CJ Follini: Here we are with Meredith. We’re with Meredith Maller, an estate planning expert and attorney at Bernstein out of Boston and Portland Maine. Meredith, thank you for being with us today to provide your subject matter expertise in this interview.
Meredith Maller: Thank you CJ, it’s great to be with you. Great sound now we got our technical difficulties taken care of.
CJ Follini: This edition we’re calling it part two beneficiaries trustees and executives, however I think it’s part four – we got lost somewhere in our estate planning series. So without further ado, first question, general barn burner: why is estate planning so misunderstood and why is it so important?
Meredith Maller: I think it’s misunderstood because there’s a lot of gatekeeping around it. It’s sort of these really bloated documents with a lot of shalls and shoulds, and people, particularly your audience, are used to experiencing it from their grandparents or parents in a way that’s overly complicated. It doesn’t necessarily have to be that way. I think the reason it’s so vital is that the law, if you pass away without a will, which we call dying intestate, defaults to beneficiaries and distributions you wouldn’t necessarily want. Particularly for someone who is unmarried and has children, if you were to pass away it would benefit your parents rather than perhaps your partner. So after you work so hard to build wealth, you can sort of see that disappear as part of that process.
CJ Follini: A lot of times people, your clients don’t even know you did a great job until something goes bad.
Meredith Maller: The fact that nothing happens, that’s good, but you don’t really get that thank you. There’s a reason we have the highest liability insurance, and it’s because it can be decades down the line. Knock on wood I’ve never had an issue, but it’s also when things go well I also don’t hear from them because it has been so smooth. That is another reason why estate planning is so crucial – in a time of terrific grief, it’s somewhat of a relief to have things be spelled out and be very clear even if really simple.
CJ Follini: Given that you have a near perfect record, knock on wood, can you share an example of a situation with a family that saved significant legal and financial challenges?
Meredith Maller: I teach a lot of trust and estates, and I like rock and roll so these were not clients but I think this is a great example. I’m going to give you a bad and a good. Jim Morrison of The Doors has a simple will, passes away at 27, leaves everything to his girlfriend Pamela – so we’re talking copyright, publishing, image, everything like that. Leaves it to his girlfriend Pamela Corson. Two years later Pamela passes away. Pamela has no will, so the publishing, copyright, image, everything goes to the Corson family. At that point Jim Morrison’s family sues and now they’re still splitting 50/50 – the royalties from the Doors go 50/50 to the Corson and the Morrison family.
CJ Follini: The Corsons now own Tampa Bay?
Meredith Maller: I would assume so. They own a lot of stuff at this point. Now I have a good example. How did you like The Catcher in the Rye movie?
CJ Follini: I’m not sure it was for me, but I love the book.
Meredith Maller: That’s a good question – there was never one, and that is good estate planning. JD Salinger never allowed it, and so when he passed away, his literary agent – the rights to Catcher in the Rye are in a trust and no one knows who the trustees are, and there’s never been a Catcher in the Rye movie. That is very good estate planning. That kind of legacy is when you have a really seamless transition. Anytime you have an estate like Michael Jackson or Prince or even Aretha Franklin, someone who passed away with what’s called a holographic will – a handwritten will – she had maybe half a dozen that were found behind couch cushions. It ties up estates – it took forever to make a biopic about her. That is really sort of the worst case scenario. When you hear about it, it’s gone poorly, and when it goes well it is incredibly sad but a private sort of efficient transfer of wealth. I have a four-year-old, but the saddest way to put him through college is on the back of probate litigation and someone who passes away without a will.
CJ Follini: That lends into that example of JD Salinger’s executive – would that be his executive that’s in trust?
Meredith Maller: We actually don’t know who the trustees are. They did such a good job. It’s his literary agent who came out and said there will never be a movie, and the agent is not the trustee. We don’t even know who the trustees are so no one is knocking at their doors. The urban legend is Michael Eisner wants to make a Catcher in the Rye with German Shepherds.
CJ Follini: So I was using that as a springboard to say what qualities should someone look for in an executive or a trustee?
Meredith Maller: That’s a great question, and those are really two different roles. Let’s explain that right now. An executive is someone or a personal representative depending on the state you’re in. They’re the person when you pass away ensures that your assets make it to the right place. They would be signing an agreement with a real estate agent to sell your home, if there was a painting, making sure your funeral expenses get paid, they sign your final tax return. It is a really short-term post and a lot of times firms like mine are hired to do everything. We can be the ones to sign if they delegate it.
Someone who’s pretty organized because from the moment of passing, you’re asking them to collect all of somebody’s mail, to ensure that their vehicles are retitled. I sort of live for these anecdotes, but a guy’s ex-wife burned down his house the day after he died. Because the home hadn’t been titled in the name of the estate, there was absolutely no insurance proceeds. That’s something where you need a personal representative who has their finger on the beat of stuff like that. Their job ends and it’s about a year if they have to go through full probate.
A trustee however is someone who is sort of hard to explain other than think of them as a special purpose bank account – a bank account that says money can be spent for health, education, maintenance and support, which is lawyers speak for everything and nothing. This is the person who writes the checks from the bank account and says what qualifies and what doesn’t qualify. In the case of someone like me who has a four-year-old, I’d be looking at a trustee that could be serving through preschool, the dinosaur obsession as we move into matchbox cars and then real big cars.
CJ Follini: As a father of boys, you know then the cars become bigger and more expensive, and you go into college and stuff like that. So it could be quite a long time.
Meredith Maller: I’m sort of thinking about two jobs. The first is – and I don’t want to wander into your world – is a trust making money? This is an investment account, a banking account is kind of a poor way to describe it, but an investment account. And do they know my values and what I want for my son well enough that when they write those checks they have confidence?
CJ Follini: The trustee is basically the CEO?
Meredith Maller: That’s exactly right. That’s a great analogy.
CJ Follini: By the way, I guess I should have disclosed the fact that Meredith is actually my estate planning journey, and I’m going through this right now at my age, 57, two sons four and two years old, and I’m trying to figure out who I can trust. Luckily I have some dear friends who are very trustworthy, very smart and all CEOs, so I think I’m in good shape. In fact, my sons will probably be in better shape with them than with me, but they got me so they’re going to have to live with that.
Meredith Maller: I think my son has chosen T-Rex or Indiana Jones to be his guardian at this point. I’m trying to see if Indiana Jones can be trustee.
CJ Follini: Speaking of those, another segue moment – beneficiaries. Updating beneficiaries seems to be a recurring theme. I mean, we talk about it for my plan now that I have beneficiaries or at least children. What should prompt that beneficiary update? What life events? What do you see as the things that trigger a review of beneficiaries?
Meredith Maller: This is an amazing question because this is a thing that everybody gets wrong. They don’t pay enough attention to beneficiaries, may it be in a will, an IRA, a transfer on death account, anything like that, or even like your digital custodian. They’re not revisited enough and in some states even if you get legally divorced, an ex-spouse can still benefit if they’re still listed as a beneficiary.
I actually have a really nice sort of mnemonic – I call it the five D’s which is diagnosis, divorce, death (and it could be death of a partner, death of a parent, death of a grandparent, death of a child), departure meaning if you move to another state, if you get property in another state, and then decade. I think decade is a bit long – like a decade is when you should call your attorney to check in because it’s really sort of an iterative process. But I like to say duo meaning every couple years just kind of take a look and go is this still what I want.
CJ Follini: How often do people check in on their estate plan?
Meredith Maller: Well, you CJ, I’m gonna see quarterly.
CJ Follini: Exactly, no too often.
Meredith Maller: It depends on it really is those events. Like people have big years where things will sort of stabilize where you have minor children and then the kids hit 18 and things change and then they sort of go out in the world. Under death we’re talking about also like liquidation events, may it be an inheritance or you’re exiting a company or you’re starting a company. Part of my intro, I do a lot of business succession planning with startups from the day they start. I’m there in the room talking about what does your LLC say and do you have a proxy, what happens if you’re incapacitated, let’s get that stuff in place. It could be all these different versions of that – you’re leaving one job and heading to another job. People sort of don’t necessarily think they have wealth right now but what are your rights under the LLC agreement if you’re in a startup or an offering agreement to leave those interests to a partner or a child.
CJ Follini: What are the common mistakes? I’m thinking about that one for a second. I don’t think as you were speaking, I don’t think our LLCs and all of our funds have a proxy in terms of what if I’m incapacitated. Frankly, I think I’m living forever so I’m not sure it’s really needed. In fact, I think this whole conversation is moot in my case because I am Moses.
Meredith Maller: I’m going to live forever and I genuinely hope that’s the case. I say to people like may your last check bounce. Most of the stuff you don’t need, it’s like an insurance policy, but I’ve seen when you talk about a worst-case scenario, it’s something like you and a partner have a going business whether or not it’s profitable or not. One person becomes incapacitated or passes away and the surviving partner unwittingly is now in business with somebody’s 20-year-old kid or a spouse who’s like “I’m going to pull money out of the business.” Or because they don’t have a will, it’s locked up in probate for six to 12 months and there’s literally nobody who can speak on behalf of the deceased partner.
Those documents in some ways that I find the most impactful are the cheapest and easiest to do – a power of attorney, a proxy, a healthcare directive, and a living will. Because things can be slowed down so much and particularly when there’s not clarity. It’s really easy to plan for married couples who have one kid and the same is true for LGBTQ+ couples. If you’re married with one kid, really clear. Things are a lot more difficult when you’re building wealth and you’re younger and it doesn’t feel like you can afford documents – you’re also at the most at risk.
For your living will or healthcare directive, your partner, your best friend, whomever in your life might be the best person to decide what you want to occur if you’re in a persistent vegetative state, but instead under the law if you don’t identify someone, you’re going to have your parents step in.
CJ Follini: And maybe they’re dead.
Meredith Maller: Exactly, and they’re not going to be answering any situation. At that point, you are sitting in a hospital and the hospital is going to their legal board and then they’re going to the courts and they’re trying to find someone to get appointed. Again, those are things that are really quick easy documents to do that will smooth things over and help in a situation when time is of the essence because when you need those, you need that quickly.
CJ Follini: Many young adults, younger definitely younger than me, think estate planning – as I talk to them and giving classes and talking to University students all over the country – they think it’s not for them. They say “I have 30 years to worry about that” and I keep saying “oh no you don’t” and it’s not getting through. How do you address this misconception? Because you’re the expert, they – I’m just maybe a peer or an older peer who is telling them what to do like “okay Boomer.” By the way everyone here, I’m not a Boomer so they just say that because it does hurt my feelings. How do you address the misconception that estate planning is not for the young?
Meredith Maller: That’s a great question. Besides, I’m a bajillion year old 40. It’s really hard because it is a luxury product and I absolutely appreciate that when you’re looking at a budget that it’s hard to justify it. What I will say is that I sort of lay out the worst examples of do you want the law to take over.
Here’s a great thing that I’ve had to address even this past Friday – we’ve been thinking a lot about is my firm Bernstein, we have a family formation practice. It’s not a family law practice, it’s family formation which is IVF, gender confirmation, adoption, sperm donor contracts, stuff like that. What comes with that is you’re having a baby thinking “I need estate planning” and because of the recent election we’ve seen this enormous influx of individuals going “oh my gosh the law is going to change.”
So we’re looking for a way to make it affordable and efficient and rather than in the past there’s sort of bloated documents, we’ve been able to strip them down. My documents have no gender in them – it’s parent, it’s partner, stuff like that where you can have things be a lot more straightforward. Also there’s a lot more technical savvy. The things that drove up cost in the past were our ability to collaborate on a site, an external site. I may be born in the 80-something, but I do still know how to do like a SharePoint collaborative site. We learned through COVID that we can do a zoom, people don’t need to come into the office, and I can have questionnaires that are really a lot more – I don’t want to say plug and play but I can do almost set pricing at this point for this influx. It’s about creativity and I don’t think there’s any need to gate keep it.
CJ Follini: I’m sure you lose a lot of the younger audience as soon as you say persistent vegetative state. I’m out, I don’t want to hear about vegetation, I don’t want to hear about being a vegetable.
Meredith Maller: Or yanking the plug. That’s something like approaching that document is one way where I don’t even have people do it like sitting in the lawyer’s office and telling me what do you want to happen for your funeral. I say go home, have a glass of wine, beer, tea, whatever your poison is and just talk about it and then come back to me.
CJ Follini: I was going to ask you how you feel about the online services but we’ll leave that to another time.
Meredith Maller: I can absolutely speak to that. I think for certain documents, they’re incredibly great, and I think that I would be foolish not to integrate some of it into my practice because it can make it more affordable, it can make it more efficient. However, online drafting programs they’re so over-lawyered that I find the documents tend to be about 100 pages while I can bring mine down to 10. I still need to have a conversation with you, and so I can say like yes perhaps there are really straightforward documents, but there are ones that we should have a conversation about. It doesn’t have to be at whatever hundreds of dollars an hour of my office – let’s do a zoom, let’s do what makes sense and get you out the door with that.
CJ Follini: Simple is still possible. I mean bring back Jim Morrison example – he wrote what, write it on one piece of paper and the Corsons are now billionaires.
Meredith Maller: Right, so it’s sort of like even if you do some great planning you got to think about the next generation. I think that is the intersection I’m thinking a lot about. Again it is because I’m not asking clients to fill out handwritten questionnaires, they’re going online, they’re filling it up, they’re uploading, we’re able to provide that type of security.
CJ Follini: Actually I love that we had about one hour conversation which for me was much better than a cut and dried questionnaire fill out that doesn’t really give the context and the color of life because estate planning is – you’re doing a memoir basically. You’re dictating a memoir to an attorney who is going to draft from that memoir, so filling out a questionnaire is not what anyone wants to do. Last question – what’s step one? What is very – I mean other than go see Meredith, what is step one?
Meredith Maller: Step one is the why, and it is that why does it matter to you to protect your legacy and what you want. I have 99-year-olds, I have 19-year-olds, I have 57-year-olds, and I have 42-year-olds. Often my first question I ask when anybody comes to my office is “why estate planning now?” and it’s generally a horror story, a diagnosis, something like that. Engagement in the process and having that conversation – we talked about as an hour about learning about your values. That’s where the legal leads come in. When you talk about what is important to you, what are your values, if God forbid something were to happen to you, that your children can carry on the things that helped you build your business, helped your family build your business. That is what I can help you do. It’s like the why, and when you come in with the why, you come in with that questionnaire filled out and we will zoom right through and make it efficient. If I’m dragging you through the process and you don’t want to be there, I get it, but if it’s collaborative, that’s always the thing. It’s also right fit. When you get to why you want to do it and you find an attorney, don’t be afraid to fire an attorney. I don’t actually start billing until after the first meeting because I say this is about us working together and it’s about us finding the right fit, and if you don’t feel comfortable with me that’s okay, I’m not offended, I’m not going to charge you.
CJ Follini: Step one find your why. For me again, transparent, was legacy and love. I love my family, I want to help, I want their future to be as good as great as my present. And legacy – well I don’t want to be forgotten, I’m very egotistical that way. I don’t want to be blowing in the wind, come give me a plaque or something for God’s sakes. Thank you very much, this has been awesome. I think we’re going to close on identifying your why. I think that is a great first step and if anyone takes any takeaway from this, that’s it. And the fact that the Corsons are doing really well by this time. I’m sure we lost a lot of the watchers but we’re going to social media post out, we’re going to post about identifying your why. I love that takeaway as a beginning. Thank you again Meredith, especially on a Saturday taking your time.
Meredith Maller: Thanks, good to see you CJ, thank you so much.
CJ Follini: Bye everyone.
