Estate Planning, Probate & Elder Law Attorneys

» Planning for Couples in a Second Marriage

A husband and wife in their first marriage, with children, are pretty easy to handle from an estate planning perspective. That's mostly because their beneficiaries are exactly the same: the survivor of them, and their children (in that order).

Things get a bit more difficult when you are talking about a situation where the husband and/or wife have children from a prior marriage. In many cases the beneficiary situation will be something like this:

For husband: wife if she survives, otherwise to my children

For wife: husband if he survives, otherwise to my children

A slight but important difference. The concern for the first to die is to make sure his or her children don't lose out. There are a few ways to do this. Some thoughts:

1. Consider current property ownership. In many cases, the ways other married couples hold property (jointly, or as each other's designated beneficiaries) aren't appropriate AT ALL. Upon the death of the first to die, everything goes outright to the survivor. The survivor can then alter his or her estate plan to leave all of his or her property to his or her children only. Not what the first to die wanted, and arguably not fair.

2. One solution is a trust. Instead of getting the property of the first to die outright, the survivor gets the benefit of it for the rest of his or her life. But when the survivor dies, the trust property reverts to the children of the first to die. (The survivor's children would get all of his or her property via the survivor's trust at this same time.) This can work, but how well it works depends on how the survivor approaches the trust. Let's say that John and Mary Smith both have children from a prior marriage (two each), and trusts containing $1 million each. John dies. How should Mary pay living expenses for the rest of her life? May Mary drain John's trust of its assets before she starts taking assets from her own trust? This will lead to a situation where John's children can be disinherited.

Another important point: who's the trustee of the trust for the survivor? Is it Mary? One of John's children? Mary AND one of John's children? I can see problems with all of those possibilities. A corporate trustee may be helpful.

3. Agreement. Another option: a written agreement between the two spouses to make the children of both of them the ultimate beneficiaries of the estate. So, to go back to the John and Mary Smith example:

John dies. His property is held in trust for Mary's benefit for the rest of her life.

Upon Mary's death, the remainder of John's trust passes equally to his two children AND Mary's two children. And the remainder of Mary's trust passes in the same way.

One problem: what if Mary wants to remarry (no pun intended)?

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» 5 Things You Can Do To Save Money and Time on Probate

Probate has a reputation of being expensive and time-consuming. I would say that that reputation is unfair in some cases, but you still have to be careful about how the probate is handled. And there are certainly some general and specific things that you can do to save money in probate. Many of these things involve saving your attorney from having to perform some duty that you can do yourself. Here's my list:

1. Obtain waivers of notice from all heirs and legatees (beneficiaries under the Will). This can save 1/2 hour to an hour of attorney time. If waivers aren't obtained, the attorney needs to send notice to each heir and legatee of the fact that the estate has been opened. Obviously, waivers only work if the heirs and legatees are willing to sign the waivers -- in an estate with a lot of heirs and legatees, or an estate where people don't get along, waivers probably can't be obtained.

2. Prepare a list of heirs and legatees yourself (with their addresses), instead of having your attorney do it. This can save hours of work.

3. Have a "proper" Will. There's not much you can do on this front once the decedent is dead, but things go much more smoothly if the Will was drafted correctly. And that typically means "He/she got it off the internet" won't work. Most internet/software Wills that I see forget to do the simple things, like waive the requirement that the executor post a surety bond. If this isn't done, you need to purchase such a bond, which can cost from $100 to many thousands of dollars per year.

4. Present the attorney with a list of the decedent's assets, including potential values, account numbers, and how the assets were owned. Again, this saves the attorney from having to spend the time to track down this information.

5. Be careful about attorneys and other professionals. Interview more than one attorney, and make sure that you understand the extent of your attorney's experience in the area of probate, as well as how fees will be structured. Some attorneys charge hourly (that's what I do); some seem to charge a flat fee. Find this out beforehand. Other things to inquire about:

a. How work will be handled. Are there specific non-legal things you can do in order to speed the process along or save money?

b. Who will be handling the matter. Will it be the attorney? An associate? A secretary? A legal assistant? You need to know, and you also need to know whether the person is going to be responsive. If you as a potential client leave a message for an attorney, how long before the attorney calls you back?

c. Does the attorney have good working relationships with accountants and financial folks, who can sometimes handle estate issues for less money, or does the attorney expect to do all of this work himself or herself (and charge for every minute)?

None of the above should suggest that you can do all, or even most, of the probate by yourself. A good attorney will save you lots of money in the long run just by doing things the right way. I would also suggest that clients not be penny wise and pound foolish. By this, I mean that the attorney should spend some time and money at the beginning of the probate, learning about the decedent's situation and communicating with the executor and the heirs and legatees, and should charge accordingly. This is a good thing, in the long run -- the more time spent upfront, the greater the chance to avoid problems later in the probate.

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