Complex Estate Plans: A Process

Estate planning can be a complex process for families with substantial assets or special needs to address. It involves assembling a complete understanding about a client’s family, all significant assets and liabilities, as well as any particular estate planning concerns and objectives. We will provide tax planning advice as an overlay to these basic findings and develop appropriate strategies and documents to accomplish the client’s comprehensive objectives. It is useful to think of it as a process that might evolve as a family’s circumstances (and the pertinent tax rules) develop and change. The process of developing an estate plan varies, but a typical process might include the following steps.

We typically begin the process by having our clients complete an Estate Planning Questionnaire and, if possible, send it to us a few days before our initial meeting. Alternatively, many clients simply bring the completed questionnaire to the first meeting, and that provides an element of efficiency as well. This gives us a chance to familiarize ourselves with a client’s financial and family situation, so that we can focus on the really important things as soon as our very first meeting: listening carefully to understand and to help our clients articulate their long-term goals, family concerns, charitable interests, and tax planning objectives with regard to the disposition of their property. Such discussions enable us to recommend appropriate strategies and help our clients formulate an overall plan best suited to achieve client objectives and reduce taxes. This may include the re-titling of certain assets to optimize the tax results, the preparation of Wills and Trusts (both revocable and irrevocable), as well as updated beneficiary designations for life insurance, annuities, and retirement plan assets, and Powers of Attorney and Health Care Directives to designate one or more agents to act on a client’s behalf in the event of a significant incapacity or impairment.

Either before creating drafts or when drafts of new documents are sent to a client, we typically develop a “plain English” summary of the key provisions of the proposed estate planning documents, to assist with the review of the documents themselves and pinpoint any decisions that are under consideration, including the choice of fiduciaries, ages for distributions, and the duration and distribution standards of trusts. We may also create a detailed flow chart to help clients and their other advisors understand the basic flow of the plan. We might follow up with a scheduled telephone consultation or meeting to address any questions our clients might have, discuss any revisions that might be needed, and review again the tax planning elements embodied in the estate plan if that is necessary. The documents are then finalized and sent to our clients for final approval. When the clients understand the documents and feel comfortable that the documents meet their objectives, we then make arrangements to have the documents signed in the presence of disinterested witnesses and a notary public. After the documents have been signed and notarized, items such as beneficiary designations are filed with the insurance companies and retirement plan administrators, deeds (if any) are sent to the registry for recording, and the originals of the Wills and Trusts, and one original of each Power of Attorney and Health Care Directive, are placed in our law firm vault for safekeeping, unless the client chooses to make other arrangements for original documents. A documents package binder is sent to each client containing a complete copy of every signed document. We recommend that clients review these documents whenever there is a change in their circumstances (either financial or personal) or a significant change in the tax laws that might warrant a change in the documents, and at least every five years.

A basic Will, Trust, Power of Attorney, and Health Care Advance Directive or health care proxy are the foundation documents of most complex plans. After the foundation documents are created, many clients take additional steps to further their planning. In those cases, we work with our clients to develop and implement programs of planned gifts to family members, and/or sophisticated charitable giving which often involves the use of trusts to achieve long-term objectives.

Our paramount goals in the estate planning process are to listen carefully to what our clients are saying, to assist them in identifying their goals regarding wealth transfer and management, and to work with them to develop effective strategies and appropriate documentation to accomplish those goals.