BIOGRAPHY

Monty L. Donohew is an attorney concentrating his practice in estate planning, wills, trusts, succession planning, and probate, with an emphasis on strategic trust planning. His firm, Monty L. Donohew, LPA, has offices in: Green, Ohio (Akron, Canton); Beachwood, Ohio; Westlake, Ohio; Dublin, Ohio; Cincinnati, Ohio; and, Chesterfield, Missouri (St. Louis).

Monty received his Juris Doctorate from Washington University School of Law in St. Louis, Missouri, where he served on the Washington University Law Quarterly, Washington University's most prestigious law review. Monty has been admitted to practice in Ohio, Illinois and Missouri, and currently practices in Ohio and Missouri. He is a member of several local and state bar associations.

Monty graduated from Tallmadge High School in Summit County, Ohio. He received his B.A. in political science from Eastern Illinois University, where he attended on a full academic scholarship. Monty was an intercollegiate debater, and received numerous individual and team awards, including placing second at "Novice Nationals," a national tournament for freshmen debaters, and qualifying three times for the National Debate Tournament. While at Eastern Illinois, Monty was an award winner in the annual social sciences writing competition, and received a coveted appointment to the Student Legal Services Board after serving as a student legal intern.

Monty is a member of the National Academy of Elder Law Attorneys, Inc. (NAELA). He is also a member of the National Family Caregivers Association, and the National Care Planning Council.

You can learn more about Attorney Donohew, his practice, background, credentials and education at the Estate Planning Information Center, http://www.donohew.com/. You can follow his blog at http://estateplanningcenter.blogspot.com/.

Bankruptcies Hit Retirement Communities

The recession is hitting elderly people where they live, literally. Financial problems have been mounting at a number of assisted-living and continuing-care communities, forcing some facilities into bankruptcies and inflicting new worries on residents and their families who thought their life plans were comfortably set.

In recent weeks, Erickson Retirement Communities, which manages 19 continuing-care retirement communities in 11 states, declared bankruptcy. Sunrise Senior Living Inc. posted a quarterly loss of $82 million and announced plans to sell off 21 of its assisted-living communities. Nationally, smaller retirement communities are raising their prices, changing the way they operate, selling themselves off to bigger chains, or getting out of the business altogether. Many companies say they can't make a profit—or even succeed on a nonprofit basis—in an environment that combines the high cost of caring for elderly residents, restrictive Medicaid budgets, tight credit markets and fewer residents willing and able to pay top dollar for their care.

When a facility fails, it can have myriad effects on the residents. The good news is that no one gets kicked to the curb–at least not right away. "Nobody has ended up on the street, which is a primal fear when you're dealing with these places," says Jason Frank, an elder-law attorney in Baltimore. "But their fees can skyrocket, and they can become unaffordable. Then they can kick you out for nonpayment."

In some cases, residents may find that the sizeable deposits they made to get their apartments in the first place have disappeared. (Continuing-care communities like Erickson's typically charge deposits of $150,000 or more, and assure residents that they can stay on the campus for the rest of their lives regardless of how their needs change, and that the deposits will be refundable to themselves or their heirs when they leave or die. But residents typically also have to pay monthly fees for care, and those fees can continue to increase. Assisted-living facilities like Sunrise generally require no deposits but charge a monthly pay-as-you-go-plan.) That's what happened to the 170 people who lived in Covenant at South Hills in Lebanon, Pa. Their deposits went up in smoke when their facility was sold in bankruptcy to Concordia Lutheran Ministries, which did not take on that liability. Several are now suing B'nai Brith Housing, the original operator of Covenant.

Nortwestern Mutual Launches Long Term Care Calculator

With Americans living longer than ever before, having a long term perspective for individual care needs is critical.  Northwestern Mutual has launched a new Long Term Care Cost Calculator to help people better understand the financial impact of those needs.

The calculator builds on Northwestern Mutual's Cost of Care research, released earlier this year, which surveyed nearly 7,000 home health care providers, assisted living facilities and nursing homes across the U.S. and revealed stark differences in costs for long term care services in geographic locations across the country.

"It is clear that most people simply can't afford to pay for long term care by drawing on their retirement nest eggs," says Terence Holahan, Northwestern Mutual. "Planning for long term care is about protecting both your assets and your lifestyle when you are unable to care for yourself; this new calculator helps educate consumers about the potential cost of a long term care event and how it can vary by age, location and length of time the care is needed."

Happy 18th Birthday! You'll Never Guess What I'm Getting You!

What are you planning to give the teenager in your family when he or she becomes an adult? A car, money for an apartment, a trip to Europe? Those are all fine gifts, depending on what you can afford to spend. But here’s one you may not have thought of, and the benefits could be far greater. Bring your new adult (child or grandchild) to our office, introduce us and have us prepare a basic estate planning package of documents: a simple trust or will, a durable power of attorney, a medical power of attorney, a HIPAA Release and a living will.

Actually, it’s a gift for the entire family, because once the child reaches legal age, parents will no longer be able to automatically make medical and legal decisions for him or her without the appropriate legal documents authorizing them to do so. If an adult child becomes ill or injured and cannot handle his own financial affairs, no one, not even Mom or Dad, will be able to step in and conduct business (sign checks, sell assets, etc.) unless he has a trust or a durable power of attorney and has named them as his successor or agent. If he hasn’t, they will have to go through the courts.... and that will take time, cost money, and restrict them in ways you cannot imagine.

If an adult child cannot make his own medical decisions, it will be much easier for Mom, Dad or another adult to make decisions if he has a medical power of attorney that names them as his agent. And what if he is placed on life support before they can get to the hospital? Unless he has made his wishes known through a legal document, they may not be able to have life support discontinued without court approval.
Finally, if your new adult should die without a will, the court will distribute his assets according o the laws of the state in which he lived . . . regardless of what the family or he would have wanted.

Make sure your new adult understands these documents will need to be changed as life changes-as s/he accumulates more assets, and as s/he and those s/he cares about move, marry, have children, divorce, die and so on.

Helping your children or grandchildren get started with this adult responsibility at the moment when he or she becomes an adult is just one more responsibility we as parents and grandparents have. It fits right in there with how to balance a checkbook, how to manage credit, and how to buy insurance.

Chances are, it will be a long time before any of these documents will be needed, but you’ll be sending your new adult out of the newest with a full layer of protection... just in case.

Court Imposes $6.3 Million Civil Penalty on "Trust Mill" Companies and Owners

The Supreme Court of Ohio recently imposed a civil penalty of $6,387,990 against two companies and their co-owners for engaging in the unauthorized practice of law, and issued an injunction permanently barring those companies, their principals and employees from any future marketing or sale of living trusts or other estate planning documents or services to Ohio residents.


In a 7-0  decision, the Court found that American Family Prepaid Legal Corporation and Heritage Marketing and Insurance Services Inc., their co-owners, Jeffrey and Stanley Norman, and multiple employees of those firms engaged in more than 3,800 acts of unauthorized law practice by virtue of their participation in a “trust mill” operation from March 2003 through March 2005.


The Court noted that American Family, Heritage, the Normans, and employees of the two companies had been the subject of a prior unauthorized practice of law complaint and investigation by the Columbus Bar Association (CBA) in 2002 that was resolved by the signing of a March 2003 consent agreement. In that agreement, the respondents acknowledged that providing estate planning advice and marketing and preparing trust agreements and other estate planning documents constitutes the practice of law, and promised to permanently cease and desist from such activities in Ohio.

The Court agreed with findings by its Board on the Unauthorized Practice of Law that, after signing the 2003 decree, American Family, Heritage and their owners used third-party marketing firms to send direct mail ads to lists of Ohioans 65 and older and also targeted senior citizens with magazine advertising containing exaggerated claims regarding the costs and complications of disposing of their assets through a will. Persons responding to the ads were subjected to high-pressure in-home presentations in which American Family’s non-attorney sales representatives provided them with legal advice including inflated “estimates” of the costs of probating their estates and the purported savings the customer would realize by purchasing American Family’s standardized living trust document – regardless of the size or composition of that individual’s estate or his/her existing estate planning documents.

In rejecting American Family’s claim that its actions were authorized because it had registered as the operator of a “prepaid legal services plan,” the Court wrote: “In arranging these appointments, American Family telemarketers did not refer to a prepaid legal plan and did not inform the customer that he or she would be solicited to buy a prepaid legal plan or living trust. The telemarketers did ask, however, whether the prospect already had a living trust. In sales presentations, usually occurring in a customer’s home, American Family’s agents focused on convincing a customer that he or she needed a living trust. If sold, the customer paid a $1,995 fee purportedly for an array of legal services relative to landlord/tenant law, businesses, domestic relations, bankruptcy, and other legal fields, at discounted fees, from a number of listed Ohio attorneys. Almost exclusively, however, the only legal service that the plan members received was the preparation of a living-trust document and related estate-planning instruments such as powers of attorney and a living will. For this reason, for the thousands of memberships sold, few if any members obtained legal assistance other than a living-trust portfolio.”

The Court noted that despite the fact that American Family used sales persons who had never been licensed as attorneys to “advise” customers about their estate planning needs and persuade them to purchase a trust, and that other non-attorneys in California actually prepared the trust documents, the company attempted to legitimize its unauthorized law practice by passing each transaction through a Columbus attorney, Edward P. Brueggeman. Brueggeman seldom spoke with the customers who were purported to be his “clients,” and was paid a flat fee by American Family for every trust document he approved.

In its decision, the Court wrote: “From the start of his employment until March 2005, Brueggeman had an office within American Family/Heritage offices on Citygate Drive in Columbus.  Brueggeman did not pay rent and used the supplies and services provided by American Family and Heritage employees to perform his role. Brueggeman did not hire or supervise the American Family sales agents. Brueggeman, after receiving the agreement, sent a form letter to the purchasers of the plans thanking them for choosing him to prepare their living trusts and their estate-planning documents. The letter also stated that the drafting process would take four to six weeks and invited the customer to call him with questions. … Brueggeman rarely, if ever, actually met an American Family plan member in person.” A formal complaint alleging that Brueggeman’s conduct violated state attorney discipline rules is currently pending before the Board Of Commissioners on Grievances & Discipline (Disciplinary Counsel v. Brueggeman, Case No. 08-090).

The Court noted that the “trust mill” operated by American Family, Heritage and the Normans was similar to other such operations that the Court has found to be illegally engaged in the unauthorized practice of law at the expense of vulnerable consumers, usually senior citizens. The Court wrote: “A living-trust package is often not needed and may even be harmful for persons who are without significant assets, who have simple estates, or whose estates may need court supervision. A basic living-trust package, such as those sold by some of the respondents, may likewise be insufficient or even completely inappropriate for those having more substantial assets and who may need specific legal advice or even tax advice to meet their needs. For this reason, we have repeatedly held that these enterprises, in which the laypersons associate with licensed practitioners in various minimally distinguishable ways as a means to superficially legitimize sales of living-trust packages, are engaged in the unauthorized practice of law. We have also repeatedly held that by facilitating such sales, licensed lawyers violate professional standards of competence and ethics, including the prohibition against aiding others in the unauthorized practice of law. Today, we reaffirm these holdings and admonish those tempted to profit by such schemes that these enterprises are unacceptable in any configuration.”

In imposing a civil penalty of $6,387,990 jointly and severally against American Family, Heritage and their co-owners, the Court noted the aggravating factors that the respondents had been advised of  and acknowledged the illegality of their involvement in the marketing and sale of trusts in the 2003 CBA consent agreement, but shortly thereafter resumed the same activities and engaged in thousands of acts of unauthorized practice that resulted in potential or actual harm to many of their customers for a period of two years. The Court also imposed civil penalties of $10,000 against American Family’s state marketing director, Paul Chiles, $7,500 against office manager Harold Miller, and $2,500 against multiple American Family and Heritage agents who continued to engage in the unauthorized practice of law after signing the 2003 consent agreement.

In its injunction, the Court permanently barred American Family, Heritage, Jeffrey and Stanley Norman, other named parties and “their successors, assigns, subsidiaries and affiliates” from marketing, selling or preparing wills, living trusts, durable powers of attorney, deed transfers or other legal products in Ohio; offering legal advice to anyone concerning estate planning or the execution of legal products; offering or selling prepaid legal plans of any kind to Ohio residents; and from engaging in a wide range of other enumerated activities.

I have had the opportunity to review the estate plans generated by American Family.  With a "one-size-fits-all" mentality, all of the trusts are virtually identical, with clients running the risk that the particularly cumbersome and sophisticated estate tax planning trust, create for them and their families unnecessary burden.  Of course, this is the essence of the attorney-client relationship.  Your attorney should represent you, and should not represent other persons whose interests are in direct conflict with your interests.  Only by having an attorney that is independent from others, and by that attorney discharging aggressively his or her obligation to provide for you specific advice and counsel based upon your specific circumstances, goals, and objectives, will your estate plan fit you.