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.

Secrecy not a good idea

Recently I had an issue with a client. This person had approached me for an opinion and assistance with an estate. He was a beneficiary of an estate and didn't really understand the documentation that had been sent by the executor. The problem was that the client wouldn't tell me anything.

I could have saved us both an hour had the client been willing to tell me why he wanted to see me. I'm an in-house lawyer. I can't work on files that are not going to involve the company I work for, so I would have declined to see this particular client. This is why I ask people why they want to see me; if it's something I'm not in a position to handle, I help the client find someone who is. This client was coy right from the starting gate, so I knew that secrecy was going to be an issue.

My meeting with the client was very frustrating. He wouldn't let me see any documentation, even though he expected me to give an opinion on their effect and meaning. Even though he had the documents in his briefcase, he preferred to try to describe them to me. Not an easy job when you're not a lawyer! Especially when you're not prepared to even use anyone's name. He showed me a letter from someone, but folded down the top and folded up the bottom so that I couldn't see who it was from.  Did he really think I was going to give a legal opinion on something I couldn't even see? Our conversation sounded like something from Abbott and Costello (think "who's on first").

In any event, the meeting was a complete waste of time. The client got nothing out of the meeting. All I got was a slight headache.

I've never understood the need to hold back important information from the very person you are hoping will protect you. Over the years I've met one or two clients who make a point of hiding facts from the lawyer. If the client is lucky, we quickly realize things are being held back. If the client is sadly unlucky, we don't realize it, and make documents or court appearances based on only part of the information needed. It never goes well for the client, as we haven't brought the right ammo for the battle.

Nobody can do their job with only half the information. If you ask a mechanic to fix your car's engine, do you hide the car and refuse to tell the mechanic what kind of car it is, even when he says he needs to order parts? Do you only expose the few inches of engine metal that you think is causing the trouble? Do you tell the mechanic he can only work with half the tools he needs? I doubt you'll drive away with your automotive problems sorted out, just as you won't leave the lawyer's office with your legal problems sorted out.

Why do people hide what's really going on? Is it to make themselves look better? Is it because they don't really want to admit to doing things that are petty or vindictive or idiotic? Come on, I've been in this business for so many years now, there is no way that your situation is the worst I've ever seen. And even if it were that bad, I'm not judging. Just be honest so I know what we're up against.

I know that clients sometimes have trouble believing that the information they tell the lawyer won't be told to anyone else. The lawyer's assistant will know some of it, if he or she has to prepare documents. Other than that, the lawyer doesn't tell anyone else. Not even his or her spouse. Clients find that hard to believe, but that's how we operate. Everything you say in your lawyer's office is confidential.

Estate Planning; it's art not science

I really enjoyed this article about the art and science of estate planning from today's Wall Street Journal. In particular, I completely agree that when a client withholds information about assets, it can spell big trouble for an estate. Unfortunately, clients don't always realize that the one person they don't want to hide information from is the person hired to set up the future plan for their family and their assets.

Failing to disclose that "hidden" asset can mean that when you pass away, your estate is hit with a much bigger tax liability than you had planned for. Other assets may have to be used to pay the taxes. If you had simply divulged the asset in the first place, perhaps tax planning might have been effective.

You also run the risk that if your asset is more well-concealed than you thought, nobody is going to know about it on your death and your family will not receive it.

Communication is key between a lawyer and a client, and the responsibility for that lies with both of them.

When is a Codicil not a good idea?

A Codicil is intended to make a small amendment to an otherwise satisfactory Will. For example, if you had written a Will in which you left $10,000 to Doctors Without Borders, and you want to increase the amount to $15,000, you could make a Codicil. In other words, a Codicil is not intended to make sweeping changes to distribution plans and trusts.

The risk in using a Codicil improperly is that you'll end up creating confusion either by contradicting a detail in the Will or by revoking a sentence you didn't mean to revoke.

Clients who want Codicils have learned that Codicils are cheaper than whole new Wills. Therefore, they insist that all they need is a Codicil, regardless of the professional advice that the changes they want to make are too extensive for a Codicil. Never mind that they want to use a thumb tack to hold up a circus tent; they just won't spend the money to get what they need.

The end result for some people is a Will that is amended, re-amended and amended again by numerous Codicils. I've seen as many as six Codicils changing one Will. The odds of something being messed up in a case like that are astronomical. A Codicil is a useful tool, but you have to use it properly for it to be effective.

The other danger in using a Codicil is that it can become separated from the Will it's supposed to amend. If the Codicil becomes separated, the executor might not know about the changes that were supposed to be made. When I've done Codicils for clients, I've always recommended that the Will and Codicil be stapled together, put together into a folder or envelope, and put into the safe deposit box or other secure storage place.