FAQs about preparing for the estate planning process

I am getting ready to go to a lawyer for estate planning. What should I do to prepare? Getting a will or living trust to meet your needs doesn't have to be complicated. There are things you can do before meeting with the lawyer that can help move the estate planning process along.

What should I do first? First, you need to think about why you are going. For most people, this will be to have your will drawn and to get related powers of attorney. Think about the purpose of the will -- it determines who will get your assets at your death. Therefore, the attorney will need to know what your assets are and who you want to leave them to. These are the two broad categories, and there are details in each that need to be shared with the attorney. So you need to be prepared to tell your attorney whom you wish to receive your assets and what those assets might be.

If I do not intend to leave my assets to my family, but to other people or charities instead, do I have to leave my children, parents, siblings or spouse anything, even a dollar, or can I disinherit them completely? You do not have to leave anyone anything, not even a dollar. It is best to acknowledge in a will that you are married and have children, or siblings, etc., but then you may proceed to leave all assets to whomever you wish. However, it will be important to talk with your attorney about the reasons you are disinheriting your family members so that he or she may be able to take special steps to avoid a potential will contest.

Should I tell my attorney about my child with an alcohol problem or my other child who may get a divorce? Yes, it is very important to discuss with your attorney any special needs your beneficiaries may have. Some clients have children with alcohol or drug problems or potentially divorcing spouses or general creditor problems. Often our clients want to protect their child’s inheritance from being wasted by either the child himself or by grasping creditors or divorcing spouses. There are ways within a will or trust that the estate planning attorney can provide for these special needs so by all means discuss this openly with your attorney. Of course some children with mental or physical handicaps have their own special needs. This usually requires specialized planning and an attorney experienced in this area can help tremendously. Click here for more information about planning for persons with special needs.

How detailed a list should I make of my assets? The attorney needs to know the general nature and extent of your assets. He or she does not need to know which stocks you own, just that you own stocks and bonds, real estate or whatever, and a general idea of their worth. It will be important to tell the attorney how your assets are held. For example, is your account at a brokerage firm in joint ownership with right of survivorship with your spouse or another person, or is it held as tenants in common? For assets and accounts with beneficiary designations, like IRAs, annuities and insurance, you need to know the currently named beneficiaries. It is especially important to tell your attorney which of your assets are in qualified retirement plans, such as IRAs or 401ks.

Do I need to bring a copy of the deeds to any real estate I own? No, at least not to the initial meeting. You need to tell your attorney what real estate you own and where it is located. If the real estate is located outside Texas, be sure to mention this to the attorney. Also tell the attorney who the record owner is. For example, if it is your house, you and your spouse are probably on the deed as record owners, but if you inherited 20 acres from your mother, the property is likely to be in your name alone. This is important for the attorney to know.

Do I need to list all my personal property, all the furniture in the house, jewelry, cars, etc.? No, this usually is not necessary. However if you have specific items of property that are unusually expensive, such as jewelry, art or antiques, you should bring this to the attention of the attorney. What is "expensive" in this case varies with the size of your estate. In general, if you could sell the item for $5,000 or more, then you probably should mention it. You may have paid more than $5,000 for many items in your home, but if you try to sell them, they may be worth much less. This is different from the value used to insure the items. Usually you insure an item for its replacement value, not for the value at which it could be sold by you. Whenever there is a question, mention it to your attorney who can then advise you.

My assets, even my bank accounts, fluctuates daily in value. Do I have to give the attorney a value for all my assets? Yes. Of course in this economy it is expected that values will be fluctuating a lot. Therefore an exact value of your investment portfolio is not necessary. Approximate values are satisfactory. You should be able to tell what you normally keep in your cash accounts. You probably will not have to provide your bank account numbers or investment account numbers, so do not spend time writing all these down.

How can I tell the value of my real estate? Does real estate have to be valued? For estate planning purposes, the attorney will need a “ball park” value for your real estate, whether it is your house, residential rental property or raw acreage. You can provide what your county ad valorem tax appraisal says or what you think the property might sell for, if you have an idea. Usually this is all that is needed for planning purposes.

Do I have to know exactly whom I want as my executor, trustee, guardian for my children, etc. before I meet the attorney? Not necessarily, although you should be thinking about this. The attorney can give you good advice in selecting appropriate persons or entities to do these jobs. You may name multiple executors and trustees (for example, you may name all of your adult children to serve as co-executors or co-trustees), but this isn't always the best idea. The persons you name do not need to be related to you. A family friend, a bank or another professional corporate fiduciary might be appropriate, with or without a family member serving as co-trustee. All of these are options. The right answer for you will depend on the dynamics unique to your family. The attorney can explain the pros and cons of the different kinds of designations and help you think about what will work for your family.

My last attorney asked me how much of my property was community property and how much separate and I did not know the answer. Do I have to know this before I can get a will prepared? No. Usually this is a legal question that an attorney will have to determine. The attorney will need you to provide information to help him or her make this determination. For example, was the asset earned during your marriage (community property) or was it received by gift or inheritance by one spouse (separate property)? Sometimes it is harder to tell, such as a retirement account which one spouse owned prior to marriage but which was added to during marriage. Some assets started out separate and become all or part community, like an investment account owned prior to marriage with interest and dividends reinvested after marriage. In Texas, income from separate property earned during marriage is community property, and this can confuse the issue. In many cases, the separate or community character of assets is not important to the estate planning process. The attorney will help you decide how important these designations are in preparing your estate plan.

Should I try to prepare a complete financial statement of our personal finances for the attorney, or is there a form I can use? Some estate planning lawyers prefer that the client complete an estate planning questionnaire before the initial visit, while others do not. A financial statement has some but not all information needed. At The Karisch Law Firm, PLLC., we provide a form which may be used by our clients to provide us with information, but its use is not required. Many of our clients find that the form helps them start thinking about the issues which are likely to come up during the estate planning consultation. Click here for our form (or here for the form in Word format). This form should be helpful whether you use an attorney in our firm or any other firm.

How much should I expect to pay for a will and related documents? This is a hard question but one you should discuss with the lawyer at or before the initial meeting. Often people call us and ask what their estate plan will cost. This is like calling a doctor and saying you have a stomach ache but you want to know what it will cost before you come to see him. The cost depends on the problem. This is the same in an estate plan. The cost usually will depend on the complexity of the documents you need. The complexity depends on the nature of your family or other beneficiaries and your assets. However, you should ask whether the attorney bills by the hour or charges a flat rate for wills of a certain category. You can ask for “ball park” amounts to give you some idea of the cost. You can ask if the initial meeting is free. Sometimes attorneys give an initial free consultation. In our firm we do not because the information we give at the initial meeting is usually the most valuable legal advice we provide in an estate planning engagement. Never hesitate to ask about fees up front. If an attorney refuses to discuss fees, find another attorney. You have a right to a written fee agreement before you retain the attorney to prepare your documents. You should expect to pay a retainer, which will be some or all of the anticipated fee up front. If the amount of the fee exceeds what you can pay at one time on your budget, you can discuss paying by credit card or paying over several months. Estate plans for a husband and wife should not cost twice as much as an estate plan for a single person just because there are two sets of documents. Often they are mirror images of one another, making the second set of documents less expensive to prepare.

Choosing an estate planning lawyer and knowing what to bring to a first meeting should not be overwhelming. Choose your attorney based on recommendations from other professionals, such as CPAs, other attorneys or financial advisors, or based on friends’ recommendations. Check to see if the attorneys have an informative web site, which can be an indicator of their level of commitment to helping their clients. Call and ask all questions even before the initial meeting, but know the attorney will probably not answer legal questions over the phone before he is actually hired as your attorney. Contact The Karisch Law Firm, PLLC for more information.