We are all somewhat familiar with online sites which offer to individuals in need of estate planning services the preparation of “a personalized legal document specific to your state.” Individuals using the services of such companies are asked to complete questionnaires which include basic asset information, the names of desired beneficiaries, the individuals or entities to serve as Executors or Trustees under a will or trust agreement and the individuals to serve as guardians for minor children. Based on the information provided, the service allows the system to assemble the provided answers in the form of a will or a will and trust agreement under which the client’s assets are directed to be distributed. What does not happen in the process is the interchange of ideas and issue identification occurring in an office conference between a client and an attorney who is engaged to perform estate planning services. Not only is it likely in the “form completion format” that something will be “lost in translation,” but it is guaranteed that important questions will be left unasked and unanswered. This month’s blogpost sets out several issues which are adequately addressed only by an estate planning professional conferring with his or her client face-to-face.


Prior to a first conference with a client, the estate planning attorneys in our firm ask the client to complete a Confidential Client Questionnaire. This document provides the client with areas in which to share information about their families or other intended beneficiaries, types of assets and liabilities comprising the client’s estate, the existence of pre or post marital agreements and anticipated gifts or inheritances. The information from the clients is not provided in a “check the block” format; it is solicited in a user-friendly manner. If insufficient space is allowed for any of the information, it can be provided in supplements or attachments. Often the form comes back to us with questions from the clients. We seek the information which prompts both the client and the attorney to address questions which may have more than one answer or which can be answered in more than one way.


At the first conference with the completed client questionnaire in hand (or, as I tell my clients, “completed to the point that you are giving me enough information to begin addressing the issues, but not so much that the burden of completing the form has made you question whether the process is worth the effort”), the attorney is prepared to listen to the goals of the client presented across a conference room table, both the tax savings goals and the goals of disposition. Absorbing what the client shares, the attorney advises whether the current titling of assets and beneficiary designations and the provisions of any estate planning documents are sufficient to assure that those goals will be reached. Suggestions are offered, alternatives are discussed and decisions are ultimately made by the client who absorbs the good legal advice presented and directs changes to or drafting of new estate planning documents.


Three examples of drafting decisions which can be made correctly only after noting the impact alternative choices have on the estate plan are found in the areas of gifts to charities, the impact of cash vs. percentage gifts from an estate and loans or gifts made to a beneficiary during life.

Have you considered what asset of yours constitutes the best gift to a charity you want to include in your estate plan? Let’s assume you want to make a gift of $10,000 to each of a charity and your nephew. Initially, you name your nephew as beneficiary of your $10,000 IRA and include a bequest of $10,000 to the charity in your will. A tax-wise attorney would advise you to designate the charity as the beneficiary of your IRA and to make a $10,000 bequest in your will to your nephew for the reason that the charity does not have to pay tax on the IRA distribution as your nephew would if he were the IRA beneficiary. This simple change means that your nephew receives more and the tax authorities less.


Do you want to make cash gifts to several beneficiaries? If so, are you concerned with the impact of those gifts on the amount you leave to others if the value of your estate decreases before your death? You have named your five grandchildren to receive $50,000 ($10,000 each) of your estate at your death. You may have concerns that the size of your estate may decrease before your death and that these gifts may be disproportionately large since you have named your children as the recipients of the balance of your estate and desire that they benefit from the bulk of your assets. Would you prefer to have your grandchildren divide a percentage of your estate instead? If the size of your estate decreases, the amount distributed to your grandchildren will decrease as well, thus not impacting adversely the amounts paid to the other beneficiaries of your estate.


If you have loaned money to a beneficiary of your estate or have made a significant gift to a beneficiary, do you want to forgive this loan at your death, if it has not been repaid, and to treat the amount forgiven as a part of that beneficiary’s share of your estate? Do you want to treat the gift made to a beneficiary during your lifetime as a portion of that beneficiary’s share of your estate? The language for “equalizing” distributions to beneficiaries of your estate on account of a loan made and forgiven or a gift made can be tricky. Careful drafting to clearly state your desires is essential.


There are numerous other areas of discussion which are easily overlooked if the right questions are not asked. They include guardianship appointments, payable on death designations, ownership of real property in another state, retirement account beneficiary designations and the impact of an inheritance. Next month’s blogpost will address each of these areas, providing examples of alternatives which should be considered if the clients’ goal in the engagement are to be met.

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