Let me share a story with you about Fred and Wilma, who I recently sat down with to discuss their estate plan…
I walked into the conference room and before I sat down, Fred pulled out three large binders and plopped them on the table. It made an alarmingly loud noise – almost like foreshadowing as to what was to come! As we started talking, I learned that the lawyer who prepared their plan was a neighbor of a friend from church and they “just want out of the plan altogether, but they can’t.” I remember thinking to myself, “What an interesting choice of words.”
I start flipping through binder 1 … and binder 2 … and finally binder 3. I had my head wrapped around the entirety of their existing plan. Binder 1 and binder 2 were easy to “get out of” if that was their goal – they were both straight-forward Trusts. However, there was an issue about binder 3, which contained another Trust – and this one was going to be difficult to “get out of.” It was drafted so that a bank was placed as their acting Trustee; Fred and Wilma had no right to amend (to take the bank off as Trustee); and ultimately Fred and Wilma felt like they had no control of their money. In fact, they were right. Due to the terms of this trust, the remaining option to “get out of” this Trust was to terminate it through a Court Order. That is, we have to go to Court, which means additional hassles and fees for the client.
So, what should you take away from this? What should we all learn from this? Two things! First, please choose a lawyer wisely. Perhaps it is not a great decision to use your friend from church’s neighbor – unless they have experience in this “stuff” and you feel 100% confident that they are qualified to serve your estate planning needs. Second, please know what you are signing. If a lawyer plops a pile of paper down in front of you and fails to walk you through the material, use your voice if you do not understand. Stop them – ask for clarification. While you may not need to know how the sausage is made, you should feel empowered to ask for clarification and sign once you are ready.
These Fred and Wilma situations are absolutely avoidable. I do not think that this is necessarily “on” the lawyer or “on” the client. Instead, it is a matter of choices and the consequences of those choices. Was the lawyer qualified to write Fred and Wilma’s three binders? Absolutely – he has a law degree. Did the lawyer explain everything well enough for Fred and Wilma to understand? Maybe – maybe not. Did the clients voluntarily sign those documents? Absolutely – I feel certain that the lawyer did not force them to sign. What is important here is that it is not about who is in the right or who is in the wrong – instead, like my father always says, “You live and you learn.” So, I share Fred and Wilma’s story with you because knowledge is power – the more you know, the more informed your decisions will be.
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All the Best,