authorized by the law to file on behalf of his mother.

In analyzing NRS 41.1395, the Court of Appeals concluded that the law is clear that the older person has authority to file a lawsuit for elder abuse under this statute. In addition, the Court of Appeals stated that an executor, administrator, or guardian may also file the claim on behalf of the older person, citing to NRCP 17(a) that requires the “real party in interest” to file the lawsuit. Because Michael was not the older person (obviously), and also was not his mother’s guardian nor the executor or administrator of her estate, the Court of Appeals determined that Michael was prohibited from filing the elder abuse lawsuit against his sister, and the Court of Appeals affirmed the district court’s decision to dismiss the elder abuse claim from his lawsuit.

You’ll need to be a “representative” in order to file a claim on behalf of an older person.

The Echevarria decision is not yet controlling legal precedent in Nevada because it was an unpublished decision. However, the reasoning of the Court of Appeals is correct and should be applied by the local courts in determining who has the right to sue for elder abuse or exploitation. It is clear that the older person herself can file the lawsuit. However, if the older person will not file the lawsuit or cannot file it (due to incapacity or death, for example), the only other party that could file the lawsuit for elder abuse or exploitation of the older person would be someone who is acting in an official representative capacity, such as a court-appointed guardian or court-appointed executor or administrator of the older person’s estate.

cost of estate plans

How Much Do Estate Plans Cost in Nevada?

Estate Plan costs vary depending on who does the work. A do-it-yourself solution may be quite cheap, but could easily be full of holes. For a good estate plan, you should use an estate planning attorney who has the experience to give you what you need, without the holes.

  • Basic Estate Planning Forms: $300 – $500
  • A Paralegal Prepared “Estate Plan” $500 – $800
  • An Attorney Prepared Estate Plan $1500 – $2000
  • A Complex Estate Plan by an Attorney $3000+

 

Transcript:

Hi, my name is Jordan Flake. I’m an estate planning attorney with Clear Counsel Law Group. One question that we get all the time – and it’s a very legitimate question.

In fact, nearly every client asks this, and they should ask this … Is, “What’s your fee for preparing an estate plan?”

Now, for the purpose of estate plan, I’m going to use the idea of a living trust because that’s what many people end up needing if you have the standard range of assets, where you own a house and a few bank accounts and maybe retirement accounts like insurance policies, things like that.

A lot of people will fall into the category of wanting a basic revocable living trust package which includes the trust, the will, power of attorney documents and possibly a deed transferring a house to the trust, so it’s kind of your basic estate planning package that you would get.

When we talk about preparing this, the costs on the marketplace can range from maybe six or seven hundred dollars on the low end to thirty-five hundred dollars plus on the high end for this basic living trust package.

I just want to talk a little bit about why is there this big difference in cost and how can you as a potential consumer be savvy about the differences between a lower cost estate plan package and a higher cost estate plan package.

I Understand Your Perspective; Lawyers are Also Consumers

Let me first tell you that attorneys are consumers too. We go out in the world and we have to purchase things and I can tell you that when my car breaks down or if I ever have a mechanical issue, I’m not inclined, I’m not the kind of guy who can just pop open the trunk when the smoke is pouring out and then take the wrench and impress my wife by how quickly I get it all taken care of. That’s not me. I have to take the car in and I have this kind of paranoia inducing moment where I’m talking to this mechanic and he or she seems like a really good person who’s not going to overcharge me but I’m not really sure.

I feel pretty vulnerable in that situation because really I don’t know if this fix is something that could be done for a hundred dollars or if the fix should be costing a thousand dollars and I’m worried because I don’t have that knowledge and I feel pretty vulnerable.

I take that experience and I say, “Every day clients are going to come to me and they’re going to feel some of that same vulnerability. They’re not going to know whether or not the knowledge and skill set that I possess is worth several hundred dollars or thirty-five hundred plus dollars,” so our goal at Clear Counsel Law Group is to provide you with complete transparency with respect to what the services are, what they’re going to cost and very importantly what similar services are going to cost on the open marketplace.

Why There is a Range of Cost for an Estate Plan

Let’s just take this basic estate planning package for example and you can get this basic estate planning package, you can find it out there for four, five, six, seven hundred dollars. You can find all those documents. You can also pay upwards of thirty-five hundred dollars for all those same documents.

There’s a lot of room in between, but most law firms are going to charge somewhere in the fifteen hundred to twenty-five hundred dollars to prepare all these documents. Why is there so much variance? That can be attributable to the fact that on the lower end, some of these documents are being offered by paralegal services.

This kind of frustrates me as an attorney because that paralegal, I’m not so concerned that they’re undercutting the marketplace. I’m not one to care if the marketplace gives you good product for less money. I say, “Great. If that’s the place the market is headed, so be it.”

I’m not going to try to change that.

I’m going to try to beat it in fact.

The reality is, is that a paralegal doesn’t have the license to practice law and so yes, it might be a little big less expensive to hire a paralegal but there’s no governing body like the state bar that’s holding that paralegal strictly accountable for being competent and for being ethical and for managing client’s money in the proper way.

Really that paralegal shouldn’t be practicing any type of law in the first place. They should get shut down for the unauthorized practice of law.

What do estate plans cost?

Why a Licensed Attorney Should Draft Your Estate Plan

In contrast, as attorneys, the state bar is there to watch over us and make sure that we’re always competent and always ethical and if you as the client have any type of issues with any of the attorneys then you can actually go to the state bar.

Furthermore, a paralegal is not going to get malpractice insurance. They’re not going to be qualified to have an insurance company come along and insure their practice of law because they’re not licensed to practice law.

As an attorney, if we happen to make a mistake, any attorney, they’ll have malpractice insurance in place to make sure that you don’t have to pay for their mistake.

The attorney can pay for the mistake, not you. That’s not something you get with a paralegal.

When you do pay a little bit more money for an attorney to prepare these documents as opposed to a paralegal, understand that what you’re getting is you’re getting the guarantee of having malpractice insurance in place.

You’re getting the oversight provided by the state bar and then I’d say the very most important thing that you’re getting is the experience and the knowledge to make sure that it’s being done properly.

Don’t Worry If Your Estate Plan Was Not Drafted by a Lawyer, I Can Fix It.

I see this all the time. I have individuals who come in and they say, “I don’t think that the person who prepared this document was even an attorney.”

They’ll bring me a trust, this basic trust package that I’m talking about and they say, “Yeah, a financial advisor or a paralegal prepared this for me.” I’ll look through there and invariably I’ll find something that just required a little bit of experience, a little bit of nuance and a little bit of our knowledge but they totally missed it in the underlying documents and it had the potential to cause them huge problems.

I’m going to give you a quick example.

I had a woman in here who has a child who has special needs. That child is currently receiving governmental assistance.

The trust that was prepared by the paralegal would have just given an outright distribution to this child who had special needs upon the passing of the client. If she passed away and an outright distribution went to this child, that child would have lost their government assistance and would have after a few years just been totally destitute.

That paralegal or that financial advisor didn’t have the legal background that allowed them to say, “Aha. That child has special needs. That child needs what’s called a special needs trust where we can control that money in a way that won’t affect their ability to receive governmental assistance.”

Proper Estate Planning Should Not Be Done With a Form

It’s just little things like that. It’s the nuances. Think about how important your family is to you and how important your assets are to you and then just think are you going to entrust that to an individual who doesn’t have a license to practice law.

If you’re being really honest with yourself I think you’re going to say, “No. I don’t want to take any risks with this. It’s too important. It involves my loved ones, involves my hard-earned assets to which I gave my life taking care of my profession and my savings to make this happen.”

You don’t want to entrust that to somebody who doesn’t have the skills necessary to make sure it’s done properly.

That’s the lower end of the spectrum. On the higher end of the spectrum, I have a very high opinion of the attorneys here in Nevada. I feel like most of the attorneys that I know are going to give you a fair shake. They’re going to try to be forthright and honest with you.

I do think that there are some outliers on this end of the spectrum who may be somewhat relying on your lack of knowledge and experience, to charge you more for services that another attorney would charge you much less to provide the same services. I am concerned about that. I don’t think that as an attorney I have the right to use your lack of knowledge unfairly to my economic advantage.

Obviously, to some extent I do have the knowledge and I should be compensated for that so that question of where does it become unfair is the real issue. That’s where you’re going to see most attorneys clumped into this same area where we’re within five to eight hundred dollars of each other.

These outliers where it’s way lower, that should raise a concern or these other outliers where it’s a lot more expensive, that should raise some concerns too.

In any event, our goal at Clear Counsel Law Group is to provide complete transparency for why we’re charging what we’re charging. Our goal and ninety-nine percent of the time we’re able to achieve this, is after the initial consultation we will tell you exactly what you’re going to pay.

It will be a flat fee and it will be all-inclusive of everything that you have asked us to perform. There won’t be any doubt as to whether or not you get slapped with additional fees or charges at the end of the day.

There won’t be any concern that if I take a two hour nap and I dream about my client, that I hit him with a seven hundred dollar bill because, “Well, I technically was working on your case, Mrs. Jones.” Nothing like that.

That’s where we call ourselves Clear Counsel Law Group because we prize that kind of transparency with our clientele to where you have the peace of mind that you know exactly what you’re paying for, you know exactly how it compares to the rest of the marketplace and you can rest assured that we will provide the services that we said we’d provide at the cost and with the fees that we agreed to.

Please feel free to give us a call. There is no charge for the consultation. That’s when we come in and talk about the different options. Once you select an option, then we talk about the cost for providing that service.

Then we provide the service and you pay that amount and what we hope we get out of that transaction is a life-long client.

We want it to be a super-positive experience for you and for us so that you can come back to us in the future with any other legal needs or questions.

Feel free to give me a call. We’ll meet for a consultation and then we’ll discuss the options.

Thank you so much.

ClearCast #15: Our Friends at VidAngel May Have Some Trouble On Their Hands

Welcome to today’s ClearCast! A fun one for Episode 15!

I feel like our audience will be divided into two groups: those whom are fully invested in this legal battle with no further explanation needed1)“Get to the lawyers already!” I hear you. & those of whom that have never even heard of VidAngel. If you are in the former group, please feel free to skip right to the great episode; I won’t be offended in the slightest.

Now for the rest of you, (I’m in this group too don’t feel bad), you have got to check out this VidAngel company. The marketing is hilarious! I’ve enjoyed it thoroughly.

In essence, this streaming service provides a means for consumers to censor movies in the way that they choose, whether it be censoring language or violence.

I’ll let Mr. Flake and Mr. McArthur explain the specifics of how it works.

For those of my friends of the more liberal persuasion that likely are objecting to on the grounds of “censoring art,” I have a couple of questions for your consideration.2)Mr. Flake and Mr. McArthur have some great ones of their own as you’ll see

  1. Shouldn’t parents be permitted to introduce their children to socially questionable material on their own terms instead of what Hollywood thinks is best? (as in, the majority of society has questions about certain behavior)3)Is this about Freedom?
  2. Wouldn’t you at least concede the the violent imagery/language on tv/in movies is more extreme now than it has ever been?4)For those of you who say “then just don’t watch it.” Don’t worry..

I don’t have children, but these desires seem very reasonable to me.

Nor do I have a stake in this fight5)I have not nor would likely use the service, but I certainly pity the good folks over at VidAngel. From what I’ve seen, I really think they meant well.

Thanks for watching!

-Brian

[End note]

..There’s been an update! The 9th Circuit ruled; see below.

Jordan Flake: Welcome to Clear Past. I’m attorney Jordan Flake and I’m really happy to be joined by Matt McArthur. He’s an attorney in our firm who practices in bankruptcy. Even though this video isn’t about bankruptcy, you’ll see that Matt has some experience that makes his viewpoint on this subject relevant. What we’re gonna talk about today is in response to this New York Times article that’s catching a lot of interest. It says here, “Hollywood: Faith Goes to the Movies.” What the article addresses is the streaming video service called VidAngel. Now, I know a lot of my Facebook friends and family have used VidAngel. We’ve had conversations about it. I’m sure you’re the same.

Matt McArthur: Sure.

Jordan Flake: Have you used VidAngel before?

Matt McArthur: I have.

Jordan Flake: Okay, so you’re a consumer of VidAngel.

Matt McArthur: Yeah

Jordan Flake: Tell us why you wanted to use it, how it works. A lot of you probably already know, but just by way of review Matt’ll talk to us about how it works and then we’ll get into what’s happening with the lawsuit. Go for it.

Matt McArthur: The way VidAngel works is you go through their services, through their website or their app and you purchase the digital rights to a movie or a television show, and it’s akin to a cross between Redbox and Netflix where you can stream the video content that you’re purchasing and still have the option of being able to keep it for a short period of time, sell the digital rights back after a day, and still be able to recoup the vast majority of the expense of actually buying the movie. In the past, my recollection is a little fuzzy here, but it was about $1.50 or something in that neighborhood to be able to watch a movie for 24 hours and be able to give those rights back to VidAngel.

Jordan Flake: Great, and so what happens then is you buy a video off of VidAngel, you purchase it for a good reasonable fair market value, they have a digital copy which they’ve purchased that corresponds with your copy. In that sense the studios are being made whole by the fact that there’s an actual copy corresponding with the copy that you purchase in your home?

Matt McArthur: Correct.

Jordan Flake: Why VidAngel? What’s VidAngel?

Matt McArthur: The neat thing about VidAngel is unlike Redbox or Netflix, by using the VidAngel app you’re actually able to edit the content that you’re consuming. If you wanted to filter out all of the F-words in a movie or all of the graphic violence or nudity, you can filter that right out of the movie and be able to watch a movie that you are otherwise unwilling, or perhaps your children were unable to watch.

Jordan Flake: Brian’s off camera here. Brian, did we get some of Matt’s beautiful children in this?

Brian: They are in the shot you bet.

Jordan Flake: Are they in the shot? Okay, because we have here Davis, and Allie and Dex. We don’t necessarily want these little children of yourself watching some of the content, but at the same time there’s some really great stories out there. I don’t know if Davis is ready for Last of the Mohicans or something like that, or Lord of the Rings, Lord of the Rings being a great one. There’s just a few things that might be too scary for kids his age.

Matt McArthur: Sure. You’re able to consume the vast majority of-

Jordan Flake: Do you remember what VidAngel movie you watched? Maybe you don’t remember.

Matt McArthur: I do remember. We watched Argo. I didn’t watch that with the kids, but I watched that with the wife and that was a movie that we would have otherwise not watched. My wife’s appetite for that type of material in movies is perhaps not as high as some others.

Jordan Flake: Argo’s a great example because you take a few language elements and there’s really nothing super violent about it, there’s nothing inherently inappropriate from a sexual, nudity standpoint. You win. You’re winning because you’re bringing in this movie in the home. From VidAngel’s perspective they’re winning because when they sell you the movie and buy it back, they get to pocket the dollar or $1.50 or whatever from the transaction.

Matt McArthur: By the way, if you decide that you like the movie so much, you can retain the digital rights.

Jordan Flake: You don’t have to send it back. It’s $19 or whatever. From VidAngel’s perspective, they would also say, “Hey, the studios are winning because we bought a copy to correspond with the copy that we sold to the McArthur family. Now, obviously they’re upset. The studios are very upset at this. I think the reason’s they’re upset probably go beyond the scope of my understanding of the industry, frankly. At a bare minimum, we know that the studios make these contracts with Netflix, with Redbox, with Amazon, Amazon Prime, Hulu, Blockbuster, whatever. The VHS at Blockbuster. Bryan’s dying off camera here. Basically, they want to be able to control the digital content. I wouldn’t be surprised if in the final analysis, in the smoke-filled room where the diabolical studio executives are sitting, just kidding. The real question here is one of how to control the digital content, not just for this one little VidAngel slice of our story, but also prospectively in the future. How do we make sure that we control this?

Matt McArthur: I was just gonna follow up on that presumption you’re making. Do you think it’s more of a artistic license freedom issue or is it a monetary issue, or both?

Jordan Flake: Both because I think there’s a situation where the movie creators, the creative minds, they get done meditating in the morning and having their chai latte. I’m so full of stereotypes today. What’s going on? The point is they say to the studios, “I want creative control over this.” If the guy who produced Argo, which I think is an excellent movie, if he comes along and the studios say, “Hey, by the way, one of the ways that Argo’s gonna get disseminated out to the public is by way of VidAngel, and they’re gonna take your movie and make it appropriate for five year olds.” They’re gonna say, “Well I’m not gonna do business with you, studio, because I have my artistic standards and I want my work to be protected.” I definitely think that there’s a creative, protect the creative process, “my movie is a work of art and I want it to be put out in the marketplace the way that I intended it to be put out there, not in some other diluted form.”

When this originally happened with CleanFlicks, another prior company that underwent a similar lawsuit, Steven Spielberg took great exception to his masterpiece, Schindler’s List, being totally neutered by CleanFlicks, turning it into a story about a really nice business guy who hooked up some victims with an additional life. The violence, for Steven Spielberg, was a necessary element to show the horrific suffering of the Holocaust on the one hand, and the extreme magnanimity of Schindler in purchasing and doing what he did to preserve these lives on the other. To him, it was a huge affront to take this and gut it, from a creative angle.

Matt McArthur: I get where you’re going with that, but at the same time, if you look at what TNT or TBS does when they’re replaying movies for the general TV audience, there’s censoring.

Jordan Flake: Or what they do on airliners, right?

Matt McArthur: Sure. That can’t be the whole story.

Jordan Flake: They’re responding to a market need. That’s all the VidAngel are trying to say is, “We’re just responding to a market need here, and one of our needs is the McArthur children. We want to bring quality films like Argo, take out the few objectionable parts and makes it so that Misty McArthur can enjoy viewing that movie. I understand that. That’s the creative side. The money side is obviously they don’t want Jordan Flake purchasing 10 digital copies of a movie and then going to my friends and saying, “Hey everybody, I’m gonna create Jordan Flake’s digital streaming platform, and I’m gonna rent these movies out to you, and you guys are gonna give me three bucks back.”

Matt McArthur: They’re being completely cut out of the deal.

Jordan Flake: Cut out of the deal because I’m the guy, it’s sort of a Napster except for Napster was illegal downloads, this would be legal downloads, but unanticipated hosting, me capitalizing off of somebody else’s hard. Those are kinda the big questions. VidAngel, I’ve seen their videos, their ads are funny. They run a very good defense of what they’re trying to accomplish and what they’re trying to do. Let’s talk a little bit about one of the cases right now. Right now there has been an injunction issued against VidAngel.

Matt McArthur: Take a step back. Big studios are suing to stop VidAngel.

Jordan Flake: Studios are suing to stop VidAngel and saying, “This represents a huge end around of our entire industry. It threatens the creative side, it threatens the monetary side, and we gotta shut VidAngel down.” VidAngel’s waving their hands and saying, “How can you tell me I can’t buy a Pablo Picasso. I can buy a Pablo Picasso and I can tape other little figures in the Pablo Picasso or I could cover parts of it with sticky notes because it’s mine. I own the Pablo Picasso, I can put sticky notes on it. Then I can go back to the art dealer and say, “Hey, the sticky notes didn’t do any damage cause it was on the outside of the frame. Now I’m gonna sell you this Pablo Picasso back and you get to keep some of the money from the transaction. How can you tell me what I can and can’t do with your art that comes into my home?”

This is where the streaming rights, it gets very complicated, the monetary angle, what the studios are allowed to do, what they’re not allowed to do. The studios have agreements in place with the creative minds that we won’t let certain things happen with your content. That’s where it becomes an issue and they sue to shut VidAngel down. They did something called an injunction. Although that’s not my area of expertise, civil litigation, my understanding is that an injunction is basically saying, “Hey listen, Your Honor. We need to shut these guys down now.” It might take two or three years to resolve this case, but in the meantime VidAngel shouldn’t be allowed to operate because they’re doing irreparable damage to us by not allowing us to capture the profits that we would otherwise. They’re probably hurting our relationships with Netflix because one VidAngel tagline is ‘See this movie before it becomes available on Netflix,'” which must have the studios pulling their hair out.

There’s the irreparability angle, and also there’s a likelihood of success of the merits angle. It’s probably pretty hard to get a California court that are traditionally very liberal, traditionally very everybody has their day in court, to issue this injunction unless there really was a likelihood of success on the merits. Right now there’s an injunction in place and they’re saying, “You can’t go show these movies.” I guess, Bryan, was there a violation of the injunction?

Brian: My understanding is that Neal kept putting movies up on VidAngel after the injunction was put in place.

Matt McArthur: Neal is the owner of VidAngel, correct?

Brian: Yeah, he’s putting up new films as well. Sully, and two other films.

Jordan Flake: Just the mere fact that we’re saying Sully, I can see the directors and creators of Sully saying, “That was a family movie to begin with. Why am I subjecting it to this filtering service?”

Brian: Maybe Tom Hanks is saying, “I want as many people as possible to see my movie.”

Jordan Flake: Exactly, maybe he’s saying, “Let it go with this. I want the McArthurs, who for whatever reason they object to the use of this word or that word, they’re still getting the main idea of the film. They’re still getting to appreciate a nobility of the character, etcetera. That’s this current legal status. Do you have any thoughts about what’s likely to happen, how it’s gonna go down, what you hope happens?” Just give your take on that.

Matt McArthur: I can’t say that I used VidAngel a lot, but the times that I did use it, I was very impressed. It really opened doors to us that were otherwise shut, either because me and my wife were unwilling to watch a movie with content that we didn’t really appreciate, or because I wasn’t going to subject my children to certain types of content. For me, as a market consumer, it gave me more options and more content. Quite frankly, it was really convenient. It was like I didn’t even have to go down to the Redbox and rent the blue-ray. I could just stream it from my own home, and have a really nice, cheap on-demand type service, or I could just stream the movie. From my perspective, I would love to see VidAngel be able to overcome this lawsuit and be able to continue it. Whether it’s working out some sort of arrangement with the production companies to where they’re being cut in, or winning outright.

Jordan Flake: I think that’s where consumers probably would, if they’re thinking about this clearly, that’s what we would all hope for.

Matt McArthur: There’s some kind of room for a middle ground where everybody can win.

Jordan Flake: There’s gotta be a way that says, “Hey, listen, studios. Why don’t you create VidAngel, brought to you by the studios?” Then I think the hangup there is that the creative side might not appreciate that, but then you have the TNT, TBS, airline exceptions. Why don’t those things come into prevalence? This is obviously a big bowl of fish hooks. I think one thing I can say is we can’t have a situation where regular consumers are setting up movie hosting sites that undercut the studios. The reason why I say we can’t have that situation is because if the studios can’t make money off of streaming, they’ll stop creating movies and then it’ll be incumbent on the individual users to create movies, the individual hosting sites to create movies. That’s something that VidAngel is facing right now. Netflix is coming up with original content. Honestly the Netflix original content is probably a surprise for most people. Wouldn’t have thought that Netflix was going to be doing its own shows.

Matt McArthur: Yeah, they had some … They had some big hits there.

Jordan Flake: Several years ago, they’ve had some really good hits. Maybe that’s one angle, is VidAngel can do its own content. Maybe there is some comprise to be had between the studios and VidAngel. It’ll be interesting to see how it plays out. I definitely hear you on the content things. Under any circumstances, the McArthurs certainly are not going to change their mind about allowing certain content in the home. It’s just not gonna happen.

Matt McArthur: Quite frankly, if the movie companies are being cut in on some of these rental profits that VidAngel’s currently making, it’s simply broadening our horizons.

Jordan Flake: We’re very interested. We know we have viewers out there who, like Matt, have tried VidAngel and were very curious to see where you stand on this. We’ll keep you posted if there are any interesting developments in this story. In any event, it’s very interesting to see how this’ll progress. Thanks so much for joining us for Clear Cast. Definitely let us know how you feel about this. Thanks.

Matt McArthur: Bye, everyone.

 

[Endnote]

The 9th Circuit denied the emergency petition from VidAngel. (The 9th Circuit is essentially “the California circuit”. Hard to imagine them weakening the copyright protection of Hollywood, yes?)

Next week I’m going to explain why as a Nevadan, you should be concerned if they don’t add a ninth justice to the Supreme Court.

How do you feel about living under California law?

Stay tuned..

Footnotes   [ + ]

1. “Get to the lawyers already!” I hear you.
2. Mr. Flake and Mr. McArthur have some great ones of their own as you’ll see
3. Is this about Freedom?
4. For those of you who say “then just don’t watch it.” Don’t worry..
5. I have not nor would likely use the service

ClearCast #14: In Response to the Rob Graham Matter

[Editor’s note]

Welcome to today’s ClearCast!

A quick word about today’s video.

If you are unfamiliar with what is being alleged, you can read more here about one of the victims. This is a horrible story about a local probate lawyer allegedly misappropriating client funds; it could be for even more than 13 million dollars.

If you are a client (or prospective) of Clear Counsel Law Group, we understand that it’s important that you trust us with your most valuable assets.

In turn, we produced this video to explain how your money is protected.

Of course, if you have specific inquiry (or just need a little reassurance, certainly understandable), please reach out to us at (702) 522-0696.

Thank you and Merry Christmas!

-Brian

[End Note]

 

ClearCast Episode 14: Answering Your Questions Regarding Rob Graham

Jordan Flake: Hi, I’m Jordan Flake and I’m here with my partners Jared Richards, Jonathan Barlow. The three of us are the managing partners are Clear Counsel Law Group, and welcome to another ClearCast. Today we’re going to be talking about something that has kind of rocked the legal community. We’ve had friends and family who’ve asked us questions about this news story. Through this ClearCast and potentially others, we hope to respond to some of these questions we receive, but I’m referring to the Rob Graham issue. Rob Graham is an attorney here in town. He practices in the areas of guardianship, probate, trust administration. The allegations right now are that he stole money from his client’s trust account, basically that he misused that money. A lot of my friends and family have asked me, “What’s a trust account? How did this happen? Why can an attorney all of a sudden steal a lot of money?” The allegations are that he stole $13 million, potentially, of his client’s money is missing.

First of all, before we even get into those questions, we just roundly wholly 100% condemn any type of misuse, any type of unethical illegal access to clients’ funds. That should never, ever, ever happen and we’ll talk a little bit more about that. We all feel horrible and we spend a lot of time talking about the clients who are victims in this situation, and our heart goes out to them and their families. We’ll talk about that a little bit more too as well, that we feel really, really bad. It’s the worst possible way to spend the holidays, knowing that there was money that was being held and entrusted in an individual and now that money has essentially been stolen.

First, Jonathan, you’re the one who, in our firm, in the three of us, you take a little bit more of a lead role in managing the trust account. Can you talk to us and some of our viewers about what is a trust account and difference between a trust account and operating account, how that works. There’s a chance that people viewing this may actually be our clients and have money in our trust account right now and they’ll want to know what’s going on.

Jonathan Barlow: What we’re doing. In short, there’s two types of accounts that a law firm generally holds. One is what we call the operating account. That’s money that we’ve earned. It’s our law firm’s money. We’ve earned it through fees, through clients paying us money to perform our services. That’s our money as a law firm. We use that to pay our employees, we use it to pay our rent, and all the other expenses of operating the law firm. That’s our operating account.

The story about Rob Graham doesn’t really have to do with his operating account as far as the missing funds. What the missing funds came from was that second type of account that’s called a trust account. A client trust account. Attorneys in various types of practices will have a reason to be holding money in a bank account that is not our money. For instance, just like Mr. Graham did probate work, we do probate work. That’s when a deceased individual leaves behind assets that need to go through a process before they’re distributed to the heirs. In doing that probate work, we’ll collect a bank account. We’ll close a bank account that the deceased individual had and we’ll bring that money and deposit it to our client trust account.

Though that account at the bank is held with our law firm’s name on it, it’ll say “Clear Counsel Law Group” on the account statement as a designation IOLTA interest on lawyers’ trust account, it’s not our money. It’s not ours. We are responsible to ensure that it goes to the right places, that it’s applied appropriately. We are strictly prohibited from reaching into that client trust account and using it to pay anything other than the client’s expenses.

Jordan Flake: Let me just stop you there and make sure that everybody’s understanding. Grandpa John passes away and there’s a bank account just in his name at Wells Fargo. There’s $48,000 in that account. We get a probate started and we can go and we can liquidate that $48,000. We can’t turn around and use that $48,000 to pay our employees, to buy Christmas presents for our family. We can’t do anything like that because it’s actually the family that Grandpa John left behind, that’s their money we’re just holding in trust. Can I shift over here to Jared? Jared does personal injury. Can he talk to us a little bit about the mechanics of a trust account in the personal injury context?

Jared Richards: Right. In a personal injury context, we go and we gather money for an injured person. When we gather the money, we put it into our trust account. Again, the moment it hits the trust account, it is somebody else’s money. We then are responsible for making sure that that money goes to the right places. The money will often need to go to pay for medical providers. Sometimes it’ll need to go to pay back, say if Medicare or Medicaid had paid medical bills. Sometimes that happens and we have to repay the government. Then we have to pay our clients. Out of that, we also get paid a fee.

At the end of a case, when we are going to distribute money, before we distribute money to ourselves for certain, we will send the client an accounting so the client knows where all the money went, where if we had to advance money for filing fees with the court or to pay to go depose another party’s expert and we advance that money, we also account for that money when we get paid back for that amount. At the very end of the case, the client knows where every penny has gone and then gets the money that the client deserves.

Jordan Flake: There’s a $50,000 vehicle insurance policy, $50,000 policy. You make a demand and say, “Hey, insurance company, your guy, your insured hit Tommy, our client.” We give us the $50,000 and we hold that in trust because Tommy has medical bills that need to be paid out of that purse.

Jared Richards: Right. For example, as you said, let’s say that Tommy got hurt and there’s a $50,000 insurance policy. We make a demand on the insurance. The insurance company agrees and they pay $50,000. That $50,000 would go into our IOLTA trust account, the trust account we hold for clients. We then do an analysis of are there medical bills that need to be paid out of that account? Are there contractual obligations that our client has that we need to honor in that account?

Jordan Flake: If we just gave that money to the client …

Jared Richards: Then it would be a problem because then we may be breaching the client’s contractual obligations. We may be breaching our own contractual obligations, and we may actually be violating the law that require us to, say, pay back Medicaid.

Jordan Flake: Right, and if we use that $50,000 to run off and pay our own expenses …

Jared Richards: Then we’ve got major problems. We’ve just stole the money.

Jonathan Barlow: Then a similar issue related to that is several law firms have several different actual trust accounts with different account numbers. We hold all ours in one account. We got Mr. Jones’s money in there, we got Ms. Smith’s money in there. It’s all in there. Just like we can’t use the trust account to pay our expenses, I can’t use Mr. Jones’s money to pay Ms. Smith’s medical bills for her case.

Jordan Flake: Which is why from an accounting standpoint we have sub-accounts that we keep track of who has what share of that account.

Jonathan Barlow: What we do is we have every single case that we have, every single client that we have, we separately distinguish, this is their money, this is where it went, this is where it’s going. Because I can’t dip into this account or this person’s money to pay the other person’s money. That’s essentially how a trust account works until it’s determined, like Jared said in the personal injury context, this is where all the money’s going. Similarly, we do that in the probate or trust context of determining where it’s going to be distributed.

Jared Richards: We’re all very careful to not make mistakes. However, if the attorney does make a mistake with that money, the attorney is personally responsible for that money. While that money is in the attorney’s trust account, that attorney’s on the hook for all of it.

Jordan Flake: Right, and that’s been my experience since starting our law firm, is that when we have our trust account checks and I’m signing a check and that check’s going out the door, I look at that and I say, “Am I sure that this money is money that is under the law ready to be legally paid out?” There’s no other considerations here, because if I did send out a check that I shouldn’t have sent out, then I personally am on the hook for that. I would go to Jonathan and I’d say, “From operating account you need to reimburse this client because we mismanaged some trust funds and we need to put it back immediately.” If that ever happened.

Jared Richards: Not that that does happen because we’re careful, but if it were to happen, that’s exactly what would happen.

Jonathan Barlow: In the Rob Graham context, one of the big questions is it’s $13 million, and that’s a significant and sizable trust account.

Jordan Flake: Clear, I’m going to lawyer this one. To be clear, we don’t know. We don’t have any personal knowledge about what went on with Rob Graham. We just read the same newspapers everybody else does and we hear the same allegations. When people are hurting and they lost their money and it appears that an attorney abused a position of trust, we’re all human first and we are rabid and we want justice, but Jared, I think what you’re getting at is facts are going to come in and we need to be careful.

Jared Richards: The allegation is right now that he stole $13 million, and if that’s true, then [crosstalk 00:09:56].

Jonathan Barlow: My only point is the price tag is shocking, the amount.

Jared Richards: It’s a huge amount.

Jordan Flake: What is alleged to have happened here, if you guys want to go into that at all? Did Rob Graham one day open up his online trust account and see that there was $13 million and think, “Okay, this is my chance to write a check to myself?” What’s the allegations say?

Jared Richards: I think that what happens in situations like this, you have two possibilities. Either the attorney makes a conscious decision to liquidate the entire trust account and run away with it, which I don’t know of any actual incident where I’ve heard that happening, but I’m sure it has happened before. I think that the allegation here is that Rob Graham was not running as efficient and as successful as a business as he wanted to project, and that he was using client money to supplement his own business, his own money, which is just as illegal and just as wrong. It’s just a slower and more slippery slope.

Jordan Flake: So there wasn’t a $13 million check?

Jared Richards: Probably here. We don’t know.

Jonathan Barlow: I don’t think that’s the allegation. I think the allegation right now is that over the course of time, he started dipping into some client funds and then continue to dip in to try to make that right. Sort of a Bernie Madoff type of a transaction.

Jordan Flake: Ponzi scheme.

Jonathan Barlow: Almost a Ponzi scheme.

Jordan Flake: Almost, where he’s using the money that’s there today to meet those obligations.

Jonathan Barlow: Exactly.

Jared Richards: And hoping that the money tomorrow will come in to pay yesterday’s obligations.

Jordan Flake: The money that he’s waiting to have come in through the door in this situation appears to have not been his money, and that’s the major, major problem. If we’re just running all of our expenses out of the operating account, that’s business. That’s just the way it’s done. If an attorney were to ever dip into the trust account and say “I need to make payroll this month. Shoot. I only have $15,000 in my operating account and I have $4 million in my trust account. I could use some of the $4 million to pay my payroll since I don’t have enough in my operating account.” That’s kind of what might have happened here.

Jonathan Barlow: Who knows if thinking, “I’ll pay it back.”

Jordan Flake: I’ll make it back and I’ll …

Jared Richards: The only difference between the allegation of him stealing all $13 million in one fell swoop or him dipping in month after month for a number of years is the dipping month after month, we can more humanize it, but it doesn’t make it any less wrong.

Jordan Flake: Right, because the end result is the same, which is a tragedy of thinking, “My Grandpa John died. He had $48,000 in his Wells Fargo account. We hired Rob Graham to go and liquidate that $48,000 account and we were going to split it up three ways.”

Jared Richards: Exactly.

Jordan Flake: “We were hoping to be done around the holiday season so we could all have that extra money to go out and buy Christmas gifts or whatever for our family.” Now that money’s gone. That’s horrible.

Jonathan Barlow: It’s devastating.

Jordan Flake: It’s devastating to the families.

Jonathan Barlow: There’s a couple other allegations that raise points that are red flags in the way that a lawyer handles his trust account. Apparently, according to allegations, it appears that Mr. Graham was the only person at his office who really controlled the trust account, who had any access, knowledge of the trust account. That sure makes it easier to hide some things that you don’t want other people to know about. One good protection, and particularly with the three of us here, is to have multiple people who have control of the trust account, who have eyes on the trust account, and who review that trust account and realize, “What’s this payment coming out?” And can question those things if necessary. That’s been a good thing for us, is that the three of us can have that equal access to it, equal control over it. Heaven forbid one of us try to do something wrong. You have two people who are going to watch over it.

Jared Richards: Exactly. You have at least multiple partners that have oversight that can track it. Also, something that we do that I think more firms ought to do is we have a bookkeeper that is the employee of a separate accounting firm who helps us keep track of our books. If there are abnormalities that happen in the books, the bookkeeper would be alerted and the partners would be alerted. Those two things are safeguards: multiple partners with oversight, and somebody outside the firm that’s connected to a separate accounting firm that has oversight as well.

Jordan Flake: To that point, you have the bookkeepers keeping their books and we’re keeping our books and they have to match up every single time. That’s all done internally. One of the problems with the Rob Graham case, the allegation is that his mother-in-law was the bookkeeper, and so those conversations and those huge red flags that needed to pop up in this context apparently never did.

Jonathan Barlow: Right. If our books that we keep here on my computer don’t match with the accountant’s books, then we make the correction as necessary.

Jordan Flake: Do either of you expect to see more regulation from the government or the state bar? State of Nevada, or the state bar?

Jared Richards: The problem is that from time to time, you will hear the Nevada bar reprimand somebody for overdrawing their trust account. Because any bank, the rule is the banks, if they hold attorney trust account money, if the check bounces, if the account is overdrawn, the bank is required to notify the state bar so the state bar can do an investigation as to why. The shocking part of Rob Graham is yes, it appears that he may have stolen some money. I know, I’m a lawyer, I’m being all cautious. That’s why they’re smiling. Because we don’t know. The allegations may have some …

Jonathan Barlow: It’ll come out.

Jared Richards: Yeah, the allegations will come out and the facts will come out in their own due course. The two things that are utterly shocking about this case is the size of the alleged theft and the prominence of the attorney. In the probate estate planning community and those people that watch, I can’t remember what news channel Rob advertised on, but Rob Graham’s a known name. We all know the name. Between those two things of a large amount stolen by a noted, prominent attorney, it may jar the rule makers into making more rules.

Jonathan Barlow: I wouldn’t be surprised, really, to see something else change. Really, the only time that the state bar, and this is why I think there probably will be some changes, the only time the state bar will come and look at your client trust account and make sure to get a truly outside from the government or state bar or whatever, is if there’s a complaint made against one of our attorneys, that doesn’t even necessarily have to do with a client trust account. Say one of our attorneys messed up a case. Client gets upset and they file a complaint with the state bar.

Jordan Flake: I’m going to lawyer that one too. We don’t do that.

Jonathan Barlow: Right, it hasn’t happened because we haven’t ever been audited. Anyhow, in the context of the state bar coming in to investigate, “Why’d you mess up this guy’s case?” They will audit the book at the same time.

Jordan Flake: Just as a matter of course.

Jonathan Barlow: As a matter of course, almost. That’s about the only time that they independently come in to audit books. I wouldn’t be surprised to see some audit requirements coming out of this.

Jared Richards: The problem you have with that is the sheer number of attorneys out there handling [crosstalk 00:18:06].

Jonathan Barlow: Trust accounts, yeah. It’s a monumental task.

Jared Richards: It would be a monumental task to send in auditing standards for everybody.

Jordan Flake: Right, but if that task is necessary to restore the community’s faith in our profession, which is one of the goals of the state bar, then they’ll have to do it.

Jonathan Barlow: One of the good things to that point is what’s happening with Rob Graham’s client. As discouraging as it was to see a very prominent name like this happen, we have observed the rest of what we call the probate bar. The other probate attorneys have rallied around this issue, not to pour dirt on Mr. Graham’s grave, but to try to get his clients back to where they need to be. That was primarily led initially by Jason and Brandy Cassidy, excellent probate attorneys here in town, who took the initial task of .. What the state bar’s asking them, “Cassidies, would you do this?” They took those client files and they’ve been trying to sort through those files. They’ve done an excellent task of doing that. Now, I’ve seen multiple attorneys who have offered to help and who will be probably taking on some of those cases, including our law firm. We’ll be taking on a large handful of these cases to help them move forward.

Jared Richards: With the understanding that the money for those cases already seems to have been embezzled.

Jonathan Barlow: Almost in every case, the attorneys will be doing that pro bono, including our firm. Meaning without payment.

Jordan Flake: Without payment. You’re right. This is just a small silver lining on this sad story, but it is nice to see that the attorneys all recognize how wrong this is and what a tragedy it is for the clients involved, and to the extent possible we’re trying to mobilize our resources, and especially good shout out to Jason and Brandy Cassidy, who are really taking on the bulk of that project, and we’re all here to help. Any last closing thoughts on this from either of you? On this whole situation and what you would want to tell our viewers.

Jonathan Barlow: It’s shocking to see a story like this. It shocked us to see a story like this about an attorney. It’ll shake confidence. A lot of people don’t have good opinions of attorneys in the first place, so it’ll certainly shake some confidence of them. If there’s any hope behind this, is the fact that this is such a rare occurrence. I’ve been practicing 10 years and nationwide, this is the first story that I’ve seen of this size or nature. Just happened to happen in our backyard with somebody we know. It’s such a rarity to see something like this happen that you can take some comfort in knowing there’s a lot, 99.9% of the attorneys out there are doing this the right way, including our firm trying to do the right way the best we can.

Jordan Flake: Great, any last thoughts?

Jared Richards: No, I think Jonathan covered it.

Jordan Flake: I think the only last thing I’d say is really with any regulations, the biggest and best regulation is just be extremely trustworthy. To know why we’re doing this and to know that there are real people, our clients are real people and that they deserve trust, respect, and especially when it comes to valuable assets and things of that nature. Thanks so much for joining us for ClearCast. If you have any thoughts on this ClearCast, please link us, comment us, ask us any questions. If you would like to see us answer questions in a future ClearCast, please let us know. Jonathan, Jared, thanks so much for joining us today and we’ll see you next time.

 

Watch This Before Adding a ‘Pay on Death’ Provision to Your Estate Plan

Transcript:

Hello, my name is Jonathan Barlow. I’m an estate planning and Las Vegas probate attorney here at Clear Counsel Law Group. Thank you for tuning for yet another riveting video about probate and estate planning tips and practices that you can use to help you in your life and probably actually your elderly parents who actually most need this advice.

Today we’re going to about what are called “pay on death designations” or “transfer on death designations,” sometimes called “beneficiary designations” also. You might typically think of these in the context of life insurance policies.

That’s what people most think about. If I have a life insurance policy, I get to name somebody. When I die the money goes to little Jimmy or little Sally or whoever you want it to go to.

You can do these same type of beneficiary designations on a host of other type of assets, and not just life insurance. For example, you could put they’re called “POD” or “TOD”, for short, you can put POD designations on your personal bank accounts.

You could put a POD designation on a vehicle title. You can put them on stock certificates. In fact in Nevada and some other states, not all states, but Nevada in particular, allows you to do a form of a deed called a “beneficiary deed” or “transfer on death deed” for your house.

What the effect of these are POD or TOD designations is, is that when you die the ownership of that asset transfers automatically simply by virtue of your death to the person you designated. Let’s think about the house.

 

Potential Problems with ‘Pay on Death’ Provisions with Real Property

If you’ve done a beneficiary deed for your house, and you say, “When I die,” basically in this deed, “When I die this house shall be transferred to Brian, Jim and John, my three sons, as joint owners. They essentially, after you pass away, they go down to the County Recorder, take your death certificate with a form of an affidavit and say, “Hey, dad’s died and now we own the house.”

That’s essentially in layman’s terms how that would work. That transfers the title automatically to them. They’re then the current owners. It’s quick, it’s easy and it gets those assets transferred really quickly.

Now, we want to contrast that to what happens if you don’t use these type of designations. Typically these type of assets would go through probate, which is something that we do here at Clear Counsel Law Group quite a bit.pay on death, nevada, las vegas, probate

Probate’s a core process that oversees the transfer of those assets to whomever they’re supposed to go to. Whether they go to your closest next of kin or whether you’ve done a will that says you want them to go somewhere. Probate can be expensive in the attorneys’ fees that are paid.

In Nevada, typically, and of course it depends a lot of factors, but attorneys’ fees are going to be somewhere between five to ten to fifteen thousand dollar or more to get that estate through probate. A lot of people are concerned about that cost and that’s why they look for these other vehicles to … or ways to transfer assets without incurring that cost after they pass away.

Again, it’s a quick and easy way to do it. However, I want also point out some important pitfalls and reasons why you might not want to do that. That’s really the main reason why we’re talking about these today.

Let’s think about this. Let’s think about, again, that house. You’ve got Brian, Jim and John, your three sons, and you want to make it easy for them to get your assets after you pas
s away. After you pass away, and if you make Brian, Jim and John the co-owners of the house, that is in almost every situation I’ve ever seen becomes a disaster scenario for those three sons.

Suppose Brian no longer wants to pay for his share of the house mortgage, or Jim says, “I’m not going to pay for the property taxes. I don’t got that kind of money to do that.” John says, “Well, I want to rent the house out and I want to get some rental income.” The other two are like, “Well, I don’t want to be landlords for some period of time.”

It’s a disaster waiting to happen because all three of them essentially have to agree on how they’re going to hold the property, how they’re going to use the property, who’s going to pay the expenses, when are we going to sell, how much are we going to sell for.

It’s a very, very difficult situation to put people in to be able to be on same page with that.

 

Potential Issues with ‘Pay on Death’ Provisions with Bank Accounts

Now, with financial accounts it’s not as big of a concern. If you have, again, let’s say your savings account has got fifty thousand dollars in it, and you go into the bank and you designate Brian, Jim and John as the pay on death beneficiaries of the savings account it is really easy for them because the bank is just going to cut three checks in equal amounts to the three of them.

We’re not going to have problems with co-ownership. Let’s think about a couple of things that could go wrong with that situation.

Let’s say John is actually sixteen years old when you pass away. He’s a minor child. The bank is not going to give him that money.

If you have a minor child, and even if it’s life insurance, if it’s a bank account, if it’s any asset those assets will not be transferred to that child unless somebody sets up a court appointed guardianship for that person.

You’re throwing them into a guardianship proceedings in order for that person to get access to the account or benefit from the account. Even if that happens, when John turns eighteen in a couple years he’s going to get all that money straight out, straight into his hands at eighteen years old.

There’s not very many eighteen year olds that can handle a substantial amount of money very well. That’s something you’d probably want to avoid.

Other problems that could come up; let’s Jim, he’s an adult, however Jim’s receiving government benefits. I had this situation just last week actually with somebody whose father has passed away.

We’re not into taking care of his estate, and one of the children was receiving a government benefit. If he receives a large inheritance, he’s going to lose that government benefit for a period of time, and becomes ineligible for that. It kicks him off of the government benefit because he’s received a large inheritance.

That would happen if a person is designated as the pay on death beneficiary of a bank account. They receive twenty thousand dollars, the Government’s going to want to know about that, and he’s probably going to lose a benefit that is conditioned upon his level of income and assets and things like that.

These are considerations you really have to think about. Sorry, one more consideration. Let’s say you designated Brian, Jim and John five years ago, and two years ago Brian died. Brian has children. You love those grandchildren very much, and you’d otherwise want to take care of them.

Guess what, when you pass away, and you have forgotten to go and update that, so when you pass away the only surviving beneficiaries are Jim and John. That bank account is going to go fifty percent to Jim, fifty percent to John, and zero percent to Brian’s kids who are your grandkids that you love.

They get nothing.

You effectively have disinherited that line of your family. Also, an unintended consequence that happens frequently with these pay on death beneficiary designations.

There are a lot of good things about these pay on death designations. They do make it easy to transfer the assets. They’re very inexpensive because there should be no need for an attorney to be involved at all. There’s going to be no court costs to transfer them.

However, there’s all kinds of pitfalls to using these in certain situations.

If you’re thinking about using a pay on death beneficiary designation on your bank account, on your car title, on your house deed, you’re still well worth talking to an estate attorney who can advise you about the benefits of using a trust, benefits of doing a will, benefits of doing the pay on death designations, which a good estate planning attorney will go through that and say, “Yeah, you know what, that will work for you the pay on death designation. That makes sense in this situation. Why don’t you go ahead and do that.”

They’re not always going to have to try to sell you on the trust or the will or anything like that if you get a good one.

Sit down with a good estate planning attorney, somebody that you trust to give you the best advice to go through your situation with all your kids or whoever you want to benefit.

Are they minors? Will they be able to handle co-ownership after you die? Are they receiving benefits that would be affected by this?

Those are all considerations that you should take into account when deciding whether to use a pay on death beneficiary designation.

I hope this has been helpful for you. If you have any more questions about pay on death designations certainly give us a call here at Clear Counsel Law Group.

We’d be very glad to answer your questions, to give you a free consultation about your estate planning situation, to give you the advice about what tools you should use or not use.

If you end up doing some planning with us then we’ll charge you for that, but the consultation is free.

Give us a call here at Clear Counsel Law Group.

Take care.

 

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