Estate Planning can be a complicated area of law to navigate if you don’t do it every day, but it shouldn’t be overly complicated on your part. This becomes important all of the time but especially this time of year when people are trying to check “estate planning” off their list of New Year’s resolutions. To keep things super simple, I have outlined five basic steps to getting started on a first plan, or a major renovation, that shouldn’t be overly taxing on the client’s part while leaving the complicated details to the attorney to figure out.
Step 1: Do Your Homework
Understanding the basics of estate planning, the potential problems of not planning, and what the different documents do. One of the easiest ways to get a good overview of these items without feeling like you’re cramming for a Chemistry 301 final is through my book Estate Planning Basics: A Simple, Plain English Guide to Estate Planning Concepts. It’s only eighty pages long, and, as the title suggests, it is written in plain English making it a quick and easy read. This book (really “booklet”) is part of my office’s pre-appointment packet we send to clients before their Estate Strategy Session, and the book is mandatory reading so my clients come in ready to talk about their goals rather than discussing what basic documents do. In addition, the book is available as a paid audiobook podcast on podbean.com.
Step 2: Gather Basic Information
Getting your basic personal and asset information together and written down in one place can be extremely helpful in moving the process along because you won’t have to either 1) go back to the attorney with missing information nor 2) waste time in your Estate Strategy Session having the attorney address the missing information rather than discussing your goals and developing a plan.
Here are the main types of information usually required by law firms prior to the first meeting:
•Names, addresses, phone & email contact, and date of birth information for you, any spouse or partner you may have, and any children
•Rough estimates of values for bank, stock, real estate, retirement accounts, and life insurance (since these totals can impact taxes)
•The importance of certain typical estate goals, such as avoiding probate, ensuring the avoidance of unnecessary taxes, and more.
All of this main information is part of my law office’s questionnaire included in the same pre-appointment packet we send out along with the book Estate Planning Basics. Most law firms have their own questionnaires of varying detail depending on the attorney or law firm, and having this information ahead of time usually makes the Estate Strategy Session run much more quickly and smoothly.
Step 3: Envision Your Outcome and Establish Your Goals
Once you have done your research and compiled your basic information, it’s time to think about exactly what kind of outcomes you want and goals you want to reach. However, simply stating that you want certain legal documents enacted is not a goal; documents are only tools to help you reach your goals. Some typical goals our clients identify are “making sure their beneficiaries inherit their estate with as little bureaucracy as possible,” or “ensuring their children don’t inherit an estate when they are too young,” or even “keeping the government out of my estate as much as possible.” In the end, the majority of our clients cite wanting “peace of mind” that their plan is in place and they don’t need to worry about not having anything in place.
Step 4: Think About Responsible People You Trust
While what you want to have happen is a critical part of estate planning, who you want carrying out your wishes is also important. It is not enough to spell out how assets are distributed, various health care treatment choices, and body disposition options. You also have to choose people to carry out these tasks.I once had a client who didn’t want to come up with the names of people he would rely on to handle various financial and medical decisions, mainly because he didn’t have too many trusted people in his life. Our conversation went something like this:
Client: “If Donald Trump is in his office and he says he wants a ham sandwich, he just gets a ham sandwich, right?”
[Note this was well before Donald Trump was President and during the first few seasons of The Apprentice].
Me: “Says it to who?”
Client: “What do you mean?”
Me: “Who does he tell he wants a ham sandwich?”
Client: “What does that have to do with anything?”
Me: “It doesn’t matter how rich or powerful Donald Trump is. If he stands in the middle of an empty office and declares he wants a ham sandwich, it isn’t going to magically appear on his desk. He needs to actually tell someone who will take on the responsibility of getting him the ham sandwich.Who is getting you your ham sandwich?”
When I meet with clients in an Estate Strategy Session, I have more specific questions to help guide finding the right people for various positions in an estate plan. No one should ever think they need to already have firm lists for trustees, health care agents, etc; part of my value to my clients as an attorney with more than twenty-five years of experience is I am able to discuss the pros and cons of various people in various positions and how other clients have handled these decisions during the Estate Strategy Session. Without trying to project too far ahead and make firm choices before meeting with an attorney, thinking about the people in your life you trust is a good start in the process.
Step 5: Meet with an Attorney to Get Things Going
Once you have gotten a basic background in estate planning, organized personal information, and thought about your planning goals and the people in your life you trust, it is now time to meet with an estate planning attorney. Handling steps one through four before meeting with an estate planning attorney has several benefits:
•Since you are armed with basic estate planning information, you are not wasting the first appointment discussing the differences between a Will and a Trust, what is involved in the probate court process, and why you should have a health care and durable general power of attorney. Instead, you can jump right into discussing your goals and formulating a strategy.
•Since you compiled your basic personal information, time isn’t being wasted with the attorney or their staff writing down this information. (My office typically schedules an hour and a half for an Estate Strategy Session, and these first appointments typically use all of that time. If twenty minutes of that appointment is wasted because the questionnaire wasn’t completely filled out, then there is typically no way to proceed without a second strategy appointment that is paid by the hour at the full hourly rate.)
•Since you’ve thought about the goals you want to achieve as well as having some idea about the people in your life you trust, developing a general estate strategy and coming up with the names of trusted people to help carry things out if disaster strikes doesn’t bring the process to a halt by looking at these issues “out of left field” during the first meeting.
Unless your goals and objectives are extremely complicated and convoluted, a good estate planning attorney should be able to lay out a preliminary strategy, have enough information to get started, and provide at least a specific range of fees. Our office very typically can provide a flat rate fee, and we have standard planning “packages” that can be modified if additional elements are needed. One note is that some clients expect to have a free initial meeting. We used to offer free Estate Strategy Sessions for potential clients if they did their homework of reading Estate Planning Basics and filling out their questionnaire and turning it in ahead of their appointment, but we were finding that too many people were not doing their part and just showing up or cancelling at the last minute, and rarely did the people who didn’t do their homework become clients. Because of this shift, we now offer a discounted flat rate for an Estate Strategy Session, and any money paid for the session is applied to legal work done if they become clients.
As we begin a new year, many people are committing to their New Year’s resolutions, including putting together or overhauling their estate plan. Hopefully this Keep It Super Simple process can help people more easily check that item off their list in a relatively short period of time. If you do already have your plan in place, then please share this with someone who could benefit from it, and good luck with your own goals!