Estate Planning Nightmare [Problem with estate planning attorney]

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FBN2014
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Estate Planning Nightmare [Problem with estate planning attorney]

Post by FBN2014 » Fri Feb 08, 2019 10:00 am

I am usually good at determining the quality of legal advice because I thoroughly research the topic and the attorney that I engage. However my recent experience broke that record. My wife and I hired an estate planning attorney last summer to create estate documents. The estate is not all that complicated but there were some concerns regarding my children being remainder beneficiaries of several trusts that my parents had set up for my brother and a special needs grandchild that we have. I felt the initial meeting went well enough but the trouble started shortly after and only got worse. Since I had paid a non refundable deposit (50% of the fee) I did not want to fire the attorney. He repeatedly missed times to get draft documents to us, was slow in answering questions, and then after I questioned why it was necessary to have separate revocable trusts, he gave a lame answer and said it can be a joint trust if we want. He told us that everything would be finalized in early January but then missed the deadline by 3 weeks. Throughout the draft review process I would email him questions as to why certain language was in the trust that I didn't understand. Sometimes he responded other times he didn't. I felt that we were almost finished and this would be lifted from my shoulders when he sends me an email last week stating that his documents contain language that applies to most clients but may not necessarily apply to us since this is part of the efficiencies built into his practice to keep fees low and that he should have charged us 2X what he quoted and he has spent 13.5 hours on our case. My response was that I felt it was my right to question language I didn't understand. After all, why sign something you can't understand. His response was that he wanted to terminate the relationship and would refund my deposit. I was astonished since he has already emailed to me the revised drafts of the will, trust, POA, and Healthcare POA. So I got fired and am now at square one again. Very strange experience since I have always been satisfied with other attorneys I have used for various matters. :oops:
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

neilpilot
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Re: Estate Planning Nightmare

Post by neilpilot » Fri Feb 08, 2019 10:08 am

FBN2014 wrote:
Fri Feb 08, 2019 10:00 am
His response was that he wanted to terminate the relationship and would refund my deposit. I was astonished since he has already emailed to me the revised drafts of the will, trust, POA, and Healthcare POA. So I got fired and am now at square one again.
Is there a reason why you don't consider going forward on your own using the draft documents? Based on my experience with similar documents, you typically only need a notary to initialize the items mentioned. When moving assets into the trust, only property title transfers would normally need any legal assistance, and that item can be done by any real estate lawyer for a pittance.

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Re: Estate Planning Nightmare

Post by Jack FFR1846 » Fri Feb 08, 2019 10:15 am

Was your understanding not set by the attorney when you hired him and gave him a retainer? I know in my own dealings, my attorney charges his fee to the 1/10 hour (6 minutes) based on an hourly rate. I do understand that some agreements are instead to charge a set fee for a set task and I've done that as well. Which way you're paying matters. If you've paid for the task, regardless of hours of work, then that's the attorney's risk that he'll have to spend more time than usual. Your questions should be answered either way. It's just a matter of whether your using the attorney's time or you're paying for it with each question/answer.

I have been quite aware of how I'm paying and when I'm paying $500 per hour, I understand that getting on the phone to ask a question is going to take at least 6 minutes and cost me at least $50.
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FBN2014
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Re: Estate Planning Nightmare

Post by FBN2014 » Fri Feb 08, 2019 10:17 am

neilpilot wrote:
Fri Feb 08, 2019 10:08 am
FBN2014 wrote:
Fri Feb 08, 2019 10:00 am
His response was that he wanted to terminate the relationship and would refund my deposit. I was astonished since he has already emailed to me the revised drafts of the will, trust, POA, and Healthcare POA. So I got fired and am now at square one again.
Is there a reason why you don't consider going forward on your own using the draft documents? Based on my experience with similar documents, you typically only need a notary to initialize the items mentioned. When moving assets into the trust, only property title transfers would normally need any legal assistance, and that item can be done by any real estate lawyer for a pittance.
I thought of that but at this point I don't have any confidence that the docs are drafted correctly and it would create headaches for beneficiaries in the future.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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FBN2014
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Re: Estate Planning Nightmare

Post by FBN2014 » Fri Feb 08, 2019 10:19 am

Jack FFR1846 wrote:
Fri Feb 08, 2019 10:15 am
Was your understanding not set by the attorney when you hired him and gave him a retainer? I know in my own dealings, my attorney charges his fee to the 1/10 hour (6 minutes) based on an hourly rate. I do understand that some agreements are instead to charge a set fee for a set task and I've done that as well. Which way you're paying matters. If you've paid for the task, regardless of hours of work, then that's the attorney's risk that he'll have to spend more time than usual. Your questions should be answered either way. It's just a matter of whether your using the attorney's time or you're paying for it with each question/answer.

I have been quite aware of how I'm paying and when I'm paying $500 per hour, I understand that getting on the phone to ask a question is going to take at least 6 minutes and cost me at least $50.
He quoted a flat fee. I didn't think my follow up questions were unreasonable, he thought differently. Next time I will have that spelled out in the engagement letter.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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RickBoglehead
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Re: Estate Planning Nightmare

Post by RickBoglehead » Fri Feb 08, 2019 10:26 am

Two points I think are worth emphasizing for others.

First, "I thoroughly research the topic and the attorney that I engage". That's crucial, IMO. People often have no clue what they need or why. Education prior to retaining an attorney, and researching the attorney, is very important.

Second, when the attorney said "his documents contain language that applies to most clients but may not necessarily apply to us since this is part of the efficiencies built into his practice to keep fees low" that was a big red flag. He's using boilerplate. Documents should be tailored to clients, not to lawyers.

The fact that you are out of this with a full refund is great. If the documents are better than what you had prior, you should consider getting them notarized WHILE you work on getting a new attorney.

I hired an attorney a few years back for probate work in another state, because that avoided me posting bond and I figured they would be able to navigate the system for me. This attorney was recommended by a friend of one of the heirs. What a mistake. He/she missed deadlines, wanted to do work that I said I would be doing (like tracking expenses incurred in settling the estate, letters to banks, etc.), and then was so tardy in responding that he/she waived her entire final bill. I submitted a very poor review of his/her work to Avvo. Fast forward 2 1/2 years and he/she sent me a letter that he/she was closing their firm and that she would be bringing the files to a new firm unless I declined. The letter was mailed 3 weeks after it was dated, and the files had already been moved. I sent them a letter telling him/her that they were no longer the attorney of record for this closed estate.

Just because someone is a lawyer (or a doctor or any other profession) does not mean they are any good. Every profession has stars, people that perform adequately, and people that bring the reputation of that profession down. Research is very important.

My personal barometer is to request a 15 minute initial meeting from any professional, at no charge. If they aren't willing to do that, I don't proceed further.
Last edited by RickBoglehead on Fri Feb 08, 2019 10:34 am, edited 1 time in total.
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Sandtrap
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Re: Estate Planning Nightmare

Post by Sandtrap » Fri Feb 08, 2019 10:30 am

Options amongst many:

1. Carefully evaluate your contract, funds paid, what was received, quality of what you received so far, responsiveness of legal counsel, and . . very importantly . . quality of work.

2. If not satisfied with the above, (after making some effort to work things out which it appears you may have) there's no sense dragging it on (it can go on for a very long time with similar substandard results), move on to seek another professional. (even if you feel you overpaid or all of your money paid was wasted.

3. Consider that there is a good and a bad fit between legal counsel and client for any number of reasons. It's nobody's fault. Just is regardless of who the professional is. IE: CPA, Legal Counsel, MD. Etc.

4. Remember that you are your own best advocate. Don't settle for anything less than optimal when it comes to Estate Planning for yourself, just as you would not settle for less than the best for brain surgery.

5. Remember that this happens to many folks. It's not just you. Investigate. . do due diligence, then trust your instincts :D .

6. Move on.

(been there)
Good luck.
j
Last edited by Sandtrap on Fri Feb 08, 2019 10:39 am, edited 1 time in total.
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NotWhoYouThink
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Re: Estate Planning Nightmare

Post by NotWhoYouThink » Fri Feb 08, 2019 10:30 am

A bespoke suit costs more than an off-the-rack suit from Men's Wearhouse. You wanted bespoke, he had priced off-the-rack. Go find the bespoke attorney you seek.

Rupert
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Re: Estate Planning Nightmare

Post by Rupert » Fri Feb 08, 2019 10:31 am

I'm sorry you had a bad experience. But he's perhaps done you a favor by terminating the relationship and refunding your fee. Maybe he was over his head.

How did you find this attorney? Does he work in a firm, or is he a solo practitioner? Does he hold himself out as an estate planning expert, or is he a sort of general practitioner who just does a bit of estate planning?

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FBN2014
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Re: Estate Planning Nightmare

Post by FBN2014 » Fri Feb 08, 2019 10:37 am

Rupert wrote:
Fri Feb 08, 2019 10:31 am
I'm sorry you had a bad experience. But he's perhaps done you a favor by terminating the relationship and refunding your fee. Maybe he was over his head.

How did you find this attorney? Does he work in a firm, or is he a solo practitioner? Does he hold himself out as an estate planning expert, or is he a sort of general practitioner who just does a bit of estate planning?
He answered a question I posted on Avvo. He gave a very good answer. I followed that up with a phone conversation and email exchanges. His practice is limited to estate planning. Lastly his fee was very reasonable compared to others. I guess the old adage that you get what you paid for was true in this case.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

Rupert
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Re: Estate Planning Nightmare

Post by Rupert » Fri Feb 08, 2019 10:50 am

FBN2014 wrote:
Fri Feb 08, 2019 10:37 am
Rupert wrote:
Fri Feb 08, 2019 10:31 am
I'm sorry you had a bad experience. But he's perhaps done you a favor by terminating the relationship and refunding your fee. Maybe he was over his head.

How did you find this attorney? Does he work in a firm, or is he a solo practitioner? Does he hold himself out as an estate planning expert, or is he a sort of general practitioner who just does a bit of estate planning?
He answered a question I posted on Avvo. He gave a very good answer. I followed that up with a phone conversation and email exchanges. His practice is limited to estate planning. Lastly his fee was very reasonable compared to others. I guess the old adage that you get what you paid for was true in this case.
Finding a good lawyer can be difficult. So don't beat yourself up over it. Word of mouth (referrals from other lawyers you know, even non-estate-planning lawyers, are usually best) is still the best way to find a good one in most communities. Personally, I'd choose someone practicing in an established estate planning firm.

fourwheelcycle
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Re: Estate Planning Nightmare

Post by fourwheelcycle » Fri Feb 08, 2019 11:44 am

The best I can say is you did receive your money back. You spent a lot of time on the process to date, but you can count that as valuable education, both on the wording you want in your ultimate estate documents and on how to select and arrange financial understandings with your next estate attorney.

My wife and I were fortunate to find a very qualified attorney about the same age as us back in the late 1980s. He did our first estate documents (wills) when our children were in elementary school, then an update (individual revocable trusts) when our children were out of college, and a new will for my elderly aunt when I became her POA. For every round of work he estimated a price in advance, did not ask for any deposit, and sent me a bill very close to his estimate when the work was done.

A few years ago we asked him to prepare a complete new set of estate documents based on a joint revocable trust, with our now mid-thirties and married sons as successor trustees. As before, he estimated a price in advance and did not ask for a deposit. When the work was done he sent me a bill that was $1K higher than his estimate. I asked him why his bill was higher and he said he had never had a client ask so many questions about each draft of a JRT.

I had to admit during previous rounds I pretty much accepted whatever he drafted, but this time I was very engaged in learning about, and asking about, all the provisions that could be included in a JRT.

I did not tell him I had recently joined this forum and I was getting a lot of my questions from BH.org!

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Re: Estate Planning Nightmare

Post by Jimmie » Fri Feb 08, 2019 11:44 am

RickBoglehead wrote:
Fri Feb 08, 2019 10:26 am
First, "I thoroughly research the topic and the attorney that I engage". That's crucial, IMO. People often have no clue what they need or why. Education prior to retaining an attorney, and researching the attorney, is very important.
+1 to your entire reply

However, particularly in the above part of your response, we should also be able to substitute any of these terms for "attorney" before we feel comfortable engaging in ANY service: doctor, dentist, accountant, plumber, contractor, etc. I would never trust an attorney with whom I did not perform my due diligence in choosing.

TRUE STORY: I need to have my will changed before I retire. I was surprised to find out that the trusted attorney that was my parent's attorney and filed my current will 25 years ago was still in practice. I had assumed he retired. I will see him soon. Bless his 75 year-old heart.

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Re: Estate Planning Nightmare

Post by RickBoglehead » Fri Feb 08, 2019 12:07 pm

Jimmie wrote:
Fri Feb 08, 2019 11:44 am
RickBoglehead wrote:
Fri Feb 08, 2019 10:26 am
First, "I thoroughly research the topic and the attorney that I engage". That's crucial, IMO. People often have no clue what they need or why. Education prior to retaining an attorney, and researching the attorney, is very important.
+1 to your entire reply

However, particularly in the above part of your response, we should also be able to substitute any of these terms for "attorney" before we feel comfortable engaging in ANY service: doctor, dentist, accountant, plumber, contractor, etc. I would never trust an attorney with whom I did not perform my due diligence in choosing.

TRUE STORY: I need to have my will changed before I retire. I was surprised to find out that the trusted attorney that was my parent's attorney and filed my current will 25 years ago was still in practice. I had assumed he retired. I will see him soon. Bless his 75 year-old heart.
Totally agree. I said so on another thread.
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FBN2014
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Re: Estate Planning Nightmare

Post by FBN2014 » Fri Feb 08, 2019 12:12 pm

Would be interested in bsteiner's input on how to properly vet an estate planning attorney.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

Old Sage(brush)
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by Old Sage(brush) » Fri Feb 08, 2019 3:51 pm

If this happened to me, I'd just be glad I got my money back, and go find another estate attorney. I would not use the documents delivered by the departing attorney until they were reviewed by my new attorney. If you are not an estate attorney, how would you know if the documents are "good" - that goes even if you're an attorney, because estate work is so specialized. As for finding a good estate attorney, I'd ask around, ask people in your network, and get a referral. Then meet, like someone else here said (shouldn't be a charge for an initial consult) to see if you can work with the new attorney.

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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by Dottie57 » Fri Feb 08, 2019 4:12 pm

I went with an attorney who had price list for estate planning. In the first free meeting what I wanted to do was discussed and agreed on. Second meeting she presented a contract , we went point by point. i signed and made first payment. Good discussions ensued. Process took about 5 meetings. I finished paying at last meeting. I was happy.

Get everything you want detailed in a contract. Don’t pay the whole shebang until you have satisfactory documents.

Good luck.

FoolMeOnce
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by FoolMeOnce » Fri Feb 08, 2019 4:49 pm

This does not sound like much of a "nightmare" to me. The attorney met with you, prepared drafts, answered some but not all of your questions, then realized he was either a bit in over his head or was simply going to require far more time working for you than what he had quoted, so he gave you all your money back, including the supposedly non-refundable deposit.

Frankly, the attorney is probably telling his colleagues about his "nightmare" client he recently worked with. Flushed 13.5 billable hours down the toilet!

It just didn't work out, and you are both better off finding someone else.

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Doom&Gloom
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by Doom&Gloom » Fri Feb 08, 2019 5:25 pm

Doesn't sound like a nightmare at all to me. It sounds more like an inconvenient relief and possible avoidance of a true nightmare.

Agree with the advice of others. Live, learn, and move forward.

simas
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by simas » Sat Feb 09, 2019 9:35 am

FBN2014 wrote:
Fri Feb 08, 2019 10:00 am
not all that complicated
I do not have estate planning comments (really need to get on the ball and get that rolling for us as we are both in 40s now with children and 7 digit portfolios)..

However the 'not all that complicated' thing made me laugh as I do consulting and when I usually hear this it means exactly the opposite which to me as professional results in
- Run! (walk away from the client . ' I am sorry can not take on you right now blah-blah-blah. may be someone else would be willing to review your needs)
- time and materials SoW only with VERY clear spelling of what client is getting and any/every follow up work to 'clarify' , 'explain' is that follow up work therefore additional charge.

there is a group of "clients" in my business that are fooling themselves thinking they are using their time/resources efficiently by
- trying to hire as cheap as possible and especially trying to go for fix bid
- trying to present their needs as fitting that fix bid model when they are clearly not
- having very unreasonable expectations

as results, such 'clients' bounce around, get burned as no one wants to take their business at all ('what do you mean you can not tell me of all of the problems I have in my IT infrastructure in two days?? you are charging X per hour!' 'dear client, any consulting company is going to spend _weeks_ just reviewing your infrastructure of significant size, its logs, its configurations, operational state, performance, before any form of recommendations/fixed could truly be developed).


at the end such 'clients' curse under their breath and end up hiring something just to be cheap, ending paying significantly more, take longer, get less back, and generally be pretty unhappy with experience.. However, the root cause of this was the bad case of expectations mismatch - I never seen " not that complicated" work well with any form of fixed bid. the need either fits the use case or it does not, if it does not - this is not the right arrangement for you and it is my duty to advice you on that..

student
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by student » Sat Feb 09, 2019 9:49 am

I agree with those who said this is not a nightmare. You received a refund and you have learned something in the process. I think the lawyer acted ethically. (He may or may not be a good lawyer.)

letsgobobby
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by letsgobobby » Sat Feb 09, 2019 10:11 am

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FBN2014
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by FBN2014 » Sat Feb 09, 2019 11:55 am

What questions should I ask other attorneys when I interview them to do the estate plan so I don't have this problem again?
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

letsgobobby
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by letsgobobby » Sat Feb 09, 2019 2:10 pm

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bsteiner
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Re: Estate Planning Nightmare

Post by bsteiner » Sat Feb 09, 2019 8:11 pm

FBN2014 wrote:
Fri Feb 08, 2019 12:12 pm
Would be interested in bsteiner's input on how to properly vet an estate planning attorney.
Like any other service, you can ask appropriate people for recommendations.

When you have some names, you can check their bios on their websites, as well as what their firms focus on. That should give you a sense of who's likely to be appropriate. Writing for a professional journal counts for more than writing for the local weekly newspaper. Speaking for bar association continuing legal education seminars counts for more than speaking at the local senior center. You can check their ratings on martindale.com, which are based on peer reviews and can't be gamed.

This situation involved a fixed fee mater. While we've taken some fixed fee matters, there's a greater chance they won't go well. It's often hard to estimate the cost of a matter since the cost of the same matter can vary considerably from one client to another; and issues often arise during the course of a matter that weren't initially anticipated.

The special needs grandson shouldn't significantly affect the cost. A large percentage of clients have a child or grandchild with special needs.

Dealing with the trusts already created by the initial poster's parents for his/her brother of which his/her children are remainder beneficiaries should be a routine matter for a good trusts and estates lawyer. However, it will more than double the scope of the matter. If the trusts are well-drafted, the brother will have a power of appointment, which he can exercise (which means dealing with the brother and preparing a Will for the brother exercising the power of appointment). If the brother doesn't have a power of appointment, then the lawyer will have to review the trusts to see if they can be decanted (transferred to new trusts with more appropriate terms), and then decant the trust. This will require coordinating with the trustees and preparing the new trusts and the decanting documents. If they can't be decanted, then the lawyer will have to consider whether it's feasible to ask the court to modify the trusts.
RickBoglehead wrote:
Fri Feb 08, 2019 10:26 am
...
My personal barometer is to request a 15 minute initial meeting from any professional, at no charge. If they aren't willing to do that, I don't proceed further.
That's fair. If you're not a fit for each other, you should both know it within 15 minutes. We can often screen out prospective clients who won't be a good fit on the initial phone call and avoid the need for a meeting.
FBN2014 wrote:
Sat Feb 09, 2019 11:55 am
What questions should I ask other attorneys when I interview them to do the estate plan so I don't have this problem again?
You should have already done your research by checking the lawyer's bio and his/her firm's website. That should give you a sense of the lawyer and the law firm. When you come in, the lawyer will be the one asking you questions to find out about the people, the assets, and your objectives, so he/she can recommend how best to accomplish your objectives.

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FBN2014
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Re: Estate Planning Nightmare

Post by FBN2014 » Sat Feb 09, 2019 8:58 pm

bsteiner wrote:
Sat Feb 09, 2019 8:11 pm
FBN2014 wrote:
Fri Feb 08, 2019 12:12 pm
Would be interested in bsteiner's input on how to properly vet an estate planning attorney.
Like any other service, you can ask appropriate people for recommendations.

When you have some names, you can check their bios on their websites, as well as what their firms focus on. That should give you a sense of who's likely to be appropriate. Writing for a professional journal counts for more than writing for the local weekly newspaper. Speaking for bar association continuing legal education seminars counts for more than speaking at the local senior center. You can check their ratings on martindale.com, which are based on peer reviews and can't be gamed.

This situation involved a fixed fee mater. While we've taken some fixed fee matters, there's a greater chance they won't go well. It's often hard to estimate the cost of a matter since the cost of the same matter can vary considerably from one client to another; and issues often arise during the course of a matter that weren't initially anticipated.

The special needs grandson shouldn't significantly affect the cost. A large percentage of clients have a child or grandchild with special needs.

Dealing with the trusts already created by the initial poster's parents for his/her brother of which his/her children are remainder beneficiaries should be a routine matter for a good trusts and estates lawyer. However, it will more than double the scope of the matter. If the trusts are well-drafted, the brother will have a power of appointment, which he can exercise (which means dealing with the brother and preparing a Will for the brother exercising the power of appointment). If the brother doesn't have a power of appointment, then the lawyer will have to review the trusts to see if they can be decanted (transferred to new trusts with more appropriate terms), and then decant the trust. This will require coordinating with the trustees and preparing the new trusts and the decanting documents. If they can't be decanted, then the lawyer will have to consider whether it's feasible to ask the court to modify the trusts.
RickBoglehead wrote:
Fri Feb 08, 2019 10:26 am
...
My personal barometer is to request a 15 minute initial meeting from any professional, at no charge. If they aren't willing to do that, I don't proceed further.
That's fair. If you're not a fit for each other, you should both know it within 15 minutes. We can often screen out prospective clients who won't be a good fit on the initial phone call and avoid the need for a meeting.
FBN2014 wrote:
Sat Feb 09, 2019 11:55 am
What questions should I ask other attorneys when I interview them to do the estate plan so I don't have this problem again?
You should have already done your research by checking the lawyer's bio and his/her firm's website. That should give you a sense of the lawyer and the law firm. When you come in, the lawyer will be the one asking you questions to find out about the people, the assets, and your objectives, so he/she can recommend how best to accomplish your objectives.
Excellent points as always Mr. Steiner especially about the possibility of decanting my brother's trusts for when my children inherit. Those trusts have a Massachusetts situs while I am a North Carolina resident as are my children. My brother does not have a power of appointment. This was one of the problems that I had with the attorney as he did not seem to understand how to address the issue although I discussed it's importance at the initial meeting and provided him with copies of the trusts. I expressed that I did not want to create an unwieldy estate plan for my children with multiple trusts and administration headaches in the future. I told him I wanted their inheritance to be protected from my children's possible creditors and from their spouses in the event of divorce. I am aware of the concept of decanting and brought it up in the initial meeting and asked about the possibility of merging my brother's trusts with our trusts when my children become the beneficiaries. My layman's review of the documents he created did not address any of this and his response was that he was unfamiliar with Massachusetts law. I believe going forward I will need to use an attorney who would coordinate with a Massachusetts attorney to address these issues.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

J295
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Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by J295 » Sat Feb 09, 2019 9:05 pm

Engage ACTEC lawyer who is Matindale AV rated with a strong referral from a reliable source.

bsteiner
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Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Estate Planning Nightmare

Post by bsteiner » Sat Feb 09, 2019 9:47 pm

FBN2014 wrote:
Sat Feb 09, 2019 8:58 pm
...
Excellent points as always Mr. Steiner especially about the possibility of decanting my brother's trusts for when my children inherit. Those trusts have a Massachusetts situs while I am a North Carolina resident as are my children. My brother does not have a power of appointment. This was one of the problems that I had with the attorney as he did not seem to understand how to address the issue although I discussed it's importance at the initial meeting and provided him with copies of the trusts. I expressed that I did not want to create an unwieldy estate plan for my children with multiple trusts and administration headaches in the future. I told him I wanted their inheritance to be protected from my children's possible creditors and from their spouses in the event of divorce. I am aware of the concept of decanting and brought it up in the initial meeting and asked about the possibility of merging my brother's trusts with our trusts when my children become the beneficiaries. My layman's review of the documents he created did not address any of this and his response was that he was unfamiliar with Massachusetts law. I believe going forward I will need to use an attorney who would coordinate with a Massachusetts attorney to address these issues.
You and he are both making this more complicated than it is.

Providing for your children in trust rather than outright to protect against creditors and spouses should be routine. Almost all of our clients do this.

Massachusetts doesn't have a decanting statute but it has some case law on common law decanting. If the trustees have complete discretion to distribute principal (which if the trusts are well-drafted they would have, but then again if they were well drafted your brother would have powers of appointment) they may be willing to decant under common law. If not, or if the trustees won't decant without a statute, it's not hard to bring in a trustee in another state where the statute permits decanting without full discretion to distribute principal.

If it makes sense to combine multiple trusts for the same beneficiary, the trustees should be able to do that. But sometimes it's better not to combine trusts, for example if they have different GST taxable/exempt status, or different perpetuities periods (Massachusetts limits a trust to lives in being at the inception plus 21 years, or about 90 to 100 years, whereas North Carolina has repealed its rule against perpetuities so a trust can last forever), or if they're subject to state income tax in different states (Massachusetts basically looks at the residence of the grantor or testator, whereas it almost seems like if a beneficiary's cousin changed planes in Charlotte then North Carolina will tax the trust). It's probably simplest to deal with that after your death.

Probate in North Carolina isn't difficult, so most likely you don't need a revocable trust. But if there's some reason you do, since North Carolina isn't a community property state, you and your spouse would have separate ones. There's a probate court fee of 0.4% with a maximum of $6,000, so it's trivial as a dollar amount for very small estates and trivial as a percentage for large estates, but annoying for the proverbial $1.5 million estate.

Horsefly
Posts: 508
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by Horsefly » Sat Feb 09, 2019 10:11 pm

In early 2013 we went to an estate attorney that sounds much like the OPs. She assured us that she would walk us through the process, customize the estate documents to address any particulars that we had, and seemed very personable when we first met. She wanted a relatively fixed fee to draw everything up, and wanted us to sign up for some kind of subscription with her (an annual fee) to provide ongoing updates and amendments as needed. I should have balked when she wanted the payment mid-way, before we had seen and understood the final documents. As we called to try and make sure she was specifically addressing some of the unique items we had, she never would even return the call. She was supposed to put in all the paperwork to move our home, bank accounts, and taxable investments to the revocable trust, but in the end she only moved the home - we had to do the rest. Eventually we had to practically threaten her to get our remaining documents. Thank goodness we didn't sign up for her subscription service.

Fast forward to now. Someone recommended another attorney, so I sat down and met with her. It was clear from the start that her main goal was to make sure we understood and were happy with everything. She spent 1.5 hours in a free initial consultation just to understand what we had and to get from us what our concerns were. A couple of times she said something like "you don't really need what was done by the other attorney, but it doesn't cause any harm and it would be cheaper to leave it the same with only a few changes." She was willing to do more if we wanted, but was honest to avoid charging us needlessly.

As others (including bsteiner) have said: Get referrals from people you trust. Speak with the person and get a good feel for how they will interact with you before you commit to them.

Topic Author
FBN2014
Posts: 678
Joined: Sat Mar 08, 2014 3:07 pm

Re: Estate Planning Nightmare

Post by FBN2014 » Sat Feb 09, 2019 10:25 pm

bsteiner wrote:
Sat Feb 09, 2019 9:47 pm
FBN2014 wrote:
Sat Feb 09, 2019 8:58 pm
...
Excellent points as always Mr. Steiner especially about the possibility of decanting my brother's trusts for when my children inherit. Those trusts have a Massachusetts situs while I am a North Carolina resident as are my children. My brother does not have a power of appointment. This was one of the problems that I had with the attorney as he did not seem to understand how to address the issue although I discussed it's importance at the initial meeting and provided him with copies of the trusts. I expressed that I did not want to create an unwieldy estate plan for my children with multiple trusts and administration headaches in the future. I told him I wanted their inheritance to be protected from my children's possible creditors and from their spouses in the event of divorce. I am aware of the concept of decanting and brought it up in the initial meeting and asked about the possibility of merging my brother's trusts with our trusts when my children become the beneficiaries. My layman's review of the documents he created did not address any of this and his response was that he was unfamiliar with Massachusetts law. I believe going forward I will need to use an attorney who would coordinate with a Massachusetts attorney to address these issues.
You and he are both making this more complicated than it is.

Providing for your children in trust rather than outright to protect against creditors and spouses should be routine. Almost all of our clients do this.

Massachusetts doesn't have a decanting statute but it has some case law on common law decanting. If the trustees have complete discretion to distribute principal (which if the trusts are well-drafted they would have, but then again if they were well drafted your brother would have powers of appointment) they may be willing to decant under common law. If not, or if the trustees won't decant without a statute, it's not hard to bring in a trustee in another state where the statute permits decanting without full discretion to distribute principal.

If it makes sense to combine multiple trusts for the same beneficiary, the trustees should be able to do that. But sometimes it's better not to combine trusts, for example if they have different GST taxable/exempt status, or different perpetuities periods (Massachusetts limits a trust to lives in being at the inception plus 21 years, or about 90 to 100 years, whereas North Carolina has repealed its rule against perpetuities so a trust can last forever), or if they're subject to state income tax in different states (Massachusetts basically looks at the residence of the grantor or testator, whereas it almost seems like if a beneficiary's cousin changed planes in Charlotte then North Carolina will tax the trust). It's probably simplest to deal with that after your death.

Probate in North Carolina isn't difficult, so most likely you don't need a revocable trust. But if there's some reason you do, since North Carolina isn't a community property state, you and your spouse would have separate ones. There's a probate court fee of 0.4% with a maximum of $6,000, so it's trivial as a dollar amount for very small estates and trivial as a percentage for large estates, but annoying for the proverbial $1.5 million estate.
Since I am my brother's trustee and I have full discretion to make distributions there will be no problem there. There was a power of appointment in the original trusts but that was removed by my father before his death due to my brother's financial irresponsibility, 3 marriages, and a bankruptcy. My brother is childless and my father wanted to ensure that his estate remained in his bloodline rather than giving my brother the opportunity to give it to the latest girlfriend or spouse.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

bsteiner
Posts: 4417
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Estate Planning Nightmare

Post by bsteiner » Sat Feb 09, 2019 11:21 pm

FBN2014 wrote:
Sat Feb 09, 2019 10:25 pm
...
Since I am my brother's trustee and I have full discretion to make distributions there will be no problem there. There was a power of appointment in the original trusts but that was removed by my father before his death due to my brother's financial irresponsibility, 3 marriages, and a bankruptcy. My brother is childless and my father wanted to ensure that his estate remained in his bloodline rather than giving my brother the opportunity to give it to the latest girlfriend or spouse.
Your father could have given your brother a power of appointment exercisable only in favor of your father's issue (other than your brother). That way he could have appointed it to your issue equally or unequally, outright or in trust, or in trusts with different terms for different people. You can probably get where you want by decanting, but this would have been easier.

JBTX
Posts: 5557
Joined: Wed Jul 26, 2017 12:46 pm

Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by JBTX » Sun Feb 10, 2019 12:59 am

For somebody like B Steiner this is pretty routine stuff, but for those of us lacking a legal background and getting differing opinions it can be daunting. Years ago we had estate planning documents done, and frankly while I did ask some questions I really didn't know enough what to ask. In the last couple of years I started researching some things more, started thinking more about our special needs kids situation, and I talked to a different source and they recommended a significantly different setup. After some further research, follow up questions with existing attorney (which they answered free of charge) and some questions in this forum, while I know more I'm still not decided what ultimately I'll do. I think for now what we have is "good enough" for now but ultimately I may change it using an attorney with a little more experience in integrating special needs planning.

I will say that there is a lot of "boiler plate" language in the documents, and while annoying I didn't really care that much. I was most concerned about the language in specific sections that I deemed most applicable.

Sounds like your attorney was pretty busy and wasn't used to clients asking a lot of questions.

The attorney I have actually will respond to emails. What I try to do is when I have a question, learn as much as I can before asking the question, so the question is more direct and to the point and applicable.

Good luck. The fact that he refunded your money means at least he was straight up enough acknowledge it wasn't a good fit.

afan
Posts: 4408
Joined: Sun Jul 25, 2010 4:01 pm

Re: Estate Planning Nightmare [Problem with estate planning attorney]

Post by afan » Sun Feb 10, 2019 7:03 pm

I agree that you got off easy, without having to fight to get your money back.
But it seems clear that the attorney was not qualified to be doing estate planning work.
he sends me an email last week stating that his documents contain language that applies to most clients but may not necessarily apply to us since this is part of the efficiencies built into his practice to keep fees low
This is beyond alarming. It is unbelievable. He leaves inappropriate language in the documents because it would be too much trouble to take it out????? This tells me that he is simply copying someone else's documents and plugging in names to sell the same work to you. You want nothing to do with such a person.

Bsteiner has given more extensive advice about finding a good attorney. You may want to search his posts. He has agreed that good recommendations, ACTEC fellow and martindale rating indicate that the attorney is knowledgeable.

I believe he has suggested that a partner in a large estate planning division of a big law firm is usually safe, since the structure of the business ensures that those people know what they are doing and deliver reliable results. This can be an expensive approach, particularly if it is a big city big firm.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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