1.1: Basic Introduction to Estate Planning and Probate Practice
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)As we live our lives, we hope to accumulate property, to take care of our bodies and minds, and (in some cases) raise children. While we are living and healthy, we value being able to make decisions about finances, property, health care, and raising our children. However, circumstances can happen that can impact our ability to do these things. We hope others will handle these matters according to our wishes if we become incapacitated and when we die. The only way to assure that will happen is through estate planning.
What is an Estate Plan?
Most people desire to make known their wishes about what will happen to their property, bodies, and/or children in the event they are unable to express their wishes or upon their death. That’s where estate planning comes in. An estate plan is a set of legal documents that present a person’s wishes for the distribution of property, guardianship of minor children, and healthcare decisions. It is an arrangement of a person’s assets using the laws of various disciplines to gain maximum financial benefit for the disposition of the person’s assets during life and after death.
Estate plan: A set of legal documents that present a person’s wishes for the distribution of property, guardianship of minor children, and healthcare decisions. It is an arrangement of a person’s assets using the laws of various disciplines to gain maximum financial benefit for the disposition of the person’s assets during life and after death.
Laws and regulations regarding property ownership and distribution, insurance, wills, trusts, taxes, healthcare, and guardianship/custody of children and incompetent or disabled family members all have a role to play. Comprehensive estate planning can involve the services of a variety of professionals, including attorneys, accountants, financial planners, and life insurance representatives.
Typical Paralegal Estate Planning and Probate Practice Tasks and Responsibilities
As with most practice areas, paralegals working with estate planning and probate attorneys are responsible for many different types of tasks, including:
- Pre-client screening and conflicts-checking
- Client interviews
- Opening and managing the client’s internal file
- Assisting the client with locating, obtaining, producing, and organizing information and documentation relevant to the client’s legal matter
- Drafting legal correspondence to the client, witnesses, court personnel, and other parties/counsel involved in the client’s legal matter
- Conducting factual investigation and legal research regarding the client's legal matter
- Drafting estate planning documents, probate forms, and other documents necessary to fulfill the agreed-upon legal services to the client
- Receiving, organizing, and summarizing documents and other information received from third parties in response to interviews and document requests
- Acting as liaison between the client and the attorney with respect to providing legal information to the client and requesting legal advice from the attorney
- Maintaining contact with financial and other experts as needed to effectuate the attorney’s plan and client’s wishes
- Assisting the attorney with probate proceedings
- Managing deadlines, calendars, and tasks lists relating to the client’s legal matter
- Staying current in State and Federal laws, regulations, and case law impacting the client’s legal matter
Estate planning and probate is one of the most client-contact intensive practice areas for paralegals. Because it deals with death, dying, and property ownership, it can also be one of the most emotionally charged practice areas. As such, successful paralegals practicing in this area of law have strong empathy and interpersonal skills, as well as the ability to set aside personal biases toward various situations or diverse persons. Maintaining healthy work/life balance by placing appropriate boundaries and compartmentalizing are also key to a rewarding practice. Other personal attributes and skills necessary to providing effective legal services include strong written and oral communication skills, attention to detail, time management skills, ability to work independently and as a member of a legal team, flexibility, adaptability, ability to work in a fast-paced and sometimes stressful environment, and well-developed research and investigation skills.
Estate Planning Terminology
Before diving into the details of estate planning, there is quite a bit of terminology with which you should become familiar.
Estate: all property owned at death before it is distributed by will, trust, or intestacy laws. An estate may contain real property and personal property.
Heir: a person entitled by law (e.g., spouse, children, or other family members) to a person’s property after death
Beneficiary: someone receiving property or money pursuant to an estate planning tool
Contingent beneficiary: someone who will receive property or money only if one or more conditions occur or are satisfied
Fiduciary: a person appointed to serve in a position of trust, who controls and manages property exclusively for the benefit of others
Inter Vivos/Non-Testamentary: during life
Testamentary: after death
Testate: death with a will, trust or will substitute
Intestate: death without a will, trust or will substitute
Testator/Testatrix: a person who makes a will
Settlor/Grantor: a person who makes a trust
Administration of an Estate: Any proceeding relating to the settlement of a decedent’s estate, whether testate or intestate.
Probate: court procedure in which a will is “proved” and the decedent’s estate is collected, managed and distributed
Additional terminology will be provided in later chapters.
Ethics in Estate Planning and Probate Law Practice
As with all practice areas, the American Bar Association’s Model Rules of Professional Conduct and Wisconsin’s Rules of Professional Conduct apply to Estate Planning and Probate Law practice. Attorneys are responsible for their own conduct and have the duty to ensure personnel they supervise – associate attorneys, paralegals, and other legal staff – do not engage in conduct that would violate the rules. While all of the rules apply, it is helpful to examine the rules that come up the most often and that can be particularly troublesome in an Estate Planning and Probate Law practice.
Rule 1.1: Competence
This Rule requires legal practitioners to provide clients with competent representation, which is defined as “the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” (Wisconsin Supreme Court Rule 20:1.1). As mentioned above, estate planning can sometimes implicate other areas of law; thus, it is important that legal practitioners do not attempt to represent clients in complex legal matters requiring legal knowledge and skill outside of their actual competence. For example, Bankruptcy is a highly specialized area of law that could come up when advising clients who have a significant amount of debt. Legal practitioners without training and experience in Bankruptcy law should consider referring clients with potential Bankruptcy concerns to a bankruptcy attorney.
Rule 1.4: Communication
This rule requires legal practitioners to keep clients informed about their legal matters by promptly communicating and consulting with clients and providing information as requested. (Wisconsin Supreme Court Rule 20:1.4). Especially in an emotionally-charged probate matter, clients are much more satisfied with their representation – and much less likely to lodge ethical complaints – when they are regularly informed about the status of their case.
Rule 1.5: Fees
This rule requires legal practitioners to charge reasonable fees based on time, labor, and skill required to competently perform the desired legal services (among other factors). The rule also requires that the scope of the representation and how the fee is calculated be explained in writing unless the total cost will be less than $1,000. Most fee agreements for estate planning involve a flat or fixed fee, depending on the number and complexity of documents being drafted. Probate matters are typically based on hourly charges for attorney and paralegal time. In probate matters, a chargeable advance fee (also sometimes called a retainer fee) may be collected when the client signs the fee agreement. The amount of the advance/retainer fee varies, but its purpose is to act as a “deposit” sufficient to cover anticipated costs and time required for at least the early stages of the representation. Fees for time spent by attorneys and paralegals are deducted from (or charged against) the advance/retainer fee at first, and then are typically billed to the client monthly.
Rule 1.6: Confidentiality
This rule prohibits legal practitioners from ever revealing or disclosing any and all information relating to the client’s representation, regardless of the source of the information, without the client’s express consent. This means that, when it comes to estate planning, the client’s family members are not entitled to receive any information about the client’s estate plan unless the client consents. During a probate, the client is the person who hired the lawyer. Sometimes, it is the Personal Representative of the deceased person’s estate; other times, it is an heir or beneficiary of the deceased person. Regardless of who the client is, information should not be shared with anyone other than the client without the client’s prior consent.
Attorney-Client Privilege
Although not technically an ethical rule, the attorney-client privilege is one of the ways confidential client communication is protected. The privilege prohibits disclosure of any communications (written or oral) between the client and the attorney or the attorney’s staff that relates to legal services provided to the client. This privilege becomes effective if confidential information is obtained, even if the person does not subsequently retain the law office in the legal matter. For that reason, it is important not to obtain confidential information from persons until they have signed our fee agreement officially establishing a paid attorney-client relationship.
Attorney Work Product Protection
The attorney work product rule protects activities performed by the legal team on the client’s behalf from disclosure. Protected activities include factual investigation, legal research, notes, memoranda, strategies, preparation and organization performed by the attorney, paralegal, or other legal staff.
Rule 1.7: Conflicts of Interest – Current Clients
This rule prohibits representation that is adverse to or could injure the interests of another client. The rule requires legal practitioners to avoid situations in which they may need to choose between the interests of:
- multiple current clients
- a current client and a former client or other person from whom the legal practitioner has obtained confidential information
- a current client and the business or personal interests of the legal practitioner (Wisconsin Supreme Court Rule 20:1.7).
Abiding by this rule can be tricky during estate planning and probate. Here are some ways a conflict of interest between a current client and others can arise:
The attorney is drafting an estate plan for both spouses. One or both of the spouses want to secretly give part of their estate to a child or someone else outside of the marriage without the other spouse’s knowledge. Each client is entitled to confidentiality regarding their desired estate plan; however, each client also is entitled to be informed of the nature of the property they own and their right to determine its distribution, especially if the property was acquired during the marriage.
The attorney is drafting an estate plan and is contacted by one or more persons who may be heirs or beneficiaries of the estate (or who want to be). Great care must be taken to communicate to the person(s) that the testator/settlor/grantor is the client, and the attorney does not represent and will not provide legal advice to any other persons who might be heirs or beneficiaries of the estate.
The attorney is drafting an estate plan, and the testator/settlor/grantor wants to give the lawyer (or a member of the attorney's staff) a gift in the will or trust, when the person receiving the gift is not otherwise an heir. This can raise suspicions of undue influence by the attorney and can lead to a conflict of interest later on if one of the client’s heirs or beneficiaries seeks to challenge the will during probate after the client has died. Similar problems arise when the testator/settlor/grantor wants to name the attorney/staff member as personal representative or trustee.
During probate, a conflict of interest can arise when there are several people who have or who are attempting to claim an interest in one or more items of the decedent’s property. Again, great care must be taken to establish who the client actually is and to make other persons aware that the attorney does not represent them and will not provide legal advice to anyone other than the client. Once a conflict becomes apparent, the attorney must inform each person of the need to retain independent legal counsel, and the attorney could be disqualified from further representation if confidential information was already obtained from a potentially adverse party.
Equally important is the need to avoid the former client/current adversary conflict of interest. In estate planning and probate practice, the two most common ways this conflict can arise are:
The attorney drafted an estate plan for both spouses. One spouse later contacts the attorney to have their estate plan modified in a way that is detrimental to the other spouse. Since the purpose of reciprocal or mutual estate plans is to make sure that each person inherits the other person’s estate, the modification may require the attorney to act in a way that is not in the best interests of a client for whom the attorney provided legal services.
The attorney drafted a will for a client, who is now deceased. An heir or beneficiary of the deceased wants to hire the attorney to challenge the will, or a portion of it, or wants someone other than the person nominated in the will to be the personal representative. Again, this asks the attorney to act in a manner that is contrary to what a former client (who is now deceased) directed the attorney to act when drafting the will.
Rule 4.2: Communication with Person Represented by Counsel and Rule 4.3: Dealing with Unrepresented Person
These rules govern contact with persons involved in the legal action who are not clients. Typically, these are opposing parties. If the opposing party is represented by an attorney, all communication between our law office and that party must occur through and be directed to that party’s attorney. When the opposing party is pro se (self-represented without an attorney), our office is required to inform that party that we do not represent that party and cannot give that party legal advice of any kind (other than advice to retain another attorney). (Wisconsin Supreme Court Rules 20.4.2 and 20:4.3). Many times, a beneficiary or heir in a probate matter may decide not to hire their own attorney as a way to save money. In that situation, it is imperative to inform that party in writing that we do not represent that party, that our client’s interests may be adverse or in conflict with that party’s interests, and that we are prohibited from representing that party or providing legal advice.
Unauthorized Practice of Law
As you’ve learned in other classes, there are certain tasks and activities that can only be performed by a licensed attorney; anyone else who performs them has engaged in unauthorized practice of law, or UPL. Non-lawyers are prohibited from doing the following:
- Accepting or rejecting a client/legal matter. In other words, establishing the attorney-client relationship, communicating an intent to establish (or not establish) it, and signing fee agreements, contracts, or correspondence relating to establishing (or not establishing) an attorney-client relationship
- Setting legal fees. Only the attorney is allowed to decide the amount and manner (hourly, flat fee, task-based, etc.) in which to charge a client for legal services.
- Providing legal advice. Legal advice includes recommending actions or inactions, interpretation of law or documents, evaluation of legal claims or likelihood of success, explaining legal rights or obligations, and the like.
- Preparing legal documents without attorney supervision. In other words, any document, pleading, letter, etc., must be reviewed and approved by the attorney before it leaves the law office.
- Representing clients in Court. This not only includes personal appearances at hearings or trials but also signing pleadings, motions or other legal documents to be filed in the Court.
- Terminating the attorney-client relationship. Only the attorney can determine whether a legal matter has been concluded according to the retainer/fee agreement and communicate its completion with the client. This restriction especially applies to decisions to terminate the attorney-client relationship before the conclusion of the legal matter, for whatever reason.
Now you have a basic understanding of what is involved in an ethical estate planning and probate practice. The next chapter will introduce you to the process of estate planning.