Dear Clients and Friends,
In the office this month.
Most people who are in the stock market own stocks in mutual funds or own individual stocks that are a book entry in an account with a stock broker. In these cases, it is easy to add a joint owner to the account or to name a beneficiary to the account. However, it is not uncommon for a client to have paper stock certificates that they have had for years. These can be a big problem.
Corporations generally do not manage their own stocks. They use a transfer company. The biggest is Computershare. These transfer companies have very stringent rules. Their forms and procedures must be followed exactly. Signatures cannot be notarized. Signatures must be stamped with a “Medallion Signature Guarantee” which you can only get from a bank. Most banks will only do this for their own customers. This is a complicated process if you are attempting to add a joint owner to a stock certificate you own or to sell it.
This process is much more complicated when the owner of the stock is deceased. When the owner is deceased, the transfer companies often require the forms be signed by the court appointed Personal Representative. That calls for a $199 filing fee plus more than $500 in attorney fees to prepare the petitions to open a probate file.
These kinds of costs can quickly become more than the value of the stock.
One client whose sister died found one share of 21st Century stock and two shares of a different stock. The total value was only $32. Another client found shares of stocks worth $128. There is no economically viable course of action to transfer ownership from the deceased person and sell the stock.
The lesson learned is to find and deal with these paper stocks before the owner dies. Dealing with them after death is expensive.
FYI, I have learned over the years that people who retired from Ford or GM often received shares of stock from their employer for affiliated companies. For example, Ford retirees may have shares of The Associates. GM retirees may have shares of Delphi. Also, insurance companies in the past issued shares to policy holders. If your parents have a Prudential or Met Life policy, they may have stock certificates for those companies. Find out and deal with these shares before the owner dies.
Powers of Attorney
If you attended any of my seminars, you may have heard me talk about the importance of powers of attorney. One type of power of attorney is for financial matters and the other type is for medical decisions.
I think these two documents are your most important estate planning documents. They directly affect your life because they determine who will make decisions for you when you are not able to. The other estate planning documents are generally about what happens to your money after you die.
This month I received a call from a long-time client who asked me to help his daughter. The daughter called with a very sad story. Her husband, in his early 50’s, contracted covid at his work. His condition required that he go to the hospital. There, he also contracted pneumonia. The two diseases destroyed his lungs. He has been placed in an induced coma pending a double lung transplant. He is now in his second month of the coma.
His wife has access to only one bank account that she is joint on. She cannot access other assets because they are in the husband’s name only and she does not have a financial power of attorney. No one should have to deal with these legal problems on top of their medical problems.
The lesson here is if you do not have powers of attorney, then contact your favorite estate planning/elder law attorney to get some 😊 Also, if your children do not have powers of attorney, encourage them to call me to get some. Just because they are younger, it doesn’t mean they won’t need them.
Michigan law says the age of majority is age 18. Legally, “parenting” ends when a child turns 18 to the extent they are now protected by privacy laws. Their doctors will not tell you about an illness or treatment. Their college will not tell you about their grades. Their bank or credit card company will not tell you their balances or expenses. The only way to continue your role as a helping parent is for your 18 – 20 something to sign a power of attorney naming you as their agent/advocate.
A few winters back, each of my daughter’s (in their 20’s) fell on ice and would up in emergency rooms in Toledo and East Lansing. Telephone calls to the emergency rooms provided no more information other than acknowledging that they were there. When I showed up with the power of attorney for medical, I was able to help them.
Hearing and seeing my story unfold, Melissa, in my office, decided to draft powers of attorney for her children as an “18th birthday present”. “Happy birthday, sign here, and I will be able to still help you if something comes up.” She has scanned them into the system, and then sent it to her email so she is able to instantly send it to a bank or doctor office from her cell phone when necessary. Her children are in college and she has had to use them several times already (for paying bills).
More and more parents are starting to understand the importance of powers of attorney for high school seniors turning 18. We have seen an increase in these documents already this month.
The lesson here is that even “seniors” at 18 need powers of attorney. Share this with your children, grandchildren, neighbors.
I am in the process of opening an estate for a woman who recently passed away in a memory care facility. She was not my client before she died so I am attempting to gather all her legal documents from her family members. I think I have everything including her trust, five amendments and a will. The only problem is that nothing is original. Copies of trust documents are not a problem; however, a copy of a lost will may not be accepted by the probate judge.
There will have to be a hearing with notice to all heirs so they can show up and object to admission of a will “copy”. I will have to show that the will could be admitted if it was the original will and fend off any objections of some relatives who were not treated equally in the will. Their argument will likely be that the reason the original will is missing is that it was destroyed by the decedent and therefore should not be admitted.
Lesson to learn here is to know where your estate plan is, including the original copy of your will. Some attorneys keep the original. In recent years, most attorneys no longer keep the original. You should keep the original will in a safe place or give it to your named personal representatives. Make sure you do not give it to someone who would prosper from it if it were lost.
Seminars For May and June
Our seminars remain in a state of flux due to the variance in the rules of the senior centers regarding social distancing. Please check our website for the latest information: https://gfalawfirm.com/events/.
A Word about Newsletters
I enjoy writing this monthly newsletter/email/blog. It can be a little nerve racking because communication can be difficult at times. Here are sample efforts that failed taken from Church bulletins:
Scouts are saving aluminum cans, bottles and other items to be recycled. Proceeds will be used to cripple children.
Ladies, don’t forget the rummage sale. It’s a chance to get rid of those things not worth keeping around the house. Bring your husbands.
For those of you who have children and don’t know it, we have a nursery downstairs.
Feel free to share this newsletter.
Very truly yours,