Trust Matters SEPTEMBER 2021
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A Surprising Truth About Revocable Living Trusts What They Do and Don’t Protect You From
Recently, I met with a wealthy client who had worked incredibly hard to build their wealth. They asked me a far too common question, one that always makes me anxious. “If we were to ever get sued, or if something were to happen where we were liable for payment, our revocable living trust would protect our assets, right?” they asked. I gritted my teeth. This is a tough question to answer because, inevitably, I’m going to let them down. They will feel swindled by the attorney from another firm who originally told them that a revocable living trust would do that, and they will fear what could happen now that they know this trust doesn’t protect their assets. Because the answer is, no, a revocable living trust does not protect you from liability. For the past 15 years, I have heard stories from clients about attorneys who told them otherwise. They had estate plans drafted by other law firms that told them to place certain assets in this type of trust because it could protect them from liability. They were confident in that decision and trusted the expertise of the person they were paying for legal service.
accessed by creditors, too. Anyone coming after you for bills, unpaid fees, or any other reason you may be liable for payment can access your money in the same manner you can. A revocable living trust isn’t going to protect you from that. It’s important to remember that a revocable living trust is a good thing to have! As mentioned, it can help your family after you pass, and it’s a useful way of storing and guarding your assets. However, if you are reading this article and are either a real estate investor or have more than $1 million in wealth, investments, and savings, you
The sad part is that it’s not true.
Now, as an expert in law, I know there are instances when explanations are lost on clients. The law can be complicated, so it’s entirely possible that attorneys aren’t outright lying to their clients or providing them with false information. Sometimes, people hear what they want to hear. But in the case I mentioned above, these clients were coming to us from a very sharp, very well-respected firm. Their wealth should have never been protected in this way because it was never protected in the manner in which these clients wanted their assets guarded. Here’s the truth about this type of trust: A revocable living trust can protect you — from probate. That’s the biggest benefit of this form of trust; it limits how much time your estate has to spend in the distribution process, protecting your loved ones from a drawn-out and expensive process.
should add other tools beyond this type of trust to your estate plan to protect yourself from liability. If this sounds like you, call us today, and we can schedule an appointment. We can help you find peace of mind in your plan once again.
However, as a general rule of thumb, anything you have access to and can do with your money — like a revocable living trust — can be
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Remember the ‘McDonald’s Hot Coffee’ Lawsuit? It Was Justified All Along
about the dangers their hot coffee represented, with over 700 recorded burns and several lawsuits. But in 1992, their policy was to store coffee at 180–190 degrees F, which is almost the boiling point! Furthermore, McDonald’s higher-ups testified on the stand that no matter what happened, they had no intention of changing their behavior. Unsurprisingly, at the end of the trial, McDonald’s was hit with a $2.9 million penalty.
Back in 1992, an elderly woman named Stella Liebeck sued McDonald’s in what became known as the infamous “hot coffee lawsuit.” The public relations team at McDonald’s has made sure the case is remembered as frivolous, but, like the third-degree burns Stella Liebeck suffered from a cup of McDonald’s coffee, her lawsuit was dead serious. The facts were simple: Mrs. Liebeck used the drive-thru with her grandson, who was at the wheel. Once the car stopped moving, she placed the cup of coffee she’d just ordered between her legs and tried to add some creamer. The cup tipped over, dumping the contents into her lap, causing third-degree burns over 16% of her body. She required hospitalization for eight days. Whirlpool debridement of the burns and skin grafts followed. She was at least partially disabled for more than two years, and that’s to say nothing of her pain and suffering. For all of this damage, Mrs. Liebeck asked McDonald’s for $20,000 — arguably not even enough to pay her hospital bills. When McDonald’s refused to pay more than $800, the case went to court, and it came out that they’d known for at least 10 years
Although the penalty was later reduced, McDonald’s still dragged Mrs. Liebeck’s name through the mud in the press, with their version of the story being the one that stuck in the public consciousness. But it wouldn’t change the fact that they had to pay her around $700,000 at the end of the day — or that their coffee is now being served at a reasonable temperature.
Here Comes the Sun! The Pros and Cons of Home Solar Panels
replacing. Switching to solar also increases the independence of the whole U.S. electricity grid, and covering your roof with panels can boost the value of your home by as much as $15,000.
Solar power has been all over the news, and odds are good that at least one door-to-door salesperson came knocking this summer to sing their praises. Celebrities like Tom Hanks, Brad Pitt, and Pierce Brosnan have invested in solar or installed it on their homes to convert to green energy — but is following in their famous footsteps the right move for your family?
The Cons No One Talks About
The biggest downside of solar is that it simply doesn’t work for every home. If your roof is consistently shaded by trees or poorly oriented for panels, or you live in a rainy climate, your panels might only generate 10%–25% of their energy potential. If you have the space, ground-installed solar panels may work to avoid some of these issues, but they won’t solve weather problems. Solar can also be expensive. Installing it will cost you $15,000– $20,000 on average. For some homeowners, this investment is offset by lower long-term electricity costs, but it might not be affordable for you or make sense if your electricity bill is already low.
The Pros of Powering Up
The biggest selling point for solar panels is that they’re a quick, easy source of green energy. They can reduce or replace fossil fuels in your home, decrease your family’s carbon footprint, and help fight climate change. They’re also a proven technology dating back to 1954, and individual panels can last 25–30 years before they need
If you want to dip your toes into the world of solar but can’t afford to power your whole home, you can start small with solar lights for your yard, a solar oven, or a solar-powered water heater. You can even explore wind power! Small wind energy systems cost under $500 on Amazon.com or at Home Depot and can lower your electricity bill by 50%–90%.
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TAKE A BREAK
WANT TO TRY MINIMALISM?
7 RESOURCES TO HELP YOU GET STARTED
Before they separated, Kim Kardashian and Kanye West owned one of the most extreme minimalist homes in Hollywood. One bright white room held nothing but a massive plush “sculpture” by Isabel Rower. In Architectural Digest’s photos, it looks like a giant octopus made out of pillows, and the six Kardashian-Wests climbing around on it appear straight out of a sci-fi novel. The Kardashian-West’s extreme minimalism is a symptom of a larger aesthetic trend that caught fire during the pandemic when people stuck in their homes realized they’d prefer to spend time in calm, clutter-free spaces with neutral colors and clean lines. If minimalism has intrigued you and you want to learn more about the decor trend and lifestyle, here are a few places to get started.
• “The Minimalist Home: A Room-by-Room Guide to a Decluttered, Refocused Life” by Joshua Becker — This book will take you through the process of simplifying and decluttering your home (and life!) room by room. • “Minimalism for Families: Practical Minimalist Living Strategies to Simplify Your Home and Life” by Zoë Kim — This light read teaches the benefits of minimalism and explains how to get the whole family on board.
ONE-PAN APPLE CIDER CHICKEN
• “Minimalism: A Documentary About the Important Things” and “The Minimalists: Less Is Now” on Netflix — “Minimalism” and its follow-up explore the minimalist journeys of two people who discovered minimalism as adults and now share its lessons with others. • “Thrive With Less” on Vimeo — This one-hour documentary follows six students who undertake the challenges of minimalism to find satisfaction in their lives. (Vimeo.com/ThriveWithLess)
Inspired by WellPlated.com
• 4 tsp olive oil, divided • 3 sweet apples, cut into 1/2-inch slices • 2 tsp fresh rosemary, chopped, plus more for garnish
• 1 1/2 lbs boneless, skinless chicken thighs • 1 tsp salt, divided • 1/2 tsp black pepper, divided
• 1/2 cup apple cider • 2 tsp Dijon mustard
and cover with foil. Wipe the skillet clean.
1. Sprinkle chicken with 1/2 tsp salt and 1/4 tsp pepper. Set aside. 2. In a small bowl, combine apple cider and mustard. Set aside. 3. In a large skillet over medium heat, warm 2 tsp olive oil.
• CKSPACE — If you want to learn more about celebrity minimalism, digital minimalism, or decluttering, this channel has you covered with its beautifully filmed videos. • A Small Wardrobe — This channel, run by a former Australian art teacher, is geared toward women and offers minimalist home, wardrobe, and lifestyle advice. • Matt D’Avella — Matt D’Avella’s famous video “A Day in the Life of a Minimalist” has more than 17 million views on YouTube. On his “Minimalism” playlist, you’ll find minimalist home and habit videos, along with mindset and productivity tips.
4. Heat the remaining oil in
the skillet, then add sliced apples, remaining salt and pepper, and rosemary. Cook for 5 minutes.
5. Return the chicken to the
When shimmering, add chicken thighs top-side
skillet and add apple cider- mustard mixture. Cook for 5 minutes, then serve sprinkled with rosemary!
down. Cook for 4 minutes, then flip and cook for 4 more minutes. Transfer to a plate
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INSIDE THIS ISSUE
A Surprising Reality About Revocable Living Trusts
How McDonald’s Spun the ‘Hot Coffee Lawsuit’ The Pros and Cons of Home Solar Panels
One-Pan Apple Cider Chicken 7 Ways to Learn All About Minimalism
‘Hey, I Wrote That!’
These licensing arrangements are similar to recorded music in that each artist gets the same fee-per-song payouts no matter who they are — but that fee could be higher or lower depending on the agency in question. Some artists have made lucrative careers from their work as songwriters. You might be thinking of someone like Bob Dylan, who is covered a lot by a lot of different people. But the artist who really maximized his songwriting is Ike Turner — bluesman and R&B legend who also appended his name to so many songs over the years that some question his role in their creation. His wife (and then ex-wife), Tina Turner, performed his songs most famously, but a variety of artists have covered Ike Turner’s songs. As late as the mid-’90s, Ike earned hundreds of thousands of dollars from cover credits and samples of his music. Before the age of digital distribution, the system outlined above kept the business of covering songs — and collecting royalties from the songs performed by others — relatively simple. Now, with the proliferation of new musicians and ways to distribute their music online, that’s not the case. It’s not hard to see the challenge here, but a solution remains a bit vaguer, at least one that doesn’t infringe on people’s First and Fourth Amendment rights. Still, artists can take steps like setting up “trending search” alerts and relax knowing that if someone makes enough money off their songwriting to be worth the trouble, they’ll likely hear about it. And a cover song always drives interest in the original, too — never a bad thing for anyone!
‘Hey, I Wrote That!’ The Law Behind Song Covers
You might think there’s no way to get rich off a cover song — or if you do, it’s because you’re a famous musician with good attorneys. But neither is the case, and you’d be surprised to hear that patent law approaches cover songs pretty much like it approaches any song — with a flat fee for the songwriter, which in this case is about 10 cents for every copy you sell. The same is not true for live music, however — in that case, you’ve got to deal with the tangled world of licensing and other concerns. In fact, a live venue may ask that you not play any covers at all. In the words of Marvin Gaye, “What’s going on?” Here’s what’s going on: That venue hasn’t paid the right fees for the right licensing, and that means they can be fined for basically trying to cheat an artist or songwriter out of their cut. The good news, though, is that there’s no fee to play cover songs when the venue has the right licensing — and no way to play them if it doesn’t!
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