Basics of Estate Planning: Client Control

This is another in a series of blogs on the basics of estate planning. Last week, we looked at community and separate property. This week, we’ll look at client control and why it is critical to estate planning designed to meet the goals of the clients.

When a client meets with an attorney, often they have very specific ideas in mind. Some of these ideas may make sense in the real world while others may not. An attorney is not merely a scrivener. If that were the case, the client could go to sources like Legal Zoom to just get documents. An attorney should pull the client back from specifics and look instead at the client’s underlying goals behind the specifics.

This is true in the field of estate planning, as much or more than in other fields of law. In some fields, a client may not think they know enough to form an opinion. In estate planning, often clients think they know enough to form an opinion. However, they may have overlooked key issues.

One client may come in and say they want their assets split and distributed outright to their three children at the death of the client. On the surface this seems straightforward enough. It certainly may be accomplished. However, if you do not probe further, you may not be providing optimal counsel.

Let’s say the three children are Mary, Betty, and Johnny. Mary is an anesthesiologist and single. Betty is a married school teacher. Johnny is single and has a progressive illness and will need extensive care in the future.

It would be well to discuss with the client the idea of a discretionary trust for Mary and the creditor protection it could provide with an independent trustee. Similarly, if the client considers a possible future divorce of Betty, they may rethink a trust for her. Finally, if Johnny has a progressive illness, perhaps a special needs trust might be appropriate for him.

Another simple example is a client with a farm in the country currently worth about $1 million and a house in the city worth about the same $1 million. They have some other minor assets. The client has two children, a son and a daughter, both close to 20 years of age. The client wants to leave the house in the city to her daughter and the farm to her son as specific bequests. The unspoken desire is to leave a relatively equal value to each child. The client is age 55 and in good health. There are at least two issues here that the client may not have considered. First, the values of the properties may vary dramatically between now and the client’s death in two or three decades. The house in the city may be in a declining neighborhood and may be worth $250,000 or less at the client’s death. The farm might explode in value to $2.5 million or more due to development pressure. Would the client really want to leave only 1/10 as much to her daughter as to her son in that case? Also, the children may not want those specific properties. The son who now fishes on the farm may have moved away in college and live in New York City by the time the client dies. The daughter may have married and moved to Seattle. Perhaps a better alternative is to split the value of the assets between the two children. If desired, the daughter could be given the right to purchase the house in the city and the son could be given a right to purchase the farm.

Of course, the final decision is the client’s unless you believe strongly that it would be illegal or unethical to do so. In such a rare case, you could withdraw from the representation.

As an estate planning attorney, you are not merely a scrivener. Your task is to ferret out the true underlying goals of the client, such as asset protection, divorce protection, fairness, etc. Then, counsel the client in achieving those goes.

In upcoming blogs, we’ll look at more of the basics of estate planning.

Stephen C. Hartnett, J.D., LL.M.
Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
www.aaepa.com