Tips for estate planners

By Ralph F. Holmes

The Daily Record Newswire

The last thing you want as an estate planner is to take the stand to explain why a will or trust you drafted years, maybe even decades, ago should be upheld. Memories have faded. Your paralegals or secretaries who met with the client to attest to his signature likely have little to no memory of the document, or worse, have retired or moved to parts unknown.

You may well be the sole witness who can speak to the client's affect, his knowledge of his wealth and relatives, and his intent to carry out the document's dispositional scheme. Will you be up for the challenge?

In my experience, the drafting attorney is almost always the most important witness in a trust or will contest. In one of my cases, the lawyer conceded that he could not say whether his client with dementia knew the nature and extent of her wealth.

In another case, the lawyer conceded that he did not know whether his client with dementia appreciated that his wife was deceased (nursing home records documented intermittent confusion on this important point).

In my last trial, the attorney (a solicitor in London) meticulously explained how her 91-year-old client demonstrated knowledge of her wealth, relatives and reasons for disinheriting her sons in favor of her daughter, my client.

In each case, the testimony of the drafting attorney was critical.

Drawing on these and other experiences, I offer the following as some tips for estate planners:

Family pathology is a key predictor of litigation.

If you are an experienced estate planner, you know that family rivalries and resentments can propel probate litigation to Jarndyce and Jarndyce proportions.

Although perhaps obvious, this most important lesson is often unheeded. If you identify up front which families are likely to end up in court, you can increase your diligence in those situations to try to ensure that your plan is not challenged and, if it is, that it is upheld.

Certain family dynamics recur in these cases. The children versus stepmother scenario commonly plays itself out in court. This is not a sexist slur: Men are more likely to have wealth; women tend to outlive men; and some men re-marry late in life younger women.

When dad dies leaving much of his estate to his second or third wife who is disliked by his children, litigation is likely. The challenge by the son of Howard Marshall to his will benefiting Anna Nicole Smith is only the most famous of this all-too-common scenario.

The next most common dynamic is the fight among adult children who do not get along and where one child is disproportionately favored. If you are preparing a will or trust that benefits one child more than another, particularly if the children are estranged from each other, be prepared for a challenge.

Know who your client is.

Sounds simple, but in the estate planning area, this can be tricky. Lawyers who are not clear about whom they represent can get in trouble. I offer some examples from my cases:

An adult child asks a lawyer to prepare a durable power of attorney appointing the child agent for his parent. Who is the client: the parent or the child?

An adult child who is attorney-in-fact for his parent asks a lawyer to prepare a trust and other documents for the child to sign as agent. Who is the client: the parent or the child?

In each case, a child asks a lawyer to prepare an instrument to control the financial affairs of the parent, raising concerns of exploitation. You should always treat the principal (the parent), not the agent (the child), as the client and meet with the parent alone to make sure he or she is competent and truly desires what has been requested.

If you do this, you will help protect the parent from possible exploitation and yourself from a potential appearance in court.

Mental capacity is the critical issue in most will and trust contests.

Wills and trusts generally can be challenged on three grounds: lack of proper execution; undue influence; and lack of testamentary capacity.

The first ground is rarely raised. The second ground is difficult to establish absent proof of some mental incapacity because undue influence generally exists only if the testator was so dominated by the influence of another that the will or trust reflects the wishes of a third party. See Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456, 681 N.E.2d 1189 (1997). Only a mentally impaired person is likely to be so influenced.

This does not mean that cases will not be decided on undue influence grounds; rather, mental capacity will always be a critical issue.

Not all dementias are equal.

Some dementias are static; others are progressive. Be especially careful if your client has been diagnosed with an Alzheimer's type dementia because it is a question of not whether, but only when she will be incompetent.

Your estate plan may be challenged years later and viewed in the context of a relentless mental decline. Retrospectively placing the execution of your plan in this continuum may be difficult, especially if there is scant evidence in your file as to the client's functioning that day.

Meet with the client without other family members.

This is basic, good practice, but is not always followed.

An elderly client may be highly dependent on a child, including for food, shelter, transportation and other assistance. Insulate your communications with the client from this dependent relationship by meeting alone with and sending any mail to the client marked "Personal and Confidential."

Elicit information with non-leading, open-ended questions.

My medical expert in several trials has commented on the importance of eliciting without cues or prompting information from someone with dementia.

When you meet with the client, you may already have substantial information about her finances, family and affairs from your prior representation, financial or tax documents, or responses to your questionnaire.

To help assess the client's capacity, ask her open-ended questions, such as "What are the names and ages of your children?" "What do you have for wealth?" "What do you want your will to provide?" "Why do you want your will to say this?"

Evidence that your client was able to articulate coherent responses without cues or prompting will be helpful in defending your plan.

Assess for capacity again on the day the plan is signed.

Too often, will and trust execution is treated like a closing, an administrative event. For a client with dementia, capacity can fluctuate. The fact that the client did well in the estate planning conference is no guaranty that she will be capacitated when signing.

When you meet with her, ask her to remind you (without prompting or cuing) what the estate plan provides and why she chose this scheme. Also, through open-ended questions, verify again that she knows who her relatives are and the roles they play in her life and has an understanding of the nature and extent of her wealth.

Your notes or file memorandum will be important evidence.

When you take the stand, often years after the plan was prepared, you may have little memory of your interactions with the client. Your file will not only help refresh your recollection, it will be important evidence in its own right as contemporaneous documentation of your client's capacity and independence.

Take the time to document your interactions with your client carefully and thoroughly, particularly your client's knowledge of: the nature and extent of her wealth; the identity of her family members and the roles they play in her life; and the dispositional scheme of her estate plan and her rationale.

Consider asking the client to write a "letter of reasons."

In one of my cases, the estate planner asked her 91-year-old client to write a letter for the lawyer's file explaining why the client had decided to prefer in her estate plan one of her children over the rest. At trial, this "letter of reasons" was compelling evidence of the testator's capacity and independence.

If your client is treating her heirs unequally, consider asking her to write in her own handwriting such a letter. You may wish to explain to your client that the unequal treatment of heirs creates an increased risk of a challenge to the plan and her letter might help prevent such a challenge from occurring or succeeding.

If the client is able to coherently and articulately express in writing her reasons, the estate plan will have a significant bulwark from challenge. Of course, you need to be careful in the creation of evidence such as this. If the letter is incoherent or inarticulate, it may contribute to the invalidation of the plan.

Consider video-recording the client.

I have twice assisted estate planners in evaluating whether to record on video an interview of an estate planning client.

In one case, we decided against recording in light of the client's painfully slow speech pattern.

In another case, we recorded an interview at the time of plan execution and minutes following a forensic exam by a neurologist confirming the client's capacity. We were confident that the changes the client desired would be contested and, as a result, went to extraordinary lengths to create evidence to insulate the plan from challenge.

Consider a medical evaluation.

If your plan is challenged on grounds of incapacity, the contestant will procure your client's medical records and seek to engage medical experts. Generally, a contemporaneous exam carries much more weight than a retrospective assessment.

If a consult is desired, the choice typically will be between the family physician, who knows the client but may not be conversant with capacity standards or interested in serving as a witness, and a forensic neurologist or psychiatrist, who has no prior history with the client but is a skilled expert and witness.

Conclusion

The risk that you, as an estate planner, might one day have to take the stand to defend a will or trust you drafted is increasing due to a variety of demographic factors: We live longer, we get divorced more, and we have more wealth.

I have seen the discomfort of the estate planner under cross-examination. From my cases, I offer the tips above to help you avoid joining me in court or, if you do, have it be a less unsettling experience than it might otherwise be.

Some of the tips are simply good practice and should be followed generally. Others, such as video recording and medical evaluations, should be employed only when you conclude they make sense from a cost/benefit perspective -- with one of the "costs" being the risk that unfavorable evidence might result.

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Ralph F. Holmes is a probate litigator at McLane, Graf, Raulerson & Middleton, which has offices in Woburn and Manchester, N.H.

Published: Tue, Mar 27, 2012