Select Tools for Your Estate Planning Trade, Part 1
The year 2006 provides as much promise as any for discussing new and improved tools to help your estate planning practice. You might want to “trade up,” or “trade in,” your current software program for one of these applications. Or you might simply want to add another arrow to your planning quiver. In any case, you should explore some of these new and improved software programs that could help make 2006 your most productive, efficient year ever.
Wealth Transfer Planning
Wealth Transfer Planning (WTP) (www.ilsdocs.com), created by distinguished New York estate planning lawyer Jonathan G. Blattmachr more than a decade ago, now has become almost unrecognizable to users who have used the drafting system over the years. In late 2005, WTP unveiled a sophisticated, completely revised interface built on the stable HotDocs platform. Since then, WTP has added video tutorials with substantive coverage of various drafting and planning topics, even more document options, and integration with other estate planning software programs such as Brentmark’s Estate Planning Tools.
This editor wrote a comprehensive review of WTP’s new version, published in Law Office Computing’s eLOC (Mar. 2006) (www.lawofficecomputing. com/EDC/eloc/march06/reviews02. php), and is also finalizing a podcast about it for Leimberg Information Services, Inc. (LISI).
To highlight and expand on a few key points in those reviews, WTP now functions based on two expertly authored master components: (1) WTP templates, which are rich text format (RTF) files coded with all of the HotDocs language, variables, and rules that govern when language is included, and (2) WTP profiles, which are pre-answered sets of questions applicable to a particular document. These profiles make the drafting process a dramatically efficient one.
For example, choose one of eight “Revocable Trust” profiles—from “Outright to Spouse; Disclaimer Tax Planning” to “Three Trust Plan (Family Trust, Reverse QTIP, Marital Trust)”—or see all options by selecting the ninth profile, “All Options (no default answers).” Interestingly, all eight “profiles” point to and use the same base template. For HotDocs aficionados, these templates are also known as “pattern answer files.” Based on the profile chosen, WTP automatically selects the correct pattern answer file to achieve a particular result and then, completely transparent to the user, manages a complex series of steps known in HotDocs terminology as “overlays.” By managing template selection and overlays for the user, training time is reduced from a day or more to one hour!
The master templates and the master profiles are customizable, but, of course, the user should be cautious about doing so. Messrs. Blattmachr and Michael L. Graham, along with numerous leading practitioners, have developed this system and its master components. Even if the user customizes portions of the master components, the WTP system graciously provides “safeguards” to allow for updates and, if necessary, undoing part or all of the user’s customizations.
In this editor’s view, the advantages of the new version of WTP are (1) easy installation, (2) useful security and administrative settings, (3) stability of the new HotDocs platform, (4) a client-centric, intuitive approach to drafting and planning, (5) a robust offering of documents and techniques, (6) ample legal and technical guidance, (7) support for Word and WordPerfect (a rarity for an expert drafting system), and (8) free Internet-based training classes for WTP users.
The disadvantages of the new version of WTP are: (1) it is probably too advanced for a more general practitioner (which is a dangerous approach if doing any significant level of estate planning); (2) a general knowledge of HotDocs is required to customize templates or profiles; and (3) there is a risk of trying to customize too much (which can be controlled by the WTP administrator).
If you are planning to replace or even augment your current drafting system, the new version of WTP certainly deserves a look. A free “test drive” is available by contacting InterActive Legal Systems. Substantially discounted pricing is also available to members of local councils of the National Association of Estate Planners and Councils (NAEPC) (www.naepc.org/ member_services.web).
Gillett Estate Management Suite
The Gillett Estate Management Suite (GEMS) (www.gillettpublishing.com) represents one of the only remaining suites of programs that will not only handle federal estate and gift tax returns but also handle estate inventories and fiduciary accounting. As many estate planners know, a number of these programs have been acquired by major publishing houses. Based on most of the commentary and user feedback, however, GEMS promises to be a diamond in the rough for those searching for a solution to prepare these returns and fiduciary accountings.
Installing GEMS is an accurate indication of how intuitively and efficiently the entire GEMS system functions. Create a single return, say, a federal gift tax return, or use the entire system to integrate and coordinate the returns of the estate being handled. The user initially creates a data file. Then, after selecting that data file and opening it, GEMS guides the user through information entry for the particular case or matter.
The “Main Menu” displays each part of the return that the user is preparing. For example, if an estate tax return is being prepared, the first several pages require input of biographical and related information. Page one of the estate tax return asks questions about the decedent, including probate information for the particular estate. Page two requires information for the estate’s beneficiaries, including a surviving spouse’s information (if any) and information on each additional beneficiary of the estate.
After entering the basic information, the user proceeds to the schedules for that estate or gift tax return and simply selects the appropriate schedule and clicks the “Add Item” button. The GEMS system also allows the user to add, move, and augment the information for a specific item on a particular schedule.
The GEMS system includes its own word processor, which functions much like Word or WordPerfect (or any other standard word processing program). The traditional Windows commands and shortcuts also apply. For example, the user can find and replace information and use the Windows clipboard to copy and paste as well.
The GEMS system produces a number of reports in addition to the actual returns. For example, the estate tax return component produces a “Tax Calculation Summary.” The gift tax return component produces a reconciliation of the annual gift tax exclusion, the marital deduction, and/or the charitable gift tax deduction. Each component also prints a checklist to remind the user to attach the appropriate documents to the respective estate or gift tax return.
As mentioned, the estate tax component works seamlessly with the fiduciary accounting component of the GEMS system. The user can exchange information in either direction.
The GEMS system also handles state-level returns. This is especially important because of the decoupling of various states’ transfer tax systems and the introduction of a number of inheritance taxes. Please note, however, that New York is the only official state-level return available as of April 2006 and that California and New York are the only official accountings available. It is the editor’s hope that other states, such as Florida and Texas, will be added in the coming months.
A free trial version of GEMS, which is limited only in that it will not print the resulting reports and schedules, can be downloaded via the GEMS web site. A demonstration is also available for viewing on-line.
The March/April 2006 issue of this column did not include distinguished St. Louis estate planning lawyer Larry P. Katzenstein’s Tiger Tables calculation program (www.tigertables.com). Tiger Tables, which is used by the IRS, handles most types of estate planning calculations. In some respects, Tiger Tables is not as sophisticated as NumberCruncher or similar applications; it will not produce calculations in graphical format, for instance. Nevertheless, for crunching numbers, Tiger Tables is a valuable tool and is also very cost-effective.
In addition, Tiger Tables not only includes explanatory text for each calculation or technique, but it also includes links to Katzenstein’s superb outlines on particular techniques. For example, access his outline on “Running the Numbers: An Economic Analysis of GRATs and QPRTs” via the “Help” file for grantor-retained annuity trusts (GRATs). Tiger Tables also links to the Internal Revenue Code, Treasury Regulations, cases, rulings, and more.
As with most programs, a demonstration version of Tiger Tables can be downloaded via its web site. The only difference is that the applicable federal rate (AFR) is set at 10% and cannot be changed.
Wealth Transfer Planning, Gillett Estate Management Suite, and Tiger Tables represent a few of the excellent software programs available to help your clients, your staff/team, and you in your estate planning practice. As always, you can try any of these programs immediately via a download or by contacting the particular vendor at its official web site.
The November/December “Technology—Probate” column will conclude this two-part series by discussing a number of software programs that are not necessarily specific to estate planning but that can optimize your practice in terms of organization, communication, and mobility. Please stay tuned!