This article was written by Howard Vigderman for VIP and the Legal Intelligencer’s Public Interest Page. It was published May 15, 2023.
Estate planning for most individuals, in particular low-income individuals with few assets, is simple. It does not require much thought or consideration and can, of course, be handled without legal advice. After all, anyone can Google “will,” “living will, “advance directive,” or “power of attorney” and find scores of appropriate documents. Then it is just a matter of downloading the template and filling-in names. Simple enough and far easier than finding, working with, and compensating a lawyer. Right?
Most estate planning lawyers would disagree with that view, but it is a common one, perhaps especially for the two-thirds of Americans who have no documented estate plan. I volunteer at Philadelphia VIP to draft planning documents for low-income Philadelphians, and staff attorneys there tell me they encounter clients operating under similar assumptions. To the extent VIP’s clients already have wills, they are often one-size-fits all documents, or they are overly complicated because of bad advice from friends, neighbors, or even TikTok videos.
Regardless of a client’s income level, and even for clients with seemingly straightforward goals, DIY estate planning is generally not a good idea for many reasons. Well-drafted, customized estate planning documents are drawn to take into account not only present circumstances, but changes of circumstance. Online documents might not consider changes of circumstance. By the same token, hastily lawyer-drawn documents might miss important issues.
DIY documents can also cause confusion because two different people can read the same words differently. Skilled estate planning lawyers are trained to draft documents that reduce the likelihood of ambiguity and disagreement.
Not all estate planning for assets can be captured by a will and financial power of attorney. Deeds, account opening forms and beneficiary designations are important and can supersede a will and financial power of attorney. Without knowing the rules, there can be unintended results which it may be too late to fix after the estate plan has been implemented.
Finally, there is value to having an attorney not just to draft, but also to advise. Online information can be outdated, not apply in the state where the individual resides or just be plain wrong. And beyond that, we do not know what we do not know. There are often issues to consider that are simply not obvious.
Nowadays, when attorneys’ fees are out of reach for many and legal instruments are available at the click of a button, it is worth examining the question: How exactly should we counsel individuals on their estate plans, and what can go wrong if counsel is not involved?
Even without ever having consulted a lawyer or signing a legal document, each individual has at least part of an estate plan that applies at death. For example, a residence or bank account may pass to a spouse by virtue of how the deed was prepared or how the account was established. Every state has intestacy laws that dictate how assets pass at death and elective share rules that govern the rights a surviving spouse has in the estate of a first spouse to die. A client whose estate passes under the intestacy laws is in effect delegating to the state the disposition of her assets on death.
Such “unintentional” estate plans are unlikely to address the client’s goals. The client needs to consider what happens if one of the beneficiaries under the unintended plan were to predecease the client. The client’s residence or bank account may be joint with someone else, but what happens if the co-owner predeceases the client or the co-owner survives her – to whom does the residence or account pass then, and is that result consistent with the client’s goals?
Our client might also have elements of an out-of-date (and out of mind) estate plan. The will may, for example, have been written before the client went on vacation 30 years earlier. The insurance beneficiary designation that the client signed after having children or joining the military or the qualified plan beneficiary designation that she signed the first day of a job – these too might be outdated.
Exploring these issues with an estates lawyer who understands what estate planning can and cannot achieve is crucial. At the beginning of the planning process, the attorney should set realistic expectations for the client. For example, “I can draft a will which leaves your estate to your children, but I cannot guarantee what your children are going to do with the money. For that, you might need a trust.” The attorney should discuss with the client her estate planning goals and the extent to which the existing plan – intentional or unintentional – achieves those goals.
The attorney should focus not only on circumstances as they exist today, but also on changes of circumstance over time. This means not only what happens if an individual named as a beneficiary, executor, or agent dies before the client, but also if the individual becomes incapacitated, or moves away, or that individual’s circumstances change. That will usually require teasing out the issues and gently cross-examining the client so she can examine more broadly and deeply her goals.
The client will need time to consider her estate plan. To assist her, the lawyer might draft a summary of the first meeting and schedule a second meeting to pursue further the issues unearthed in the first meeting. Usually after no more than two meetings the lawyer can send draft documents to the client with a short letter of explanation which highlights the more difficult issues. After that, the documents can be reviewed, usually over the phone, and then the lawyer and client can schedule a time for a final review, and the execution, of the documents.
During the relatively brief representation, lawyers should be aware of and able to respond to common issues that require attention, consideration, and perhaps reconsideration. For example, the client might want to leave her estate to her children, but not consider that a heirloom or memento should pass to a friend or other relative. The client might want to make a cash bequest to charity. A lawyer’s job here is to counsel the client on how she can dispose of her assets, even gifts that might not be top of mind.
The selection of an executor is crucial and another focus of counseling. The client may have a skillfully written will, but if the executor cannot do her job, the administration of the estate can suffer. Is an elderly relative the right person to serve as executor? What if the executor lives thousands of miles away? What if the executor is a busy person who will not have time to go through the contents of the client’s residence? If more than one executor is named, will they get along and who will do what? What about executor compensation? The attorney is well-positioned to raise these questions, which may not occur to the client.
If the client has minor children, the attorney will need to have a conversation about choosing a guardian. Some questions to consider: Will the children have to change schools if the client dies? If the client’s intended guardian has other children, will that person be able to take on the additional responsibility? Does the guardian get along with the trustee or custodian who is managing the child’s funds? What happens if the guardian named in the will is partnered, but later un-partners, or is single but later partners? Does that change the selection of guardians?
Similar practical issues apply to the appointment of an agent under the power of attorney. The client should consider whether the intended agent has the time and capacity to pay the client’s bills and make sure income taxes are filed, and how the agent will interact with other stakeholders. Above all, the lawyer should make sure the client considers whether the agent is trustworthy.
Estate plans are complicated, living documents, and the list of questions which the lawyer and client could review is endless. The starting point is generally not filling-in online documents or “same day service” estate planning. These important matters require time, consideration and discussion. With patient, thoughtful counseling from a skilled attorney, clients can rest assured that whatever their assets are – from complex multimillion-dollar estates to a family home and some jewelry – are accounted for and will end up in the right hands.
Reprinted with permission from the May 15, 2023 edition of the Legal Intelligencer © 2023 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.