Lawyer provides direction on estate planning, protecting assets

What to do with someone's property when they die can be a complicated task involving beneficiaries, a ton of paperwork and the court system. But it doesn't necessarily have to be.

Liz Smith, a Juneau-based lawyer specializing in estate planning, gave a presentation last Wednesday to help clear up the often confusing world of wills, asset protection and long-term health care decisions

Twelve people of various ages attended the presentation at Irene Ingle Public Library, listening as Smith gave a broad overview of planning options, then inviting attendees to ask questions.

"It's something we need to take a look at because we have that mixed family situation," said Loretta Rice, who sat in on the presentation. "It's good to know what can happen. It gives me a good direction to go."

Along with the legal ins and outs with blended families, Smith covered the differences in wills and living trusts, and when naming a conservator might be a necessary step to take.

Many times, she explained, people don't have a plan in place, so their assets end up in probate, which can take anywhere from 12 to 18 months minimum and include several costs.

"The default plan for most people is probate," Smith said. "Probate is a court process to transfer title to any assets in your name upon death to whomever is going to inherit."

Smith said the process doesn't tend to be too challenging in Alaska as it doesn't have an estate tax, though residents are subject to the federal estate tax - but that only applies to estates of more than $12 million.

Since starting her practice in 2019, Smith said she's helped - or is currently helping - 300 clients. She decided to focus on estate planning because she didn't want to work in conflict. She also wasn't comfortable with hourly billing.

"Many attorneys bill by the hour," Smith said. "I found that really frustrating. You lose control as a client. You don't know if your question is going to take them five minutes to tell you the answer or five hours. And what will be the bill at the end?"

It was also a challenge from an attorney perspective trying to get to know clients, she said. People tend to hold back when they think they're being billed by the hour.

No matter if clients are setting up a will, living trust or some other plan, Smith said the biggest problem is a lack of follow through. She used her grandparents' planning as an example of good estate planning management.

"They set up a plan and they followed through regularly," Smith said. "They met with their attorney as life changed, as their children's circumstances change, and they kept it up to date. They also brought in my aunt, who was eventually the executor, to meet with the attorney."

When her grandparents died, Smith's aunt grieved "but the administrative part was easier for her. She had already built up a relationship with that attorney, at least to know who she was dealing with and built some trust."

Smith likened estate planning to a living document, which should change as a person's life changes. Her office provides free reviews every three years to make sure everything is up to date in her clients' files.

It's a process that shouldn't be put off, but Smith has heard a variety of excuses as to why people do procrastinate. Some believe they have plenty of time, others don't know where to begin, some are afraid of tackling the topics of death or incapacity or believing they don't have an estate to plan for.

"People's sense of whether they are 'rich' or 'poor' often has little to do with how much they actually have, but some people think they do not have enough to plan for," Smith said.

Aside from what happens to someone's stuff when they die, Smith said it was important to consider what happens with a person's health care when they are unable to make those decisions for themselves. That can include long-term care. Alaska is the most expensive state for monthly costs in long-term care.

"Even if someone has done well for themselves, they're going to be out of money fairly quickly," Smith said. Making health care decisions by choosing a guardian or power of attorney before something like occurs will ensure a person still has control over what happens to them.

Smith recommends people consult an attorney for estate planning, though she said they can certainly do it themselves.

"That's what this is all about, just some basic education that you can decide what you want for your family," she said. "An attorney can't tell you want you want for your family."