So You Think You Have An Estate Plan?

Sound all too familiar?

It generally starts with either you or your spouse suggesting that with the accumulation of assets, house, or retirement funds, it may be time to find an estate planner. You get the idea from mailers in the neighborhood that suggest attending a simple estate planning course that offers a few hours of free advice from a local attorney or estate planner, including coffee and donuts. The mailer has some snappy line that asks, “What are the 10 key points that are often missed in estate planning?” You call and, what a surprise, they will squeeze another chair or two for you and your spouse or friend. When you arrive at the seminar, they are more interested in your personal information than helping you understand how to overcome their advertised key problem areas. The seminar gives you an interview form to help you organize your personal information so the first meeting with your newly found attorney or financial planner will be productive. This meeting will produce four documents: (1) Pour Over Will, (2) Revocable Living Trust, (3) Durable Power of Attorney for Health Care, and (4) Durable Power of Attorney on Financial Matters. However, in too many situations, the first meeting is also the last meeting.

So what did you get for your time and money?

You probably got a leather-like binder with some gold embossing characters on the front denoting that important estate planning papers are secured inside by ring binders and that each page of the important documents have the attorney’s or financial planner’s name, address, telephone, fax, and email on the side or bottom. Am I right?

Now are you finished with your Estate Planning?

You and your spouse went to the seminar, did your homework with the organizer and pamphlet describing estate planning, sat down with a professional estate planner, and signed all of the documents before witnesses and a notary. Now, your results of hard work and efforts sit in your safe while providing you with the security and knowledge that all is well. Right?

In Nelson’s world, a world of actual clients with true concerns for their individual lives , your estate planning experience would have been entirely different from what you have already and unfortunately experienced. First, you would have been provided with two separate Estate Planning Questionnaires. One focuses on the husband and his unique and sensitive issues of past marriages that may have not been disclosed to the current spouse and even on the children that are unknown to the current spouse that may also involve payments of child support, alimony, distribution of property and financially providing for university education. There may also be issues of medical treatment for sexual dysfunction. The Wife will also have her own private matters that may involve separate property from parental trusts, past marriages, children given up for adoption from past relationships, facial and body enhancements from plastic surgery that require future surgeries, and criminal convictions.

It is my experience that when you give only one questionnaire to a couple, you will not get a true and complete picture of their personal and financial lives. All of the above issues that I mentioned have happened to me as the attorney in my attempts to do a great job for couples in estate planning. Without all of the facts, I will never reach the right result for my clients.

So, in turn, each spouse is separately given or sent his or her questionnaire to be completed for my eyes only. If any client is concerned about items on their questionnaire, then I arrange a private and separate meeting with that spouse. This leads me to my next point – I do not meet with both spouses at the same time. The reason is now quite obvious. With total privacy I am able to gain a truer and complete background on the client’s needs and where the client wants his or her estate to pass on his or her date of death. Also, the other three estate planning documents are immensely affected by who will have financial control over monies during periods in which the client can not make financial decisions based on medical difficulties (Durable Power of Attorney for Health Care), by who will have the ability to make life and death decisions on behalf of the client (Durable Power of Attorney on Financial Matters), and on what property will be placed in the “separate” Revocable Trust and who will be the Subsequent Trustee and Second Subsequent Trustee (Revocable Living Trust).

In this edition of Nelson’s world, the client is actually two distinct and separate clients joined in life through marriage, but not in the planning of their separate estates. I have separate questionnaires that are kept separate and private from the other spouse. Two Wills are drafted and executed separately from the other spouse. There are two very different Revocable Living Trusts as well as private Durable Powers of Attorney documents for financial and health care.

I developed this treatment and characterizing of the couple client from what I clearly saw as fitting the true needs of the clients. Even though a couple is married and each person has known the other for years, both before and after marriage, there are still secrets and concerns that are not shared with the spouse. More than once, the wife has called several days after the joint meeting and wished to talk privately and without the husband’s knowledge. Sometimes it concerned a promise that a friend or relative was promised money in the future and she believed the husband would not be in agreement. Sometimes it involved a pregnancy when she was in her late teens and the way that she became pregnant, unfortunately sometimes forced where repressed feelings or depression is just below the emotional surface, or the birth and adoption of the child was not known to the husband. Men are equally concerned about privacy from the wife in matters concerning child support of a child, sexual dysfunction and subsequent operations, past divorces unknown to the wife, past disastrous financial dealings and even debts from plastic surgery.

Of course, meetings with the Attorney are protected by the Attorney-Client Privilege, unless one of many exceptions exists, such as the other spouse attending the meeting. At these awkward moments, the Attorney should explain the benefits of this Privilege and even though a “Waiver of Conflict of Interest Statement” is signed by both husband and wife, there is a natural conflict between spouses and any spouse can later recant or waive the Privilege. If your meeting is with a Financial Planner or C.P.A., no Privilege exists! Remember, nothing is simple in estate planning and the estate planning documents can be used against you later in the event of divorce or third-party lawsuits which would reveal information about you that you never envisioned was possible to become public or used against you in court.

In my next series of articles, I will address the following issues which will allow the reader to understand and benefit from my insight on beginning estate planning. This insight is expected to cause the reader to reexamine their existing estate plan.

1. Was your Estate Planning Professional an attorney with an active license to practice law?

2. Is your Estate Planning Professional licensed to practice in Probate Court, before the Internal Revenue Service or the U.S. Tax Court?

3. Did you execute a Will that fundamentally acted to “pour over” your estate assets from your estate to a Revocable Living Trust(s)?

4. Were you heavily advised to put your residence into the Trust(s) as your initial act of funding the Trust(s)?

5. Were all of your assets first reviewed for legal interest holding as Separate Property, Jointly Owned Property, or Community Property?

6. Does your Living Trust provide for the property put into the Trust(s) to now be defined as Community Property?

7. Were you asked to bring at least 5 years of tax returns to the meeting with your Estate Planning Professional?

8. Were you asked to bring your current passports, Driver’s Licenses, and Social Security Cards?

9. Do you really have a Co-Executor or a Co-Successor Trustee?

10. Was your Estate Planning Professional made a Witness to the Will, Executor or Successor Trustee?

If you have any questions, give us a call or email us so we can discuss your particular situation.

Michael B. Nelson, Esq.