This is the first of two articles on reviewing a trust. In this one I address whether a Palo Alto family with a living trust should have the creator of the trust do the review, or find a different attorney to take a fresh look.
Q: We live in Palo Alto, California and in the 90s our family chose a Burlingame estate planning attorney to establish a living trust. Now we are trying to verify if the attorney who drew it up really is trustworthy and experienced with living trusts. We need a trust review. Specifically:
- Is it better to go to the same attorney for this "check up" or someone new?
- Since we are asking for a trust review, would the fees be much lower than if we were starting from scratch?
A: You were smart to use an estate planning attorney instead of using off-the-shelf forms or packages from a self-service legal website. You are smart to check and update your living trust, too. Circumstances can change alot in a short time. In fact, it is a good idea to do a trust review and update your trust every three to five years.
Vetting estate planning attorneys using Avvo
I am glad to hear that you are vetting estate planning attorneys before hiring anyone. One way to check out a lawyer is to look on Avvo. Search for "estate planning" in the Palo Alto area and see which lawyers' names appear with high Avvo ratings. See if they've answered questions and read the answers to see what you think of their approach.
Checking out attorneys using the State Bar website
Also check out the State Bar website. Use the "Advanced Search" feature and the "Additional Search Criteria" to find a specialist in Estate Planning law. Less than 1% of all California lawyers are certified as specialists in Estate Planning. In order to be certified, a lawyer has to pass a specialized bar exam and meet rigorous experience requirements.
Also, check out these individuals' websites to see what their approach is to estate planning to see if you think the "chemistry" will be right.
What you can expect to pay
You get what you pay for! If price is your most important criterion, then skip all of the above and just phone lawyers until you find the one with the lowest price. Just remember, if they don't do it right, it cannot be corrected after you die or become incompetent.
Depending on the complexities of your situation (and whether you're married or single, have children who need to be protected, etc.), an experienced attorney's fees will be anywhere from $2,000 to $10,000. As a very rough rule of thumb, figure out your net worth and multiply by 0.10% to 0.25%. That usually approximates the complexity of your estate and the cost of planning for it properly.
For example, if you have an estate worth $3 million dollars, you should expect to pay between $3,000 and $7,500... a little less if your situation is really "plain vanilla"; a little more if it's complex.
Look for the next article on trust reviews
In the next article on trust reviews, tentatively titled "How is Review of a Living Trust Different from Estate Planning?" I'll show an example of what we examine when we do a trust review, and how a trust review differs from creating an estate plan.
Getting legal help
If you are currently working with a highly qualified estate planning attorney that you are comfortable with, it is probably best to continue working with him or her. On the other hand, if you have doubts about the advice you are getting or the experience you have working with the person, it's time to look elsewhere.
All the best,
Peaceful moments with a child, grandchild, or other family member may be the very best thing about taking vacation. Before you head out of town, tick off essential estate planning steps like updating your beneficiaries. Knowing you've planned for everything you own and everyone you love might make the time together even more fulfilling. Learn more »
Taking a break this summer?
It may seem like a drag to discuss estate planning in these warm summer months, but see if you can fit in some essential steps. Among other benefits, you may feel a deeper sense of well being during family visits and vacations, if you know you have planned for everyone you love and everything you own.
My mental tick list
Here are the things I mentally tick through before any big out of town trips:
- Have I chosen a reliable trustee or executor?
- Does my trustee/executor have access to my key documents? (If they are in a safety deposit box or safe, for example, do they have a key or combination handy, just in case?)
- Do I have enough insurance coverage?
- Are the beneficiary designations on my life insurance, retirement plans and annuities, in synch with my estate plan? (For most people, they are not.)
- Is my living will and healthcare power of attorney up-to-date with the HIPAA Act?
- Has anything changed that my advisors need to know about before I go?
- Are there are provisions in our estate plan for care of our family pets, should anything happen to me?
Getting essentials squared away before you leave town
Have I convinced you to at least check into these things before you leave town? If so, we are here to help. And unless you're leaving town tomorrow, we can probably get essential work done before you go -- freeing you to take a restful, guilt free holiday. Get started using a convenient form here at our website »
Checklists and guides that may help you
Here are guides I've published that might help you:
All the best,
A durable power of attorney can help you avoid incompetency proceedings.
One benefit of a living trust, in addition to avoiding probate for trust assets, is that you can name a trustee to manage your estate if you become incapacitated. But a living trust can’t hold, for example, qualified retirement plans. Such plans require you, the participant, to be the owner.
So if you become disabled and your family needs access to your 401(k) plan, an incompetency proceeding would be necessary. Fortunately, you can avoid this time-consuming and potentially unpleasant step by executing a durable power of attorney for property while you’re healthy.
To do so, you simply appoint, in writing, another person, such as a trusted family member, as your agent. He or she then has the authority to make decisions regarding any property you couldn’t transfer to your living trust.
Typically durable powers of attorney for property are drafted to become effective only if the creator becomes incompetent, as most people don’t want their agents to act for them until that time. For example, you may add a provision stating that your property power of attorney becomes effective only after your doctor certifies in writing that you’re unable to manage your business affairs.
Alternatively, some situations may warrant the property power of attorney to become effective on its execution. To be effective, the durable power of attorney must be properly drafted, so professional legal advice is critical.
All the best,