Model Estate Planning Conference

Richard Mayberry presented this to Virginia lawyers in a Continuing Legal Education class. Offered: 2009

Different lawyers take different approaches. However, a thorough planning conference with every client is essential to an estate plan that will meet client expectations at critical times in their lives. A responsive estate planning and elder law attorney thus builds a practice on relationships with his clients-not transactions.

Some living wills, powers of attorney and other documents that fail can be traced back to the drafting lawyers perspective on estate planning and elder law. A "more [clients] is better [production] approach", rather than "client-centric approach" may be right for some clients, but not for the middle class of Northern Virginia.

Consequently, a client needs to make a decision what type of law firm is best for their family - one in which the planning conference is undertaken by the senior lawyer? or one done by junior lawyers or paralegals?

A planning conference with a senior lawyer helps ensure that a client's goals will be fully and clearly articulated before drafting starts. In addition time, in the writer's opinion, must be spent on the fundamentals of "how an estate plan works" [with illustrations or mapping if helpful] so the client, not the drafting lawyer, makes important decisions about who is the executor, the back-up executors if the first cannot serve, the different ways a legacy can be distributed to benefit minor and adult children, and other essential matters.

The following are core elements of a model estate planning conference.

Estate Planning Goals

Goal setting is a process which begins with sending the client an organizer to collect basic data and to start their thinking about the elements of a living trust. Basic data includes: (1) personal contact information, (2) family tree, (3) inventory of assets, (4) decisions on successor fiduciaries and health care agents, and (5) who receives “what, when, and how” in terms of the legacy. In addition to furthering the clients thinking, the organizer will provide core data for efficient use of time at the planning conference.

The conference aims to identify and discuss your planning goals and the universe of estate planning goals is wide and diverse:
  • Control of assets and decision-making
  • Providing for surviving spouse
  • Creditors and asset protection
  • Providing for minor children’s health, education, maintenance
  • College Saving Plans
  • Protecting legacy in event of divorce of adult children
  • Protecting children with addictions from themselves
  • Protecting blood line legacies in second marriages
  • Protecting property interests of unmarried couples
  • Tax Avoidance
  • Incapacity Planning
  • Special needs planning
  • End of Life Issues
When the client arrives for the planning conference, I quickly scan the completed organizer, and develop a dialogue with the client for several minutes so that you get to know each other. This often breaks the ice. Building trust in the early part of the conference will start to build a relationship that may last a life time.

Determining Beneficiaries

A "beneficiary" is “a person that (i) has a present or future beneficial interest in a trust, vested or contingent; or (ii) in a capacity other than that of trustee, holds a power of appointment over trust property.” Beneficiaries that have a future contingent beneficial interest can be difficult to ascertain. Also children born out of wedlock may not be mentioned.

Use of Organizer

The organizer sets forth the clients first impression to whom the trust will distribute the assets at death. The plan usually follows family relationships. A typical distribution plan for a single person is siblings, nieces or nephews. Married couples usually leave their wealth to children. Both may have charitable intent, and leave trust funds to a charity that has been meaningful in their lives.

Exploration of the basis for distributions to other beneficiaries, such as friends, should be explored with the client. For example, failure to inherit or disinherit a spouse or a child can affect the validity of the trust. The spouse has a right to the marital share. A child disinherited must be expressly stated in the trust.

Naming parents as beneficiaries also requires further discussion. Legacies can lead to a penalty for parents receiving needs based government benefits such as Medicaid. Moreover, the adult child will typically outlive the parent. Naming a parent as a beneficiary may not be effective. Alternatively, a parent’s life style can be significantly enhanced by a trust distribution. The client goal, properly thought out, dictates beneficiaries.

Identification of beneficiaries leads to the issues of the form of the distribution. Outright, installments and in trust are several variations available. Many beneficiaries prefer an outright gift. However, immature beneficiaries may spend their legacy on items that do not benefit them over the long run, such as funding an IRA. Installments distributions at age 25-30- and 35 are common. 

A school of estate planning attorneys has developed that the most effective transfer is in trust. Limited asset protection is afforded. With a beneficiary controlled trust, a ready investment vehicle and partial estate plan is in place for the adult child. 

Children with addictions or spendthrift tendencies inheritances are left in trust by watchful parents. Control is vested in third parties the parents have confidence in making mature decisions.

Discussing Your Beneficiaries

These questions will often lead to developing important information about how the plan should be drafted.
  • Tell me about your children?
  • Tell me about yourself?
  • Tell me what concerns brought you into my office today?
  • What’s your relationship with your adult stepchild? When is the last time you two talked? Got together for a holiday?
  • Any credit card debt with any of the children? Did you help the child out by paying the debt?
  • Any of the beneficiaries have health issues or disabilities?From there, family members are identified, family dynamics noted, and specific focus are set, such as tax or probate avoidance surfaces
Fiduciary Selection

Trustee selection often arises with the following questions:"Of the various members and others, who do you trust to make prudent decisions for you in the event you can’t make them yourself due to incapacity or death?"

I also explore the advantages of avoiding outright distributions to children and retaining trust property at death in separate trusts, often beneficiary controlled.
"Would limited asset protection, in case you adult child or if the child divorces, be important to you?"

At the right point in the conference, I also explain that the Virginia bar rules on written engagement letters, and present it to the client to read and sign.

Reasonable Expectations For Services and Fees

Law is a service business. Tie up loose ends with questions such as these to each family member in the planning conference:"What comments, questions or observations does this conference leave you with?"

Sometimes a client has difficulty in making decisions about goals. Additional planning conference may be required. Clients differ in their level of sophistication and understanding of estate planning. I may also suggest that they consider attending an estate planning seminar or self-study. Amazon has wide array of easy to read estate planning primers. The web is full of useful information and ‘googling’ estate planning in Virginia leads to helpful web pages.

I also note that some clients find a planning conference with their family advisors, such as accountant or financial advisor to be helpful. A team approach offers many advantages in discerning and implementing a living trust based estate plan.

Judgement, Wisdom, Experience

Throughout the process described above,the estate planning attorney and elder law attorney should work to help the client understand that "judgement and experience" is really what is purchased by the consumer-not documents. 

This skill is honed over many years for the lawyer. The result usually leads to client expectations for the legal work that are reasonable, and the goals can be set forth in the engagement letter. 

Living trust or wills, in fact no legal instruments used in estate planning and elder law, is an end all to fit all. Turn key estate planning does not exist because at some important level-irrespective of net worth-every person and family is different. The best commercial practices demand no less from any estate planning or elder lawyer.