Estate Planning with Education and Compassion
KRIS FLAMMANG
I'd like you to take us through your history, where you're from and how you came to open your own firm.
SOMITA BASU
My story isn't a straight line. It's not linear; it's kind of spaghetti-ish. I was a mathematics major in college and I ended up working in the finance department of Prudential Insurance in New Jersey for a long time. I eventually moved overseas. I was in India for three-and-a-half years, and then I was in Singapore for an entire decade. While I was there, I did a lot of consulting in the insurance industry because that's what I knew. It was interesting. I worked for a lot of blue-chip firms. I worked for PricewaterhouseCoopers and IBM. I worked for HSBC. I definitely have that corporate background.
After I went to law school, my family moved here to California. That's where I took my bar exam and that's where I'm licensed to practice. It was like a do-over for me. I had never lived in California before, so it was very eye opening to be in the Bay Area. I tried to get something more in-line with what I wanted to do. I did some legal work in Singapore, but it was very transactional, corporate work, which didn't really interest me.
So, I volunteered at a legal aid organization called The Bay Area Legal Aid three days a week, nine-to-five, working on cases for tenants who were being unjustly evicted, which is a huge problem in this country, especially in the Bay Area. That's where I met my law partner. We joined that legal clinic on the same day. We were in training together. They put us in the same department, we worked on cases together, and I saw how she worked. I guess the rest is history.
KRIS FLAMMANG
You say on your website that you and your business partner have a common sense of humor.
SOMITA BASU
I think a lot of attorneys have a very dark sense of humor. Especially those in estate planning. I'm sure if somebody were to overhear us, they would think we were morbid, but it’s what keeps us sane. Death is a part of life. It's going to happen to everybody. I think not confronting that fact head-on causes a lot of problems for the people you leave behind.
KRIS FLAMMANG
We just avoid it. We know we’re going to die; it's just not going to happen today. Is there something you wish you knew when you started out? If you could give your younger self advice, what do you think that might be?
SOMITA BASU
There are a few things. One would be, “Don't undervalue yourself.” That's something that's very hard when you're an entrepreneur. More than attorneys, my partner, Zakiya, and I consider ourselves entrepreneurs. So, value yourself correctly, and stick by that. The other thing is, I don't think I would have realized how much perseverance it takes to get to this point. There are highs and lows, and you just have to stick through all of them to make it.
KRIS FLAMMANG
I think that's a pretty necessary trait for anyone who owns a business to have. What's a simple way that you would explain to a potential client, or to an existing one, why it's important that they have a comprehensive estate or asset protection plan?
SOMITA BASU
We tell our clients that you don't do an estate plan for yourself, you do it for the people that are left behind. If you love your kids or your friends, or there's a charity that's close to your heart, you want to make sure that they're taken care of. Because, when you're gone, you're gone. What you leave behind matters.
The other thing that's important is that an estate plan is not just about what happens when you die; it's about what happens if you don't die. With people living longer with dementia, Alzheimer’s, or other illnesses, you never know when you may be incapacitated or unable to do the things you need to do to take care of your assets or your finances or your family. You need somebody to be able to step in and do that. Having to go to court to do that is not the right option for anybody. You always want to have something in place that avoids the legal process whenever possible. That's the part of estate planning that people don't necessarily think about.
KRIS FLAMMANG
Has the probate court process gotten even more backed up because of COVID?
SOMITA BASU
I’m guessing this is a problem all over the country. It's a big problem in California compounded by major budget cuts. The court was already under a crunch. Probate tends to be like the stepchild of the court system. Even though that's where a lot of people interact with the court system, we've seen cutbacks in clerks, offices, the attorneys working with the court. Santa Clara County, where I live, has the second largest number of probates in the state of California, and until this year we had one judge.
KRIS FLAMMANG
That puts it in perspective. Are there some core areas in your practice where you get the most enjoyment?
SOMITA BASU
I enjoy all of those practice areas, but the ones I enjoy the most are the litigation cases. Unlike a lot of estate planning attorneys, we do litigation as well, which really informs the way we advise our clients. We see when things go wrong. In the litigation cases, we really get to help correct a wrong when somebody's done something they shouldn't have done or somebody's been accused of something that they didn't do. I really like that part of it.
KRIS FLAMMANG
I don't know if you find this to be true, but I think nothing causes more arguments than a lot of money being left between some people without a good estate plan to prevent conflict.
SOMITA BASU
Exactly. They often don’t address that there are bad relationships or strained relationships. They assume that the beneficiaries will work it out. That's definitely a big cause of problems.
KRIS FLAMMANG
I was hoping you could also give us an easy way to understand a revocable living trust.
SOMITA BASU
A revocable living trust is actually the vehicle that's probably most appropriate for most people with assets. If you have over $166,000 worth of assets in your name in the state of California, having a will alone will not let you avoid probate. The only way to do that is to set up a revocable living trust.
It’s easy to understand if you think about it as a gift box. During your lifetime, you put all your assets in there. It's a separate entity, it's a box, it's different from you. When you pass away, the top of the box goes on. Nothing else can be put in there. The bottom opens and it goes out to whomever you say.
KRIS FLAMMANG
That's a great analogy. Is there something you're really liking best about your business right now?
SOMITA BASU
I really like the marketing part of it—the business development part of it—which is very unusual because most lawyers hate doing that. I actually like networking. I like meeting new people. I like getting our message out there. We do a lot of speaking and explaining legal concepts in an easy-to-understand way. We want to make it accessible to everybody.
KRIS FLAMMANG
What is a common misconception that people have about estate attorneys?
SOMITA BASU
There are two. One, everybody thinks that estate planning is ridiculously expensive. I promise you probate is a lot more expensive. We know that because we do probate as well. The other thing is people think, "I can get the attorney to write whatever. I'm going to tell them what I want and they're going to do it." While a lot of things may be legally possible, they are not always advisable. That's one of the things we tell our clients.
KRIS FLAMMANG
I think of the difference between having knowledge and wisdom. Just because you can do something doesn’t mean it’s advisable. Why do you think people have that misconception that estate planning isn't necessary for them?
SOMITA BASU
I think it’s because of the word “estate”. People think, "I don't have an estate." I ask them, "Well, do you own assets? Because then you have an estate." People hear the word and they think of a mansion. An estate is everything you own, whether it's worth a hundred dollars or whether it's worth a hundred million dollars. Anything that's in your name as an individual, that's what you own. That throws people off.
KRIS FLAMMANG
Are there some commonly overlooked areas or blind spots when it comes to clients?
SOMITA BASU
There are a couple. The first one is relationships, which I mentioned earlier. People always tell us, "My kids get along great. There's not going to be any problem." I say, "Well, what about when your kids get married?" The spouses want them to tell their siblings what to do. Leaving things too fluid or vague can cause a problem as your kids get older and get married.
The other thing that we find is a big problem is the way people don't really look at their 401(k)s and their IRA accounts. Those shouldn't be in your trust, but you need to make sure that the beneficiary designations are updated. If you only have one person designated and they pre-decease you, now that 401(k) account is in probate. There's nothing else they can do. People need to update those regularly.
KRIS FLAMMANG
Do you see circumstances where naming a trust as a contingent or a tertiary beneficiary might make sense?
SOMITA BASU
Almost never. If you have a trust that is specifically created to be an IRA trust, then yes. Most people don't know to ask for that. There are a lot of attorneys who don't draft those types of trusts. If the trust becomes the beneficiary of the IRA and it doesn't have the appropriate IRS-required language, you're going to get taxed at the trust rate, which is almost 40%.
KRIS FLAMMANG
Try to think of a recent client experience that was very satisfying for you and for them. What problems were they facing? What were they trying to accomplish? How were you able to improve their life?
SOMITA BASU
On the estate planning side, we had a surviving spouse come to us and say, "My husband and I did this trust 30 years ago. My husband passed away five years ago and my kids want me to look at my documents." She had no idea what the trust does, how it functions.
Sometimes the assets aren't appropriately titled. We sat down with her and explained everything. People are usually very taken aback because that's not their wishes. So, we restated the trust. We got the assets into the trust. The attorney they used only spoke with the husband and didn't really address the wife. We do a lot of that type of thing. We've had a couple cases like that recently that were very gratifying.
KRIS FLAMMANG
I want to ask you about your own experience with money. Can you think of your first memory or experience that you had with money?
SOMITA BASU
I remember very clearly during childhood that money was not a thing that was discussed in my house. There are a lot of minority cultures, immigrant cultures, where money is just taboo. You don't talk about it and you definitely don't talk about it with your children.
I didn't get a lot of financial education from my parents. It just wasn't the culture. I had my first “aha” moment when I started working as a teenager at Barnes and Noble. It was a great job. I loved to read. But I remember getting my first paycheck and thinking, “Where did it go? What happened?” That was a rude awakening.
KRIS FLAMMANG
Taxes can come as a shock in that situation. Are there any experiences you can think of either personally or in your business, that have made you really aware of the positive or the negative impact of wealth?
SOMITA BASU
One thing I've realized—and it takes a while to learn this—money's just a tool. It's neither good nor bad. It depends on how it's used. However, in business, one of the things I have seen is that when wealth is passed on to a generation that hasn't worked to acquire it, the appreciation for it is very little. People don't appreciate what they don't work for. They seem to feel it's owed to them.
KRIS FLAMMANG
I bet you probably can implement some of those conversations in your work. When people talk about structuring, how they want to leave the money to their kids or their grandkids, they have to assure that the kids have some level of maturity before they start to get some of that money. What would you say is your biggest life accomplishment so far, either personally or professionally or both?
SOMITA BASU
One big accomplishment was going to law school remotely and flying to California to take exams with a 12-hour time difference from Singapore. That was just pure grit, getting that done. Or passing the bar on the first time, and just literally jumping off the cliff with Zakiya and starting this firm. Neither one of us have lawyers in our family, and we don't have a lot of entrepreneurs in either of our families, so we had to figure it out ourselves. Getting this firm to this point is one of my biggest accomplishments.
KRIS FLAMMANG
That sounds scary and exciting at the same time. When you’re at family get-togethers, do people ever ask legal questions?
SOMITA BASU
It happens to Zakiya more frequently. She gets a lot of questions from her family. I get some questions from my cousins, but my parents will say, "We really should talk to somebody who's a lawyer,” which leads me to say, “Ma, I'm sitting right here."
KRIS FLAMMANG
They still see you as the little girl.
SOMITA BASU
Yes. They don't see me as a grown adult functioning human. My mom still sees me as if I'm 16.
KRIS FLAMMANG
If you weren't doing what you're doing now, what do you think you'd be doing instead?
SOMITA BASU
What I wanted to be—and this is so out of left field—is the person during the football games who does the statistics they put up on the screen. I was football-obsessed because I grew up in Nebraska. I used to not eat when the Huskers lost. My mom was very flummoxed. She had an eight-year-old who would just go into a depression when the football team lost.
She didn't even really know what football was, because she grew up in a different country. It was very difficult for her to understand. I was obsessed with it. I wanted to be that person. I figured that would have combined sports and math, which were two things that I liked, and that would've been my ideal job.
KRIS FLAMMANG
That’s different. Is there a unique or interesting fact about you that very few people know?
SOMITA BASU
One thing many people don't know about me is I have a very high appetite for risks. I've actually jumped out of a plane, and I've jumped off a bridge. It was a bungee jump off a bridge over a river in New Zealand. That's also where I did the skydiving. It's not in line with my culture, my upbringing, but I did it.
KRIS FLAMMANG
It’s not in line with your profession either. I hope you had all of your proper estate documents in order prior to the jumping. With all the changes happening in your industry, like the lowering of the estate tax exemption, how do you stay on the cutting edge? Is there something you follow or read regularly? How do you stay on top of things?
SOMITA BASU
I'm a member of a number of associations: the American Bar Association, the California Lawyers Association, etc. We follow the trust and estate sections, and we are constantly reading and attending lectures. Obviously, the estate tax exemption is something we always keep a close eye on. We have a lot of clients who say, "Well, it might come down in the future. What should I do now?" I like to say that unless you're at a really high amount of assets (and by high, I mean $20 million and above), it doesn't make sense for you to take assets that you might need to use or liquidate and put them beyond your reach to try and get around the estate tax exemption.
We're very practical, but the other thing I tell clients all the time is, I cannot plan for something that hasn't happened yet. I don't know what the estate tax exemption is going to be, so I can't advise you now. I have to draft your estate plan for the amount that it is right now. For a lot of the middle-class and upper-middle-class families we serve, that's good enough. We do not want to do anything overly complicated if you don't need it.
KRIS FLAMMANG
It’s like people always asking me for my market outlook for the next six months. That's anyone's guess. It's fun to talk about that hypothetically, but we're not going to make any plans based on that. What do you consider to be the most exciting part of your business right now?
SOMITA BASU
The most exciting part about the business now is the proliferation of technology and the way it's being used, not just by attorneys, but by courts. All my hearings have been remote. There are many tools available to attorneys who want to use them. The problem is the old guard is very slow to change. The legal profession is about 15 to 20 years behind any other profession when it comes to adopting technology. But I think the tools are out there. We use a lot of them. We're always looking for ways to streamline our practice.
The whole pandemic situation didn't affect us much other than that we just weren't going in to the office. But the tools that we used were exactly the same.
KRIS FLAMMANG
Do you think the pandemic sped up the digital side of the legal profession?
SOMITA BASU
I think it did speed it up because a lot of courts required remote hearings in many cases, except for criminal cases, where you still have to do it in person. It sped it up on the civil side. Many courts started requiring e-filing, and notices were going out electronically to let everybody know it was going to be a Zoom hearing.
There are always going to be attorneys who want to do things the old way. I think the younger attorneys coming up are going to be used to more technology, more remote appearances. I think that's better for the client. It doesn't take me three hours for a hearing anymore; the hearing is just however long the hearing is.
KRIS FLAMMANG
On the flip side of that question, what do you think is the biggest challenge in your business right now? What's your biggest challenge going forward?
SOMITA BASU
The biggest challenge is always finding good people whom you can trust, who will provide a work product that is up to your standards. We have very high standards, so finding people who can deliver that is very difficult.
KRIS FLAMMANG
Do you mean in your area or in the state, or just in general in your profession?
SOMITA BASU
At this point we're okay with anybody anywhere in the state, because almost everything can be done virtually. We are based in the Bay Area. We have a really good paralegal who's based in Southern California. Location is not a problem, but we’ve found that after receiving 150 resumes, there were maybe two people that were appropriate for the role that we were trying to fill.
KRIS FLAMMANG
I'm also curious, have you encountered some level of commoditization in your industry? How has that affected your practice? How are you addressing that?
SOMITA BASU
We're hyper aware of that in estate planning. Every financial advisor on TV has a will-and-trust kit, and there are websites where you can do your own. That's not what we do. We are not document generators. We're in the business of providing advice. The documents happen to be generated for you, but the value we bring is our experience in all parts of estate planning and probate, not just generating estate plans. We do trust administration, we do litigation, and we do probate. That informs how we advise our clients.
We also remain available to our clients after they're done. Clients call us nine months, two years, five years later, with a question or a referral. They stay in touch with us. That's the level of service we provide. We are not in the business of competing with any do-it-yourself types of things. However, having said that, that is an appropriate place to go for people who are renting, and all they have is a car and a bank account that doesn't have a lot in it.
KRIS FLAMMANG
I think that comes back to something you said earlier. The internet has plenty of information, but you can't go on the internet and get the wisdom that comes from somebody that has life experiences. Do you think there's a question I should have asked you? Or would you like to expand on anything you said earlier?
SOMITA BASU
Actually, I would like to say that I think estate planning is really a fundamental part of your financial life. People don't think of it like that, but it is one of the building blocks of your financial health. People think about a rate of return on their investment account, but they don't think about what will happen to this account if something happens to them.
That's a very important part of it. That's your legacy. You don't just want to pass it on; you want to pass it on along with your values. It's not just about splitting your account between your kids. It's giving your kids or others a portion of the account, but in a way that's appropriate for that kid or that friend or that charity. Some thought has to go into these things. While it's not necessarily a fun thing for people to do, it is a necessary thing. People don't think of estate planning as part of their financial health and they really should.
KRIS FLAMMANG
You’re clearly passionate about this, but is there something you really care about outside of your business? What's important to you?
SOMITA BASU
What's really important to me is the concept of fairness and justice. I serve on the board of a legal nonprofit that provides legal services to victims of human trafficking. It's called Justice at Last, and it's the only one of its kind in the Bay Area. What I didn't know was that victims of human trafficking are often charged with crimes even though they’re victims themselves. This nonprofit helps those victims, who are largely women, often women of color, immigrants, minorities. Justice and fairness are really important to me. It's something I'm very passionate about, which is why I devote time to those types of efforts. Beyond that I'm just like everybody else; I'm binging on Netflix, wishing things would open, and yelling at my kids.
KRIS FLAMMANG
Living life. Thank you for sharing your insights.