Hiring an Estate Planning Attorney – 7 Things to Know Before You Do

The Top 7 Things to Know Before You Hire a Wills, Trusts or Estate Attorney

You should consider several different questions before you sign an agreement with any attorney, but this is even more important when it comes to hiring a wills, trusts or estate attorney. This attorney will address sensitive family and financial issues that range from helping you pass assets on to your children and close family members, to protecting you from unnecessary taxes, to helping you determine the best person to make medical decisions on your behalf. This is why you need to know the answers to the seven questions discussed in this special report.

#1: Does the attorney offer a free consultation and will he explain what will happen at this initial meeting?

An attorney should offer you a free, no hassle consultation. First, meeting him or her will help to put you at ease and will give you a chance to discuss your case in a frank manner. You will also have a chance to ask questions and to determine if this is an attorney whom you can trust to address your legal concerns. Second, it gives the attorney the opportunity to ask you questions and to learn more about your case. You might discover that you do not get along very well with this attorney. Conversely, the attorney may realize that your case is not the type that he wants to take or is not related to his field of expertise. For this type of relationship to work in an effective and productive manner, both you and your attorney need to be able to work together comfortably.

#2 Does the attorney offer a flat fee for the services that he will perform and will this be put in writing?

Every attorney should use a written agreement, which is known as a retainer agreement. In this agreement, the attorney should clearly state the fee that you will be charged and honor this agreement. The attorney should clearly explain the fee, the services that he will perform, and should also clearly explain the options that are available to you to pay this fee. You should not sign this agreement until you understand how much you will be charged, what the attorney will do for you, what information he will need from you, any deadlines involved, and any other obligations that you are required to perform. You should always feel free to ask the attorney questions if you do not understand something in the agreement or otherwise. You should also ask about the expected completion of the work.

A flat fee encourages the attorney to work in an efficient manner and also prevents you from receiving an unexpectedly large bill upon the completion of the services. This can happen if it takes the attorney longer to complete the work than he initially thought.

#3 Does the attorney guarantee his service? Will he refund your money if you are not completely satisfied?

Your attorney works for you and is being paid to help you plan your estate. You should not tolerate an attorney that will not refund your money if you are not completely satisfied with the work. Additionally, your attorney should be willing to revise your documents that he is initially drafting. However, after he has drafted them and you have expressed your satisfaction, you should not expect the attorney to revise these documents unless you have kept the attorney on retainer. Please note that no attorney will guarantee results if your matter is being litigated in court.

#4 Will the attorney help you make wise choices about insurance, saving for your children’s college, and retirement planning?

Your attorney should help you make decisions about the most appropriate documents and vehicles to accomplish your estate planning objectives, but should also assist you with buying insurance, saving for college, planning for retirement, and all of the other challenging decisions that will arise. In fact, your attorney should have a team of trusted advisors in place in order to help you make the best possible decisions.

If your attorney is unable or unwilling to advise you on these matters, then you should seek out an attorney who will do so. Having such an attorney will prevent you from making expensive and unnecessary mistakes, and will save you time in having to hunt for additional advisors.

#5 Does your attorney have a process in place to respond to your phone calls and emails quickly in case questions arise? Will your attorney keep you informed about how your matter is progressing?

Your attorney should be able to answer your phone calls, emails, and questions quickly. You are paying this attorney for service and for professional guidance and attention, not just for the drafting of your estate planning documents. How often have you heard from friends and loved ones about an attorney that takes days, weeks or more to respond to phone calls? Do not tolerate such unprofessional behavior. Ask your attorney about this and if he is unable to convince you that he has such a process in place, then continue your search for an attorney that will get back to you in a time efficient manner.

#6 Does your attorney have a process for helping you capture and pass on not only your physical and financial wealth, but also your intellectual and spiritual assets, as well as what is important to you?

Some attorneys recognize that wealth is not measured solely by your net worth, by the value of your brokerage and retirement accounts, but is also measured by who you are as a person. Your intangible assets, such as lessons that you have learned over a lifetime of building wealth, or the wisdom you have accumulated through your life experiences that you would like your children to know more about, are very valuable, almost priceless. These should not be forgotten.

When deciding whether to hire an attorney, be sure to select someone who will help you capture, document, and pass on all of your assets, including those intangible ones that are often overlooked.

#7 Will your attorney make sure that your assets are structured and owned in the right way?

You could hire an attorney at the largest firm around and pay him an exorbitant fee, but if your assets are not titled and owned in the right manner, then the plan that he created will not work for you. The attorney that you plan to hire should be willing to ensure not only that your documents are drafted correctly, but also that your assets are structured properly.

Do not be afraid to ask these questions before you hire an attorney to work with your family on legal planning matters. When you find an attorney that says yes to these questions, hire him or her quickly before the practice fills up and he or she stops taking on new clients. Asking these questions and hearing the right answers before you engage a lawyer to work on your wills, trusts, and estate will ensure you put in place legal planning for your family that will work when you need it.

Attorney Negligence: Did It Cost You Your Case?

Attorney Negligence: Did It Cost You Your Case?

Statistics show that legal malpractice claims have become more frequent for the last three decades. There are several instances where a client loses confidence in the abilities of his lawyer because the latter made matters worse instead of providing a resolution to the problem. If you suffered damages due to your lawyer’s wrongful conduct, may it be due to his negligence or intentional act, you may consider the option of bringing a legal malpractice action. However, proving a legal malpractice claim could be challenging as it often involves extensive search for appropriate arguments and corroborating evidence. Despite the existence of actual damages, there are other factors that need to be examined to determine whether a claim of legal malpractice should be filed.

Damages

If the client can prove that the attorney’s negligence or wrongful act resulted in damages, such damages could be recovered by filing a legal malpractice lawsuit. However, there are cases where damages are not easily ascertainable. In such cases, the California Supreme Court held that recovery of damages could still be awarded even if the existence and the cause of such damages are difficult to determine. On the most part, however, damages that are based on speculation or mere threat of future harm are usually not awarded by California courts.

Clients are likely to be more successful with the recovery of so-called “direct” damages. These are damages that have been the direct result of an attorney’s negligence or misconduct. For instance, in a case where an attorney wrongfully advises his client to file for bankruptcy and sell his home for a lower price than its market value, the court is likely to award the client damages to the extent of what he lost from the sale. In another case, a California court awarded damages to a physician due to the loss of his good reputation and the increase in premiums for his medical malpractice insurance due to his attorney’s negligence.

If the client can show clear and convincing evidence that the attorney can be held liable for fraud, malice or oppression, even punitive damages may be recovered, see California Civil Code § 3294. However, client-plaintiffs who have been denied the award of compensatory damages will not be entitled to punitive damages. In general, it is more difficult to prove the existence of punitive damages as courts usually require specific facts to prove that the attorney acted with oppression, fraud or malice. In one rare case, the court of appeals awarded punitive damages due to an attorney’s “conscious disregard of plaintiff’s safety”. In that case, the attorney, who was also a physician, advised his client to postpone the surgery in order to strengthen their medical malpractice lawsuit even though he knew about the urgency of a surgery.

Furthermore, if the client-plaintiff lost his claim for punitive damages in the underlying action, it is very unlikely that courts will award him punitive damages in a legal malpractice lawsuit. The California Supreme Court held that such damages are based on speculation and plaintiffs should not be entitled to damages that cannot be proven with certainty. Otherwise, lawyers would be exposed to more risks of liability, resulting in an increase in the cost of malpractice insurance.

Attorney Negligence

In a legal malpractice action based on the attorney’s negligence, the courts will look into four factors. First, the client-plaintiff needs to show that the attorney-defendant has the obligation to apply the skill, prudence and diligence required from his profession. Second, there has to be proof that the attorney failed to fulfill the above mentioned duty. Third, the client-plaintiff also needs to show that the attorney’s breach of his duty resulted in the damages he suffered. Lastly, as mentioned above, the client-plaintiff needs to present evidence of the existence of such damages and not just mere speculation. According to the California Supreme Court, client-plaintiffs who are facing criminal charges need to prove their actual innocence before they can bring an action against their attorneys. This way, the clients who have been found guilty by a criminal court would not be allowed to go after their attorneys and recover civil damages. An exception to this rule is a malpractice action that is not based on the quality of legal services provided by the attorney. For instance, a fee dispute between the client and the attorney can still be pursued in court even if the client was charged by a criminal court because such a dispute merely involves the attorney’s billing practices.

Typical Cases of Malpractice

The most common basis of malpractice action is the failure of an attorney to adhere to the deadlines set by the Code of Civil Procedure as well as other statutory filing deadlines. As mentioned above, attorneys are expected to apply the required skill, prudence and diligence in providing legal services. The failure to file a lawsuit, initiate a proceeding or bring an action within the so-called statutes of limitation could constitute a strong claim for legal malpractice.

An attorney can also be held liable if the court in the underlying case issues a default judgment against his client due to his failure to file a pleading, see California Code of Civil Procedure § 585. Furthermore, if he fails to relieve his client from the default by filing a motion in a timely manner, namely within six months after the issuance of the default judgment, the client would have another ground to file a malpractice lawsuit against him assuming that the motion could have been successful.

It is also possible to hold an attorney liable for not raising viable defenses in a legal action. In such cases, however, the client-plaintiff needs to show that the defenses that were not asserted can be proven in court and would have led to a more favorable result. In one case, for instance, a California court denied the award of damages to the plaintiff because the attorney decided to leave out weak defenses.

In general, attorneys have an obligation to adhere to their clients’ preferences particularly with regard to legal decisions involving their substantive rights. The failure to follow these instructions can be a basis for a malpractice action. In one case, for instance, a California court held an attorney liable for his failure to file a complaint despite of his client’s specific instructions to do so.

However, courts have held that an attorney can make decisions without his client’s consent if authority has been given in an agreement. Decisions involving procedural matters are also instances where attorneys can act independently. California courts have not yet drawn the line as to how to differentiate procedural matters and legal decisions. Thus, establishing a legal malpractice action based on the failure to adhere to clients’ instructions could pose several challenges. On the other hand, courts have consistently held that attorneys are not obliged to follow instructions that can result in an illegal or unethical conduct. Furthermore, an attorney can reject a case if he determines in good faith that the case lacks merit.

Another frequent basis for a legal malpractice action involves settlements. According to the California Rules of Professional Conduct, an attorney needs to provide his client specific information pertaining to the settlement such as the amount, and the terms and conditions of the offer, see California Rules of Professional Conduct Rule 3-510. To be successful with a malpractice action, a client-plaintiff needs to prove three things. First, there has to be evidence showing the attorney’s failure to inform the client about the settlement (or parts of the settlement). Second, the client-plaintiff needs to attest that he would have accepted the settlement offer if he had known about it (or had sufficient information about it). Last, evidence should be presented that the client would have benefited more from the settlement than the actual outcome of the case. The amount of damages in such a case will be determined by the difference between the actual outcome of the case and what the client-plaintiff would have received from the settlement offer.

Statutes of Limitation

In general, clients can file a legal malpractice lawsuit one year after the discovery of circumstances that support the malpractice claim or four years after the attorney’s act of misconduct, whichever comes first, see California Code Civil Procedure § 340.6(a). There are, however, exceptions to this general rule that could prolong the periods of limitation, giving plaintiffs more time to file a lawsuit. For instance, periods where the plaintiff is physically unable to bring a legal malpractice action against his attorney will be considered as tolled. The same applies to cases where the attorney-defendant is still representing the client-plaintiff in the same case where the attorney’s misconduct is at issue. In such cases, the time limit for bringing a legal malpractice action could be exceeded.

Seeking Legal Advice

The success of a legal malpractice lawsuit will mainly depend on the evidence and arguments which will support the claim that the attorney has been negligent in representing his client. Even procedural matters such as determining the applicable deadline could pose some challenges as well. Thus, in cases that involve complex issues, consulting a lawyer who is experienced in legal malpractice cases is inevitable in order to prevent the occurrence of further damages to the client.

Sources:
California Code of Civil Procedure
California Rules of Professional Conduct

For further reading:
George Lindahl J.D., California Torts, 2012
Suzan Herskowitz Singer, Attorney Responsibilities & Client Rights, 2003
Robert W. Schachner Esq., How & When to Sue Your Lawyer, What You Need to Know, 2005

Should You Create a Power of Attorney?

There are some few exceptions as the right to get married or vote. As an individual and principal you can grant unlimited power known as a general power of attorney.

The attorney-in-fact generally can only carry out an action if the individual and principal can exercise the same power. This stops the attorney-in-fact from acting when the principal is incapacitated. If an individual is unable to sign a contract the attorney-in-fact is also unable to sign a contract for the principal. But if you have a Durable Power of Attorney the attorney-in-fact is allowed to execute the powers granted by the principal even after the principal becomes ill.

At the Time of Death A Power of Attorney Ends

Whether you have a Durable Power of Attorney or you do not, at the time of death all power of attorney ends. If the individual and principal has granted attorney-in-fact rights to perform certain tasks, upon death all those rights are terminated.

How A Power of Attorney is Revoked

As long as you are alive you have the power to revoke the power of attorney. To revoke the power of attorney you must contact your attorney-in-fact that the power of attorney has been revoked. You can also detail at what date the power of attorney will expire.

A Springing Power of Attorney

A power of attorney can be designed to spring into effect if you become disabled or at some predetermined time or event. This is a springing power of attorney. The springing power of attorney prevents your attorney-in-fact from using the powers while you are able to take care of them yourself.

The attorney-in-fact must prove that the individual where your powers are concerned is in fact disabled and can not perform the tasks needed. You will need a written document from the physician or hospital that you are incapacitated.

It should be a current document and not several days old or it could be questioned as to whether you are still ill or disabled. So to save yourself, added turmoil, and be required to furnish a more current document take care of it the same day.

Instant Power of Attorney

Your powers of attorney can become effective immediately, as soon as it is signed, This is the type of power of attorney people use when they will be in another country for a long period of time and will not be available to handle such matters. It is generally a durable power of attorney that will expire in one year. You can also have provisions built into the powers of attorney will you can extent it. If you become incompetent or ill when the power of attorney expires, and you’re attorney-in-fact or agent, will need to go before the court to get approval to continue.

Medical Decisions

When you have a durable power of attorney it can be used to allow your attorney-in-fact the power to make medical decisions in case you become incapacitated. Most individuals have separate power of attorneys for medical and financial affairs. Sometimes the same person handles both powers of attorneys.

How to Choose your Attorney- In-Fact

Since this is one of the most important documents of your life it goes without saying it should be the most trusted of people with impeccably credentials who understand your wishes And how to handle your business. One other thing to bear in mind is when you give someone this power they have the ability to do as they wish, and may not follow your instructions. That’s why you must be very careful. When it comes to money sometimes people do things for their own interest. Your attorney-in-fact is a fiduciary. Which means that they are there to manage your assets to help you, and not themselves. The person you choose will be called under difficult circumstances. So generally it will be a family member or a close friend and sometimes an attorney you trust and respect. If you do not have a power of attorney in place it will fall to the laws of the state.

Common Mistakes Associated With Bankruptcy Attorney Fees

Bankruptcy attorney fees differ when filing for bankruptcy. Different fees will be charged by lawyers for the two types of insolvency i.e. chapter 7 and chapter 13. Moreover, if the debtor can somehow prove financial hardship then the bankruptcy attorney fees can be completely waived off. The most common mistake that many people make when dealing with an attorney is that they simply accept any level of fees that the attorney quote for them in order to secure their services. Many will not ask questions or request the attorney to justify the fee. The efficiency of the attorney in dealing with your case should be questioned and should be in line with the insolvency attorney fees being demanded.

Clients who have filed for insolvency and are looking for a good attorney who will represent them in the best way possible will also make the big mistake of paying the bankruptcy attorney fees using their credit card. This is because they assume that the credit card debt has been wiped out. If the transaction is successful, the creditor might claim that the debtor had the money all along and was even able to meet the bankruptcy attorney fees. He might claim that the debtor filed for insolvency so as to avoid paying the debt and this might impact negatively on your case. The best thing that you can do is to agree on some sort of payment plan with the lawyer so as to avoid such problems.

You should disclose every last detail including all of your assets and financial state to your attorney. There are people who file for insolvency so that they can avoid foreclosures, repossessions, and wage garnishes. Hiding the assets that you would wish to retain from your lawyer will only lead to the eventual loss of these pieces of property. Your attorney will be in a better position to advise you about the situation and give you all the solutions that will help you make a favorable decision if you give him/her more information. Attorney fees will probably incorporate this fact.

The bankruptcy attorney fees should be one of the top priorities of the debtor and he/she should realize that if he/she is able to pay or disburse his debts adequately then the bankruptcy attorney fees will not be difficult for you to manage. You will be able to pay the fee within no time and ultimately be able to service your debts as per the agreement between the debtor and creditors.

Experienced attorneys will normally give the client time to sort out his finances before pressuring him on bankruptcy attorney fees. The less experienced attorneys will want to receive a small deposit of their fees before commencing the job. The major portion of the bankruptcy attorney fees should be retained to pay to the attorney once the job has been done. Any attorney who states otherwise is most often not a very experienced attorney and might not be able to adequately represent you when it comes to your case. Bankruptcy attorney fees can be managed very well if both parties can agree.

The issue of bankruptcy attorney fees is quite sensitive especially if insolvency has left the client in financial ruins. A clear way forward in terms of attorney payment should be agreed upon. The bankruptcy attorney fees might be quite high and it is need to manage it effectively. Most attorneys will want a written guarantee that you will be able to pay them for representing you. If you are unable to pay the insolvency fees, then it is important to discuss it with the attorney so that you can both reach an agreement which is favorable to everyone.

Three Lessons on Durable Powers of Attorney

Durable Powers of attorney are an essential ingredient in a complete estate plan, which allow for continued financial management in the event of incapacity. Under a durable power of attorney, an attorney in fact makes financial decisions on behalf of the principal. The attorney in fact can be given broad and sweeping powers. Conversely, powers granted by a durable power of attorney can be limited to particular assets or powers. Accordingly, the level of control given to the attorney in fact should reflect the particular requirements of the estate as well as the principal’s comfort with a broad grant of authority. In this article, the author teaches three lessons on effective execution and implementation of durable powers of attorney.  

First Lesson: Why would I Need One Now?

The legality of durable powers of attorney stems from the law of agency. Under agency law principals, an individual with capacity may give an agent powers-to contract, to represent the principal or to revoke or amend a trust, for instance. In the case of a non-durable power, the agency terminates upon the principal’s incapacity. Durable powers survive incapacity, but the principal must have capacity at the time of execution in order to effect a valid power.   Accordingly, executing a durable power of attorney for financial management should be done prior to incapacity.

Waiting until one becomes unable to coherently express one’s wishes with regards to financial management decisions is too late, and a court-appointed conservatorship may become necessary. What about the successor trustee designated in my trust, or the executor of my will? Would they be able to step in? Since the principal does not die at incapacity, only an attorney in fact designated under a properly executed power of attorney may step in to make financial management decisions. A last-minute durable power of attorney executed during incapacity would not survive a court challenge, however expensive or damaging the result.

Second Lesson: Consider making the Power Immediately Effective

Often, unwary estate planners will execute “springing durable powers of attorney,” which only become effective upon the incapacity of the principal. Incapacity is determined according to a test set out in the power, such as a determination made by a medical doctor or a court rendered decision. But who wants to go through the expense, difficulty, and uncertainty of initiating a legal procedure to determine incapacity? Isn’t one of the goals of estate planning to prevent unnecessary expense and delay? Moreover, doctors frequently hesitate to make determinations of incapacity because of liability they may face.  

In most cases, a better strategy would be to execute an immediately effective durable power of attorney, which gives an attorney in fact the power to make decisions on behalf of the principal without any finding of incapacity. Many are fearful of an immediately effective power of attorney, reasoning that no one should be given such power over their financial affairs unless they are totally incompetent. If they have such a lack of trust for the attorney in fact, why are they executing a power of attorney in the first place? One would think that even more trust would be required when the principal is incompetent and has little influence over the attorney in fact. Finally, simple measures can be taken to avoid disasters before incapacity. Consider sealing a copy of the durable power of attorney in an envelope labeled “do not open until my incapacity.” In addition to oral instructions, this can help to avoid the scenario of a run-away attorney in fact who uses the power of attorney to access financial accounts before incapacity.  

Third Lesson: What powers should the Attorney-in-Fact be given?

The powers given to an attorney in fact depend upon the principal’s desires and the particular concerns that stem from the types of assets held. The durable power of attorney should be coordinated with the will, trust and advance health care directive to ensure that they do not contradict each other. Namely, should the attorney in fact have the power to create trusts? To rescind or amend existing trusts? Should the attorney in fact have a power to make gifts to himself or to others? These powers can help ensure that preparation for long term care (medical) or tax planning can take place even after incapacity.   Before executing a power of attorney, individuals should be fully informed of the powers that they are granting, and the possible consequences of such sweeping grants of power. In all cases, it’s best to consult with an attorney who can advise on specific risks.

Conclusion

Durable Powers of Attorney are one of the five essential documents in estate planning discussed in this article series. Unlike a will or trust, which mostly deals with decisions that are made upon one’s death, the durable power of attorney deals with life-time financial management and estate planning questions. Individuals should be aware of the risk in waiting to execute the power of attorney; the hazards of “springing” powers; the range of powers that can be given to the attorney in fact; and the risks associated with a sweeping grant of authority to the attorney in fact.   —

This article is intended to provide general information about estate planning strategies and should not be relied upon as a substitute for legal advice from a qualified attorney. Treasury regulations require a disclaimer that to the extent this article concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.