go60.us Legal Ease Column
I am a bit angry right now. I am writing to you because I know you have no vested financial interest in how you respond to my question.
Five years ago my husband and I completed our estate planning with a local attorney. The documents we had prepared included wills, financial power of attorneys, health care power of attorneys, living wills and a joint trust. The meetings and the documents were quite comprehensive, and the cost was not cheap. Our main concerns, which were expressed to the attorney at that time, was that neither one of us wanted any hassles when the first one of us died and we certainly did not want to deal with probate. He assured us that what we were doing with our documents would address those concerns.
A few months back my husband passed away, and about a month later, I received a letter from that same lawyer asking me to contact his office to set up a time to meet to review our estate planning file and to make sure no probate estate had to be opened on my husband's behalf. I figured this was a routine meeting and was shocked to find out that not only did the attorney aggressively recommend that I redo all of my estate planning documents, but that a probate would be required of my husband's estate. Then when he told me what all of this would cost, I told him I would think about it and get back to him.
That was three weeks ago and I have no intention of calling him back. I am very upset by all of this and I feel that I have been taken advantage of. Am I overreacting? What was the purpose of setting up our trust five years ago when my husband's estate has to be probated anyway? I look forward to your response.
I cannot tell you whether you are overreacting based on the information you provided me. What I can tell you is that I always try to meet with the surviving spouse of a deceased client relatively soon after the deceased client's death. The purpose of this meeting is two-fold; (1) to determine whether a probate estate needs to be opened on behalf of that deceased client's estate; and (2) to determine whether the surviving spouse's estate planning documents should be updated. This is in line with what you said your attorney's reasons were for wanting to meet with you. Let's take a look at both.
Regarding the question of probate, first of all you have to understand that a trust only helps a person's estate avoid probate if the trust in fact owns that persons assets at his or her death. If the individual dies with assets in his or her name alone, then those assets generally need to be probated. Did the attorney advise you when you met five years ago that in order for the trust to accomplish its probate avoidance purpose that you actually had to re-title assets in the name of the trust? If he didn't, he should have.
I assume in your husband's case that a probate estate has to be opened because whatever assets he owned in his own name alone at the time the trust was implemented were never transferred to that trust or that he acquired assets subsequent to the trust's implementation, and never titled those assets in the name of the trust. I always advise clients that once the trust is established, the next step they have to take is to actually re-title assets to the trust. Sometimes clients are very diligent in making sure that they do that, but sometimes clients do not follow through or later on they acquire new assets that they fail to put in the name of the trust, and unfortunately, in either case, a probate estate has to be opened on their behalf at the time of their death.
Regarding the attorney's recommendation to update your estate planning documents, I often will advise a surviving spouse that it makes sense to update his or her documents to not only bring them current (which depends upon how long it has been since the last set of documents were prepared and whether there have been any changes to either state or federal law over that period of time), but for the sake of clarity, to remove any reference to the decedent spouse in those documents, either as a fiduciary or as a beneficiary, and to name other individual(s) in his or her place. This is a common practice.
If after reading this you are still not inclined to call your attorney back, I recommend that you at least meet with another attorney in your area to see if he or she agrees with the recommendations your attorney made, and if so what he or she would charge you to handle this work on your behalf. Good luck.