What?

A new client, Theresa, who recently relocated from a northern state, brought me her trust as she wanted me to review it for applicability to Florida law. She dropped it off before her appointment so I could be prepared for our initial appointment together. I opened up the binder and started reading.

What?

It took me three readings to figure out what Theresa’s intent might be. My suspicions were that if it took a board certified wills, trusts & estates attorney with almost thirty years of experience three attempts to figure out the language of the trust, Theresa probably had no idea what it said either.

I’m not trying to knock Theresa, by the way. Theresa is a very smart and accomplished woman. Even so, her field of expertise is not tax or trust law, and that’s why I assumed Theresa didn’t know what her trust said.

So when Theresa sat down in my conference room, I started to ask her some questions. Who did she want to run her financial affairs in the event she became incapacitated? Was there anyone else that she was supporting financially who might need continued assistance in the event of her incapacity?

Did she want someone different to be responsible for her business than the person who she wanted to be responsible for handling her investment assets? Did she want the person responsible for running her business to be able to purchase the business from Theresa’s estate in the event of Theresa’s incapacity or death? If so, how was the business supposed to be valued? Who decides what the terms of the sale would be?

The questions went on and on.

I’m not necessarily criticizing the attorney who drafted this trust – although I felt he could have done a much better job. There were just way too many ambiguities in the document – open holes that left too much up to chance. When I sat down with Theresa and started to ask her questions about what she wanted, the answers that she gave me didn’t coincide with what I read in her document.

There were many possibilities why this was the case. First, Theresa may not have expressed her intent clearly to her prior attorney. Maybe her prior attorney didn’t ask Theresa the questions that I was asking, which may have prompted completely different responses leading to a completely different answer. Perhaps Theresa forgot what she told her prior attorney and her intent changed.

This isn’t the first time that I’ve listened to a client express her intent, and when I read the client’s document the written words didn’t match what I heard.  It’s very important for clients to read through their legal documents, and, if they don’t understand the main points, to ask their attorney questions until they do understand.

When I send drafts to clients, we often include a brief summary of the trust along with a flowchart that describes what happens during incapacity or their passing. I know of other attorneys who also send flowcharts. Some people operate better with visual graphics than with words. I’ve found that when you combine a flowchart with a summary of the trust, more often than not people will understand what the trust is supposed to do.

Oftentimes clients, when asking questions, will start off the question with an apology. “I’m sorry to ask so many questions but….”

Don’t apologize! Ask your questions! That’s what you’re paying the attorney for! Make sure that the document your attorney drafted is consistent with your intent! If you don’t feel that you understand the basics of your document, then you need to ask more questions.

With that said, there will always be some provisions that you will never understand. Formula provisions that divide your estate into exempt and non-exempt tax shares come to mind. They are extremely complex and fraught with legalese. I don’t draft those types of provisions to satisfy a sadistic urge, (although others may disagree) – it’s just that if you don’t express that language correctly you could run into IRS or other legal difficulties.

But even with those types of provisions you should understand the generality of what is happening.

Do take the time to read through your estate planning document drafts when you receive them. Don’t be afraid to ask questions to make sure that the documents are consistent with your intent. Finally, do review your documents periodically to make sure that the intent you expressed before remains your intent today.

The Sheppard Law Firm has its main in Fort Myers and also in Naples by appointment.

© 2017 Craig R. Hersch. Originally published in the Sanibel Island Sun.

2018-03-09T11:28:45+00:00

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