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Saturday, October 30, 2010

What if lawyers ask a lot of "what if" questions?

A thought pattern that I've noticed in clients over the years is the tendency to think that on the day they pass away, everything will be exactly the same as it is now. For example, a married man with children assumes that when he passes, his wife will survive him and so will his children. They will still live in the same house and everyone will be in the same state of physical and mental health. And of course they assume that their financial picture will be the same too.

The problem is that if his wife also assumes that everything will be the same and that her husband will survive her, then nobody is planning for the day they are both gone.

This is where meeting with your estate planning lawyer will make you stretch a bit. Lawyers are the masters of the "what if" question. What if your spouse dies before you? What if you lose your mental capacity? What if your spouse has to live in long term care but you're still living in the house? What if you have grandchildren by then? And of course there are dozens more.

The point of the "what if" question is to ensure that your documents anticipate every reasonable scenario, and to guide you towards solutions for you and your family. The questions should help you take a practical - as opposed to theoretical - approach to estate planning by helping you walk through various scenarios.

You might be surprised at how well this exercise will help you focus. I go through this type of conversation with every client I meet with. In the majority of cases, the clients will say that they hadn't thought about what to do in certain situations. For example, when I ask clients who they would want to make medical decisions for them if they were incapacitated, they respond that they'd like their spouse to do that. But when I ask what happens when one of them is widowed and needs help with medical decisions, many draw a blank. It's not that no solutions exist; it's that they hadn't thought that far ahead yet.

Asking "what if" questions has helped me spot a lot of potential trouble areas that clients need to plan around. Many times clients don't realize something could be important so they don't mention it. The "what if" questions have turned up information about illegitimate children, gaps in insurance coverage, gambling or drug addictions in the family, tax problems and business succession issues.

As a result of these questions, I'm able to ensure that my clients get the most bulletproof documents available and the peace of mind that knowing no matter what happens, they've done everything they can to be ready for it.

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