David Mastroianni: Hiring an estate attorney can seem like a challenging process, but do you know what steps you can take to find the right professional for you?
Hi, and welcome to another episode of The Adviser You Can Talk To Podcast. I’m David Mastroianni, an account executive and CERTIFIED FINANCIAL PLANNERTM here at Adviser Investments. Most people don’t know what to look for when they’re trying to find an estate planning attorney. That’s the whole point of this podcast today.
We’re going to help you with that by providing you with the five key questions when interviewing an estate planning attorney. Today, I’m fortunate to be joined by some of my esteemed colleagues. I have Kari Wolfson, an account executive and CERTIFIED FINANCIAL PLANNERTM, and Patrick Carlson an attorney and vice president of wealth services here at Adviser Investments. Guys, welcome.
Patrick Carlson: Thanks, David.
Kari Wolfson: Thanks, David.
David Mastroianni: I want to set the table and talk about estate planning from more of a high level, because it’s a difficult conversation to have. Many people immediately associate estate planning with dying. It definitely has a stigma as being an unpleasant topic. Let’s start from a broader sense and talk about estate planning in general.
Kari Wolfson: I think that’s a great point. No one likes thinking about the unpleasant topics associated with estate planning, and even I—as a CERTIFIED FINANCIAL PLANNERTM advising clients all the time, not only on financial planning but also estate planning—this is something that I avoided. For me, the trigger was once my first son was born. I realized how important it was and that I shouldn’t avoid it anymore.
Actually, going through the process wasn’t that bad. I think I’m fortunate. Our clients are fortunate. We have a lot of great resources here. You just need to tap into those resources. We put out a lot of information, not only through our podcast, but we also have special reports and we have a financial planning team—a wealth services team. There are a ton of great resources here that people should tap into.
Patrick Carlson: Just to build on what you said, Kari, in my experience as an attorney most clients came through the door with a trigger of some kind: A new child, a new grandchild, a marriage, maybe a divorce, some kind of upcoming surgery, something that really compelled them to overcome that perceived unpleasantness.
I think a lot of clients were surprised once they got into the office to see what we could do for them beyond just that—thinking about dying: Saving income taxes, protecting assets from lawsuits, protecting children… there are just so many different things that you can do with estate planning.
David Mastroianni: To that point, Patrick, oftentimes people, when they think about estate planning, they think, “Well, I need to have my will updated.” There’s a lot more to it than that. You need to have a lot of other important documents in order when creating your estate plans such as a health care proxy, or a power of attorney, right?
Patrick Carlson: Absolutely. Estate planning does not just equal drafting a will. There’s a lot of other things that go into it. You mentioned powers of attorney or medical documents. Again, these are very state-specific. Most notably, you’re also going to be looking at trusts as part of this, as well.
Kari Wolfson: Talking about all these other documents reminds me that we have this great estate planning checklist that really walks through all of the different important documents that you need and steps to take to make sure that everything is in order.
David Mastroianni: That’s a good reminder Kari. Here’s the link to that great special report. Let’s get right into it, guys. We’ll start off with our first question, which is, “What is your estate planning experience?”
Patrick Carlson: David, that’s a great question to start with when you’re talking with an attorney. What you’re looking for here is you’re trying to gauge that attorney’s knowledge, their experience and their relatability. It goes without saying, of course, that you want them to be in good standing with the Bar Association.
Kari Wolfson: Patrick, I’ve had a lot of conversations with my clients, and many people don’t know where to find that information. How would you go about that?
Patrick Carlson: Good point. I would go online, so many of us can go online. Go and search your state’s Bar Association. If you live in Florida, you live in North Carolina—wherever it is, just search Florida Bar Association. Almost all of these websites have a “look up an attorney” link, where you can find out the attorney’s office location, if there’s any reported discipline against them and that kind of thing. It’s a good thing to check out.
When it comes to the knowledge and experience piece, you also want to look to see if maybe they’re part of a specialist program. Again, I caution you, these are not in all states. But if you’re in a state that has a specialist program, it’s usually a good idea to pick somebody that specializes in trusts and estates or estate planning.
Also look at their websites. Check to see what kind of things they say they do on their website. If I ran across an attorney that says they can handle my DUI and do my estate plan, I’d be a little bit worried about that.
David Mastroianni: So no “jack-of-all-trades,” right?
Patrick Carlson: Usually you’re better off staying away from those jacks-of-all-trades. What you really want here is somebody that focuses or specializes in this area. Now, that being said, there are some areas that are really closely related, like tax law, elder law, special-needs planning, maybe small business law if you own a small business. So depending on your needs, maybe some of those things could also be helpful things to add in.
When it comes to the relatability piece, what you really want to have here is that you need to feel 100% comfortable working with this attorney. The technical issues are very important. Obviously, the attorney needs to know what they’re doing, but you’re going to be talking about some really deep personal issues with this individual, with your attorney, so you want to make sure that you feel completely comfortable to do that.
Kari Wolfson: And on that relatability subject, I think trust is key. If you’re getting a referral from your friend, just talk to them about their experience. Of course, you want them to be in good standing with the bar and have the technical aspects as well, but relatability and meeting style are super important points, too.
David Mastroianni: Absolutely. Client experiences are definitely important. A lot of times we see the most elaborate estate plans being put together, you pay a lot of money to get all your important documents, and then all of a sudden they’re just kind of put in a drawer—forgotten about, never implemented, which I think resonates with the idea that you want to have someone that’s providing ultimately good client service.
That brings us into our second question that you should ask an attorney: “How will you collaborate with my financial adviser to implement my estate plan?”
Kari Wolfson: Working with clients, we see all different types of situations. I recently had such a great experience working with an attorney who actually did collaborate and kept the rest of the planning team informed and in the loop. It makes it so much easier, not just for the planning team but also for the client. Recently, we had a client and their attorney update their trust documents, their power of attorney and kept us in the loop the entire time. I think finding a collaborative attorney is key because it really takes the burden away from the person.
David Mastroianni: Unfortunately, I think we’ve also seen the other side of that scenario, too, Kari with clients. I had an instance where a couple that I knew was getting divorced, and from one of the individuals we were reviewing the accounts for and realized that the ex-spouse was still listed as the primary beneficiary on their IRAs, for example. In speaking with the client, they said, “Well, I already updated my will with the attorney.”
I had to remind him that your beneficiary designations on your investment accounts actually take precedence over anything that is stated in your will. So making sure that an attorney is following through on proper implementation, whether it be re-registering accounts or updating beneficiaries, is very important.
Patrick Carlson: Absolutely. the really good attorneys I’ve worked with over the years in this space, they look at every single asset that you own. It’s not just the one account that you came to ask them about or that you think needs planning. They’ll make sure that all of those beneficiary designations are correct exactly the way they need to be. They’ll work with the financial adviser. They’ll work with the rest of the team to make sure that accounts are registered or re-registered properly.
What you’re looking for here is somebody to coordinate with the rest of your team, your financial adviser and others, to make sure that your family is taken care of and that the plan will work exactly as you intended.
Kari Wolfson: We’ve definitely had some clients come in that had trusts set up, created, but that were never funded or aligned with their financial plan. It’s really like you’re not getting the full service or the follow-through—like building a new home and then never moving in.
Patrick Carlson: Exactly.
Kari Wolfson: Collaborating and implementation is super key.
David Mastroianni: Definitely. I want to switch gears a little bit and talk about administration of the estate because oftentimes people forget that there is an entire estate planning process that dovetails for after you pass on.
What I’m referring to is probate. People often forget that this is not a black-and-white matter. Immediately there’s a negative association for probate and for good reason, but there’s definitely more granular detail that needs to be examined.
Getting into our third question for your estate planning attorney, you should ask: “Do you recommend probate? If so, why?”
Patrick Carlson: You know, David, that’s a great question to ask the attorney, but let’s take a step back first and talk about what probate is. You talked about some of the downsides there, but at its most fundamental level, probate is just the legal process of wrapping up a deceased person’s affairs and then ultimately distributing their property.
Sounds simple, right? Well, the laws vary greatly by state, and you’re going to have some that make it relatively simple and others where it’s a multi-year, very expensive process. Again, there are so many issues. It’s public record. That’s one of the things that I think scares a lot of people. Everybody is going to know your family’s business, and there’s always that cost and delay.
Again, although it varies from place to place, maybe you live in a state where probate is really easy now, but we don’t know where we’re going to be when we pass away. Maybe we moved to a state where it’s a little bit more challenging.
Kari Wolfson: I recently worked with a client who had a really negative experience. They always thought that probate would be easier versus paying up front. Her husband passed away and it ended up being a nightmare. All of her accounts were frozen. She had to wait to go to the courts to get any of her money. This all could have been avoided if she would have gone through some of the estate planning process. The client was really surprised by the cost of probate and the whole experience as well. It shows why these questions are so important to ask upfront because when you’re dealing with grief, the last thing you want to do is extra work—and sometimes doing more work up front really does pay.
Patrick Carlson: Absolutely. What you’re talking with the attorney, if they say, “We should avoid some probate,” some of the things they are going to talk about are going to be things like transfer on death (TOD), payable on death (POD) , beneficiary designations, trusts. These are the things they’re going to be chatting with you about. If they say probate’s a good deal, maybe it’s okay for in some cases, because again it is a lower cost today, but just know that you might be setting up that headache for your family later that Kari’s clients have experienced.
David Mastroianni: Key takeaways, you both touched upon this, is that it’s okay to have a healthy amount of skepticism with probate. However, there are exceptions to the rule, so just make sure that you have a conversation with your attorney and understand how probate is involved, if at all, again how it ties in with the estate administration process.
Patrick Carlson: Exactly.
David Mastroianni: Perfect. You talked a lot about cost in that section, which is a really good transition for our next question, number four, which is, “How much will my estate plan cost?” As a wise person once told me, you can’t get filet mignon at ground-beef prices. I think it’s fair to understand how much an attorney is going to be charging you for your estate plan, but from my experience you should pay more attention to how they charge, not only what they charge, right?
Patrick Carlson: Absolutely. That’s a great point. There’s a lot of variety out there. Of course, the classic example of legal fees is that hourly rate, right? There’s a lot of attorneys out there that are charging a fixed price, so they’ll do an entire estate plan for some predefined amount of money. There are others that do phases. Maybe it’s a certain amount to kind of design the plan, another to implement some of the trusts.
Really, the thing I would suggest to you here is focus on the value you’re getting. Are you getting the right solutions for you and your family? Focus a little less on the cost because the value is what’s really important here. Then, your comfort is the key. Do you understand fully how you’re going to be charged? There’s nothing inherently wrong with any of those methods of billing as long as you understand what you’re getting into.
Kari Wolfson: Patrick, I think that brings up a really great point. I’ve had a lot of clients who work with an attorney and then are confused or frustrated or upset with how they’re being charged. A lot of it was back and forth email communication versus on the phone or meeting. So they think they’re not getting charged for that, and then they’re surprised to get this large bill. I think really communication and understanding how they charge for what different sources is important.
Patrick Carlson: Kari, one of the points there is, even when it’s one of those fixed price or billing based on phases, don’t just assume that it’s unlimited emails. I mean ask the attorney how they’re going to handle that because when it’s hourly, you pretty much expect that bill coming. With a fixed price I think it’s a bigger concern.
David Mastroianni: Let’s not forget as any good attorney would advise you, “Read the fine print when it comes to billing,” right?
Kari Wolfson: Definitely.
Patrick Carlson: Absolutely.
David Mastroianni: Patrick, oftentimes I’m asked by clients if they should hire the big prestigious, white shoe law firm versus maybe a smaller, call it boutique law firm in comparison. It’s not the name that’s on the mantle or how many associates are with the firm. It varies on a case-by-case basis in terms of the services being offered, whether or not it’s a good fit for you based on the scope of the arrangement and other variables, right?
Patrick Carlson: I think as long as you’re getting—again, it comes back right to that very first question we asked. As long as you’re getting that knowledge, experience and relatability, I think the firm that the attorney practices at is usually a little bit less important.
From a billing perspective, it stands to reason that your bigger law firms are going to cost a little bit more, but you are getting something for that? That’s that value. They’ve been around for decades. In some cases, many, many decades. You’ll know that your family can find those attorneys to help them upon your passing. But there’s also some benefits to the boutique firms. They tend to be a little bit more specialized and a little bit more knowledgeable if you have unique situations.
Bottom line? You just have to pick what’s comfortable for you and fully understand what you’re getting into from a price perspective.
Kari Wolfson: Patrick, to your point, there not just one right answer. It’s situational. Every client is going to be different. Every person has a different experience. It all comes down to comfort—knowing what you’re going to pay for, balancing the cost you pay up front, the costs you pay over time versus you know the costs you would pay during probate.
Patrick Carlson: Absolutely, and ask the attorney these questions, get their feeling on how the overall landscape of this is going to fit together.
David Mastroianni: You’ve touched upon a lot of good points. I want to highlight some key takeaways: Number one, understand how the attorney is charging you, and not necessarily what they’re charging you. Two, weigh cost versus value.
Price is what you pay. Value is what you get. With value though, you want to make sure that it’s something that is beneficial not to just yourself but to your family as well. Lastly, your comfort is paramount. You want to make sure that you’re engaging in a long-term relationship with an attorney that you’re going to feel comfortable going back and forth with over a long-term estate planning process.
Patrick Carlson: Which dovetails us perfectly into our fifth question, David.
David Mastroianni: Exactly. Question number five: “How do you handle updating my estate plan as my needs change?” We talked earlier about estate administration, and this emphasizes the underlying theme that it’s not a one-step process: It’s more of a long-term engagement, right?
Kari Wolfson: Right. As we talked about earlier, there are different triggers that you should be aware of as your life changes. For me it was having a child. Patrick, you mentioned having grandchildren, getting married, an illness or disability, going through a divorce, a significant change in assets maybe from an inheritance—every person is different. Your situation’s going to be different. I think that’s why having a collaborative relationship and trusting your attorney is really key.
Patrick Carlson: One of the things that is sometimes missed because it nothing to do with us—it’s because the law has changed, right? The state legislature is writing laws. Congress is writing laws. The courts are coming up with their opinions. All of these things could impact our estate plan. As part of this, it’s always good to get the attorney’s insight on how they handle that for you and your family. Because it may be that nothing has really changed in your life, but there’s been a big tax-law change and maybe there needs to be something redone as part of your plan to keep your family fully protected.
David Mastroianni: This is really good reminder for our listeners that you have to be comfortable with who you’re working with, because you’re going to be updating your estate plan multiple times through your life as you approach different junctures. Not to sound too redundant, but as we talked about before, understand the cost that’s associated with it. Is it a one-off fee? Is there a subscription-based model where you pay on an ongoing basis? Just being vigilant enough to ask these questions is important.
Also, look at updating your estate plan as an opportunity for benefit for not just you but also your family. You can bring in relevant heirs, whether it be your spouse or your children. If you have a third-party trustee or someone else that might be coming in as a power of attorney, for example, that just makes sure that you’re setting expectations properly with yourself and getting everything on the same page.
Patrick Carlson: All of those are great points about updating the estate plan. The other thing you want to talk with the attorney about is how they will charge you for this because some attorneys will treat it as a completely new engagement. Others may have a client maintenance or a continuing care type of program. That’s like a subscription where you pay and you get some amount of access. Just talk with the attorney to see what they might have available so that way you’re able to get that plan updated as you need it and as your needs change.
David Mastroianni: Listening to you helps emphasize the idea that hiring an estate planning attorney is a big decision and a significant milestone. I feel we’ve covered a lot of really important ground today. I do want to review the five questions that we’ve covered. Number one, what is your estate planning experience? Number two, how will you collaborate with my financial adviser to implement my estate plan? Number three, do you recommend probate? If so, why? Number four, how much will my estate plan cost? Number five, how do you handle updating my estate plan as needs change?
David Mastroianni: Patrick, Kari, anything else you want to add for our listeners?
Kari Wolfson: Just what we talked about throughout the whole podcast: Every person’s situation is unique and different. Please feel free to contact us. We do this with our clients all the time. We offer comprehensive financial planning, and we have a lot of great resources at Adviser Investments.
Patrick Carlson: Yes, and don’t delay. It can seem intimidating, but like Kari shared at the beginning of our podcast today, I’ve heard this from so many clients—like a weight has been lifted off of their shoulders once they put a plan in place. We can help you as part of our financial planning process to locate a great attorney and work with that attorney effectively to get a plan put together.
David Mastroianni: I do want to point out that we have a great companion piece that goes with this podcast. It’s a special report titled “The 10 Essential Questions When Interviewing an Estate Attorney.” So you’re going to get five more than we had time to cover here today! To access this document, click the link.
David Mastroianni: But I do want to thank Patrick, Kari, again, you guys both for attending and participating today.
Patrick Carlson: Thanks, David.
Kari Wolfson: Thanks, David.
David Mastroianni: If you’ve enjoyed this conversation, please subscribe and review our show. You can check us out at www.AdviserInvestments.com/podcasts. Your feedback is always welcome, and if you have any questions or topics you’d like us to explore, please email us at firstname.lastname@example.org, or call us at (800) 492-6868. This has been David Mastroianni with Patrick Carlson and Kari Wolfson. Thank you again for listening to The Adviser You Can Talk To Podcast.