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ADDING VALUE TO YOUR CLIENT’S ESTATE PLAN PART 1

by: Begley Law Group

by Thomas D. Begley, Jr., CELA

This is the first of a two-part series on adding value to your client’s estate plan. (Click here for Part 2)

Lawyers assisting clients with their Estate Planning should consider providing services beyond the drafting of a Will, Advance Directive and Power of Attorney (POA). These additional services make the client’s life easier and ensure that the client’s objectives are accomplished. Additional considerations might include the following:

Task-Specific POAs  

General Durable POAs have become very long, because they need to be complete. Employees of banks and other institutions don’t like to read these long documents.  As a practical matter, it makes the client’s life easier if the attorney prepares carve-outs from the General Durable POA as follows:

  • Banking. The provision of the General Durable POA relating to banking can be incorporated into one very brief document for use in dealing with the banks.
    • Real Estate.  If an agent uses a POA to sale or mortgage real estate, the POA must be recorded. County Clerks charge recording fees based on the number of pages in the document. By shortening the document, savings are achieved on the recording fees.
    • Securities.  The provision of the General Durable POA relating to securities and brokerage accounts can be incorporated into one very brief document for use in dealing with the financial institutions.

Advance Directives

            Send the client’s Advance Directive to his or her primary care physician.  The contact information for the physician can be obtained on the client intake form.

Beneficiary Designations

            Assist the client in changing beneficiaries of all life insurance, retirement plans and annuities.  Frequently, the existing beneficiary designations do not comply with the intentions that the client expresses in his or her Will or Living Trust.  Beneficiary designations should be coordinated with these documents.  A separate charge may be considered for this service.

Retitling Assets

            Whenever real estate needs to be retitled, the attorney should prepare the Deed. If real estate is located outside of the state in which the attorney is licensed, the attorney should assist in obtaining the services of an attorney in the state where the real estate is located to prepare the Deed and record the executed instrument.  

If other assets need to be retitled, the attorney should assist.  Again, a separate fee may be appropriate.

Tangible Personal Property

            Very few clients ever actually complete a Letter to Instructions with respect to tangible personal property.  This often results in family arguments and a failure of the client’s wishes to be implemented.  The attorney should give the client a sample letter of instructions to prepare a separate list or memorandum for the disposition of tangible personal property, and review the procedure with the client.  The client should be strongly encouraged to complete this list.

The following requirements for use of a separate writing or memorandum should be provided to the client:

  • The memorandum or list must be in your handwriting and should be signed and dated by you, or if typed or not in your handwriting, the memorandum or list must be dated and signed by you.  Your signature need not be witnessed.
    • The memorandum or list must describe clearly each item so that a particular item will not be confused with any other similar item.
    • Your Will must refer specifically to your disposing of tangible personal property by a separate memorandum or list.
    • The memorandum or list may be completed prior to the date of signing of your Will or at a date after the signing of your Will.
    • The memorandum or list, to be effective, must be in existence at the date of your death.
    • The memorandum or list does not apply and will not be effective to transfer money, evidences of indebtedness, documents of title, securities, stocks, bonds, and property used in a trade or business.
    • The items of tangible personal property disposed of by the memorandum or list should not be those items specifically disposed of by your Will.
    • You should identify clearly the beneficiary who is to receive each item by his or her proper name and relationship to you. If the beneficiary is not in the area, you should list his or her address.
    • Consideration should be given to naming an alternate beneficiary should the first beneficiary not survive to receive the property.
    • From time to time, you may change the beneficiaries or the items listed in the memorandum, and you may also revise or revoke the entire memorandum.  However, NEVER make changes by marking or altering a signed memorandum, handwritten or typed.  Changes should be made only by a new handwritten or typed memorandum and by signed and dating the new memorandum.  After signing the new memorandum, the old memorandum should be destroyed.

Binder for Client

            Include all of the client’s documents and the above information in a binder, and also include a Questions and Answers document.  This might include the following questions:

  • What does “by representation” mean?
  • What does the “generation-skipping paragraph” mean?
  • What does the “age requirement” paragraph mean?
  • What is a Bloodline Trust?
  • How much can an Executor be compensated for administering an estate?
  • Please explain the term “Ancillary Fiduciary.”
  • What does the “nomination of a Successor Trustee” clause mean?
  • Please explain the “Rule Against Perpetuities” clause.
  • What does the “common disaster” clause mean?
  • Please explain the purpose of the “disability provision” clause.
  • Where shall I keep my Estate Planning documents?
  • When should I review my Estate Planning documents?
  • Do beneficiary designations supersede my Will?
  • What are the differences between tenants in common and joint tenants with right of survivorship?
  • Do I have to leave something in my Will to my children?
  • Who should get copies of my estate planning documents?
  • Will my estate planning documents be valid if I relocate?
  • What are the duties of a personal representative of a Will and whom should I select?
  • Can a beneficiary of a Will also be a witness to the Will?
  • How can I change my Will?
  • How do I alter or revoke my Will?
  • When is someone mentally incapacitated to make a Will?
  • What are the requirements to execute a valid Will?
  • Are handwritten or oral Wills valid?
  • Can I make a Will in this state if I own property in another state?
  • I have heard that a Living (inter vivos) Trust is a good way to avoid the costs of probate and inheritance taxes.  Is it a good idea?
  • When do I have to file a gift tax return?
  • I want my child or someone else to take care of my affairs when I am no longer able to do so.  How can I make sure he or she will be permitted to act for me?
  • What is a Durable POA?
  • How do I revoke a POA?
  • Can my Agent under my POA be forced to act, even if he or she does not want to do so?
  • If I have given someone a Durable POA, will it be necessary to have a guardianship proceeding if I become incapacitated?
  • Can a bank or other institution refuse to honor a valid POA?
  • If I give a POA to another, do I give up the right to manage my own affairs?
  • Is a Living Will valid?
  • Is a POA for health care valid?