August 01, 2016 GP Mentor

GP Mentor: What I Wish I Had Known about Estate Planning

Sharon Anderson

In every field of law there are things that you don’t know until you’ve practiced for several years—things that law school, mentors, and colleagues can’t or won’t teach you. It’s no different with the practice of estate planning. Here are a few of the things I’ve learned after 20 years of practicing estate planning and probate—things that I wish someone would have told me (jump-starting my education and potentially saving me from some of those frustrating lessons).

Funding Is Everything

Funding, funding, funding. It’s the mantra of every estate planning attorney, yet so little time and attention are devoted to the how and why of trust funding. A lack of funding can make the best-drafted trust ineffective, while effective funding can turn an ordinary trust into the perfect conduit to transfer wealth. And while funding a trust may seem straightforward, it is often the transfer of unconventional assets, such as mineral or publication rights, digital assets, or corporate and LLC interests, that gets overlooked and will either make or break even the best-drafted estate plan.

One aspect of trust funding that new practitioners often overlook is the importance of staying in contact with clients after the plan has been completed. This can be as easy as a yearly telephone call or a more formal annual letter or meeting, but either way, it is imperative to develop an ongoing relationship with clients after their plan is complete. The implementation of this practice allows clients to communicate any changes in their estate or family situation with you on an ongoing basis, effectively keeping you in the loop to avoid any potential funding issues.

How does this translate to effectively serving clients? Checking in with clients annually or biannually allowed me to “catch” a newly acquired asset that wasn’t transferred into the trust, as well as a home that was pulled out of the trust, owing to refinancing, before any damage was done and a probate of that asset became necessary.

Communication Is Key

How you communicate with your clients is the best way to determine the success you will have in your estate planning practice and how effective you will be in managing your clients. It’s our job to be inquisitive—to inquire and question how clients envision the way their wealth, medical care, or remains will be managed either during illness or after death.

An effective estate planning attorney will not just ask clients how they want their wealth to be distributed upon their death or disability, but why they are choosing a particular distribution. Many times getting an in-depth rationale for clients’ particular distribution strategy results in a better understanding of their family dynamics and true wishes for their medical or financial needs, and always results in a better, more thoroughly written estate plan. Taking the time to get to know the reason why a client chose a particular medical agent or is leaving one child more than another not only develops a stronger attorney-client relationship but could prove invaluable in the event of a later trust or will contest.

In short: Thorough communication as to why clients are making their planning decisions, rather than just what those decisions are, has proven invaluable for me in helping my clients steer clear of unnecessary and potentially litigious distribution strategies.

Understanding Is the Foundation

One of the best ways to succeed in estate planning is the thorough, ongoing understanding of your clients, their wishes, and the extent and titling of their assets. Once you have built a solid foundation and established an effective stream of communication with your clients, you will be able to manage their estates efficiently and help their families navigate the management of their wealth upon their death.

How do you build this foundation? It all goes back to communication: Understand the whys of your client’s estate plan and, after the plan is drafted, follow up to ensure that any existing or new funding issues are addressed. Estate planning is all about thoroughly addressing your clients’ existing needs as well as anticipating future issues, and communication is the key to that level of client service. It’s also the main reason why we are a superior option to a plan-in-a-box or online do-it-yourself solution.

Sharon Anderson

Sharon Anderson practices with Holstrom, Block & Parke in Corona, California, focusing on estate planning, probate, conservatorship, guardianship, and trust administration.