Introduction
Selecting the right attorney is a critical step in the estate planning process that many people overlook. Some people prefer to do everything themselves and avoid having to hire an attorney; others just close their eyes, grit their teeth, and go with the first attorney they find. In the end, both of those strategies can lead to costly setbacks down the road. The estate planning process is complex enough that it’s extremely difficult to manage entirely on your own, and it’s also a very personal process that is best taken care of by an attorney that you not only trust, but feel comfortable working with.
When you sit down with a candidate who you feel may be a good estate planning attorney to work with, start by asking a few questions to get to know them and their practice. Before you get into your personal details, make sure there is a good fit. Following are five questions to start with.
How much of your practice deals with estate planning?
There are attorneys who do estate planning, and there are estate planning attorneys. If you don’t have many assets and your estate is simple, then this distinction probably doesn’t matter. However, if your estate has any potential complications, such as family issues, financial matters, business succession, or if the size of the estate puts you at risk for estate taxes, then you’ll want to work with an attorney who specializes in estate planning. A good candidate will spend at least 50% of their time on estate planning. They should also have expertise in elder law, taxes, business, real estate, and probate, as these practice areas can become intertwined with your estate planning. They should be comfortable drafting wills, trusts, power-of-attorneys, advance directives, and medical authorizations.
How many years of experience do you have in estate planning?
Along the same lines as the previous question, you’ll want to work with an experienced attorney who has been practicing long enough to see how his estate planning works when clients pass away. A seasoned attorney will know what pitfalls and potential complications to plan for since he’s experienced them. Look for an attorney with at least 3 – 5 years of experience, and ask them how many estate planning cases they have seen through to the finish.
Will you be able to assist me with transferring my assets into a revocable living trust?
Even the most thorough and well-organized estate plan is meaningless if you don’t transfer the appropriate assets into your revocable living trust before you die. It’s like building a ship to keep your assets safe during a flood, and then failing to actually put your valuables in the ship before the storm comes. Most estate attorneys should be well-practiced in establishing trusts, but some of them won’t do anything beyond that. It would be ideal if your attorney has an assistant or department that helps with funding your trust, but at a minimum, they should at least provide detailed written instructions on how to carry it out, and be there to guide you through the process as much as possible.
How often do you hold account reviews?
Laws and taxes change over time, as do your life plans and goals. If your estate plan is simple and your personal situation doesn’t change, then you should at least reassess your planning documents every 3 – 5 years. If there are any complications, then a good attorney should speak with you annually to review your estate plan and address any necessary adjustments.
Do you charge a fixed rate, or by the hour?
Most estate planning attorneys charge a fixed rate based on the estimated complexity of your case. This is preferable over an hourly rate, as you understand what to expect, and you don’t need to worry if his team is running up the clock just to charge more billable hours. However, be advised that the fixed rate the attorney quotes for you is based on an estimate of your case’s unique requirements. If any issues arise that prolong the case or require additional work, the attorney probably has an hourly rate that he can charge to cover the extra effort. This is perfectly normal. It’s just good to know in advance so there are no surprises when the bill is delivered.
Can I see myself working with this attorney?
The final question to establish the fit isn’t one you’ll ask out loud, but rather to yourself. Is the attorney qualified but cold and distant, or do you feel comfortable speaking freely with him or her? Do they seem impatient and annoyed by your questions, or can you sense a genuine desire to resolve your needs and concerns? Even if they’re the best estate planning attorney in the state, you should keep looking if the fit isn’t there.
Once you’ve established the fit, it’s time to start talking about your case. Get a feel for what to expect, and how the attorney plans to proceed. The full estate planning process will involve many more questions and conversations, but this is a good starting point to help you feel comfortable with the process.
Does my will need to be updated?
If you have a will, bring a copy to show the attorney. They’ll review it to see if everything is in order, or if there are some holes that need to be fixed. If you don’t have a will, that will be the first item of business. The attorney will help you draft a will that fulfills your unique needs, and nominates a trusted individual to serve as your estate’s personal representative after you die. This person will be in charge of directing your estate and following your final wishes; selecting the right person for the job is an important step in the estate planning process.
Am I at risk for estate taxes?
In 2017, the IRS has set the individual estate and gift tax exemption at $5.49 million. If you’re married, you and your spouse can leave up to $11 million to your heirs without qualifying for the estate tax. If your net worth is greater than $11 million, or if your net worth is on the rise and may cross the threshold before you pass away, you’ll need to work with the attorney to shield your assets from the estate tax. The most common way to do that is with a revocable trust, but the attorney will help you assess what strategy is best for you.
How do I prepare for a situation where I am incapacitated, unable to make financial and medical decisions?
Typically, clients will use a power-of-attorney to give someone the authority to manage their finances, and a medical authorization to give someone the authority to make medical decisions. While they are separate documents, you can elect the same individual to fill both roles. You can also draft an advance directive regarding your health, such as a do-not-resuscitate (DNR).
How do we avoid the probate process?
Probate court can be an expensive, time-consuming process; often, the best strategy is to position as many assets as possible in a manner that will bypass the probate process. There are many ways to do this, and no single solution is right for everyone, but common solutions include joint accounts with rights of survivorship, payable-on-death (POD) or transfer-on-death (TOD) designations, primary and contingent beneficiaries on life insurance and retirement accounts, trusts, and real property held in joint tenancy or as tenants by the entirety.
Call our Arizona Estate Planning team at (480)467-4325 to discuss your case today.