In my first Epilawg installment, I wrote on the estate-planning needs of people with diminished capacity. This blog post will dive into the discussion that takes place at a first meeting with a client.
People with diminished capacity will nearly always come to the meeting accompanied by a spouse, child, or loved one. This is the first indication that an estate planner needs to ask an additional series of questions. The answers to these questions will demonstrate whether the client has the capacity to execute an estate plan.
The first set of questions should aim to discover whether the client has sufficient capacity to enter into an estate plan. If the client does not have the capacity, then an estate plan created at that point would be a target for litigation or motions on unenforceability and could expose the estate planner to malpractice claims or an ethics board investigation.
As discussed in my previous blog post, capacity to enter into a testamentary document requires a lower level of capacity than that required to enter into a contract. This assumes that even a slightly diminished capacity is sufficient to sign a testamentary document. This lower bar likely hails from historical practice of drafting testamentary documents in late stages of life.
Assuming the client has sufficient capacity to enter into an estate plan, then a second series of questions is vital. That series of questions will determine whether the testator’s intent is what it would have been had the testator been at full mental capacity. It will also assist in determining whether the testator’s intent will ruffle any feathers among family members.
The best-case scenario is an elderly client who is the last surviving spouse of a marriage and who only has one child. There is a lower likelihood that the estate plan will be challenged at any given point. There is a higher likelihood of a challenge if any of the following factors is present: multiple adult children, predeceased children who left children of their own, subsequent marriages, stepchildren / blended families, or disinherited children to name a few. If any of these situations is present and the client is accompanied to the meeting by only one adult child or by a subsequent spouse but not by biological children, for instance, then this second series of questions will be even more important.
The estate planner will then need to ask many questions about family dynamics and will need to be satisfied with the answers given. These questions can be something like, “do your other children know you are meeting with me”; “are your other children on board with your decisions”; “do you intend to treat all of your children equally”; etc. If the answers to any of these questions is in the negative, it is imperative that an estate planner follows up to learn specifics.
In many instances, an elderly parent will have one adult child who is the primary caretaker of the parent. That caretaker is an excellent candidate for accompanying the parent to the meeting. So, there is nothing wrong with creating an estate plan for a client who is accompanied to a meeting by only one child, but it is important that you confirm with the client that the other children are on board with the plan.
Communication is essential in creating an effective and enforceable estate plan. An estate plan should not contain any surprises. If there are surprises, it could incite litigation.
Back to the situation with the primary-caretaker child accompanying the parent to the meeting. If that child is to be treated any differently than the others based upon his/her efforts with the parent, then it is crucial to ensure that the other children are in agreement with the plan. It may work well to invite at least one other adult child to the meeting. If there are multiple adult children, ask which child is the “ring leader” or “alpha” of the group, if there is one. A more sensitive and appropriate question may be “do you have a child who tends to take the lead on communicating with the group or planning vacations,” so as not to offend the present child. See if that child is available to come to the meeting or to at least attend a conference call. It is worth the extra time and effort to avoid any sort of confusion or distress upon the client’s passing.
The next series of questions should deal with types and values of assets, the nature and manner of intended distributions, and the selection of fiduciaries – attorneys-in-fact, health care agents, personal representatives, trustees, etc. The rest of the meeting should progress as it typically progresses with estate-planning clients.
People often assume that estates with more assets are the estates that are most subject to litigation. I propose that it is the estate with the most challenging and unhealthy family dynamics. One of the most challenging qualities of such families is a lack of communication and an inability to address difficult questions. If a family cannot discuss an estate plan with one another, it is likely that they have had difficulty addressing any potentially contentious topic with one another, which has allowed unexpressed feelings to fester. This is a dangerous situation. People in these situations tend to rely upon litigation to work through their emotions. Litigation almost always ends in further feelings of heartbreak, dissolution, isolation, and even anger – not to mention is a drain on clients’ finances.
If an estate planner senses that a family has difficulty communicating, then it is appropriate to offer to meet with the family to discuss the estate plan and answer any questions. It is important to make it clear that the estate planner represents only the client and not the entire family. So long as that is understood, then a productive conversation can be had whereby the estate planner can communicate the plan and the client can communicate that the plan represents his/her intent. So often litigation starts with the feeling that “Dad never would have wanted so-and-so to inherit all his money.” Maybe Dad did want that. It is too late to know once Dad is gone.
When in doubt, always correspond with clients about the plan. Write letters and save them in your file communicating the options and the pros and cons of each one. These letters will assist the estate planner if litigation ever commences in the future. And clients sometimes appreciate seeing their ideas in writing where they can mull them over and make the best decisions about how to proceed.