Uncomfortable questions from an estate planning lawyer

For some people, estate planning can be confronting. Among other things, it forces us to:

• acknowledge that we may lose our capacity, independence and autonomy;
• decide who gets what after we die;
• make provisions for end-of-life care.

Facing our mortality can be stressful for many of us. But failing to plan has the same outcome as planning to fail. So all of us need to be brave enough to do what needs to be done, despite our fears.

After 38 years in legal practice, there isn’t much that still surprises me. I think I’ve pretty much seen it all. My law firm is the oldest in South Australia – established in 1848 – and like my father and his father before him, I have spent my entire working life in the law, helping generations of Australian families to sort out a multitude of legal issues. My areas of expertise are Wills and estates, and to help plan and implement your ‘testamentary wishes’, I (and lawyers like me) need to ask some tough questions. Some of them might make you squirm.

Thinking about the following issues in advance can help you prepare for a meeting about your estate plan.

Who will raise your children if both parents die?

A number of clients have told me that they waited until all of their children were grown to discuss estate planning because they couldn’t figure out whom to name as a guardian when the children were young. If you fail to name a guardian, then the Court will do it for you, based on what it deems to be in the best interest of your child. Unless you have confidence that a judge who never knew you has better judgment than you do about matters involving your children, it is best not to stick your head in the sand for 18 years.

What if you all die in a common disaster?

Even if you are certain about where you want your estate to go – commonly to a spouse or partner, followed by children – you need to address the family-catastrophe possibility or what I call the “God Forbid Clause.” For some clients the natural answer is “my parents,” or “my siblings”. For others it is a particular charity. A client may be estranged from his or her family; not have other close friends; or have been too busy to develop a commitment to a charitable cause. For these people, addressing this remote possibility becomes a stumbling block to completing their estate plan.

Are there any other family you haven’t yet mentioned?

Sometimes people ‘forget’ to mention certain ‘black-sheep’ and estranged family members, reasoning that they have no current role to play in their life and therefore the lawyer doesn’t need to know about them.

So if your lawyer asks if you have any other family they should know about, THEY REALLY DO NEED TO KNOW. It isn’t because the lawyer wants to embarrass you, nor that their gossipy. To do their job, the lawyer wants to protect you, your assets and your family members as far as possible. This requires an accurate understanding of the ‘threat-matrix’ in your situation, and an estranged family-member could represent a threat to the other plans and people that you are trying to protect. Don’t tie your lawyer’s hands by treating them like a mushroom!

Have you told me about all the important relationships in your life?

I once acted in a matter where an Adelaide accountant had ‘secret families’. He had 4 branch offices of his accountancy practice around South Australia, and he would spend a week or so at a time in each of them. After his funeral, it emerged that he had a wife, an ex-wife, a mistress and a girlfriend – and he had 2 children by each of these 4 women. Only the wife and the ex-wife knew about each other. The others were a complete surprise.

Whether you are married or single, your lawyer may prod and ask if you are in a relationship with someone and if it has a legal status such as civil union, domestic partnership or a same-sex marriage. There may be legal obligations that come with these relationships that you need to know about.

Your lawyer can’t educate you about the various rights and obligations unless you give them the full picture. Many is the time I have asked for copies of divorce decrees only to have a client realise that they never actually did get around to finalising a divorce. Worse, I have acted in plenty of estates where the supposedly ‘ex’ spouse was still legally married to the deceased, and able to claim a big chunk of the estate as a consequence.

Again, this is information your lawyer needs to know or a long drawn-out lawsuit could erupt after your death, consuming your estate in legal fees. You might think that this is what lawyers hope-for, but it truly isn’t. It is a hard way to make a living and an even harder way to watch someone’s legacy destroyed.

Do you have genetic material on ice – or maybe walking around?

When thinking about children and descendants, science is pushing the boundaries of those definitions. Even if the lawyer doesn’t ask, you should disclose “what’s in the freezer.” In other words, do you have genetic material, such as fertilised embryos, eggs, or sperm, preserved for later use? If you do, it is critical to consider whether you want to provide for beneficiaries conceived after your death. And if you do, for how many years do you want to leave the window open for that birth to take place?

There are legal and logistical limits and complications to work out and your wishes might not be possible to carry out. But they should be openly discussed with your estate planner. Litigation involving children conceived after the death of a legal parent and ownership of genetic material are hot areas of litigation that could be avoided if disclosed, discussed and agreed upon ahead of time.

Further, if you know or suspect that you are a parent of a child that you have not recognised as your own, then your lawyer needs to know this information. Think: babies given up for adoption; or ex-girlfriend with suspiciously familiar-looking child.

Registered Relationship

You may not want to go through the formality of a legal wedding, but there are significant benefits to registering a domestic partnership under current South Australian laws, as well as significant consequences of not doing so.

I understand that one of the desirable benefits of a de facto or domestic partnership is the absence of legal commitment as opposed to emotional commitment. However the law will have a say either way, and your estate planning lawyer needs the whole truth from you to provide excellent and informed advice.

Have you have ever made large loans or gifts to others?

This is often a question that people don’t want to think about, especially if they are supporting family members or friends who have fallen on hard times, aren’t able to support themselves, or got into financial trouble. This can be a difficult issue between couples who disagreed about a gift that the other made.
Your lawyer isn’t asking this question to be nosy. Most family financial arrangements are poorly documented, and it then becomes a question of memory and interpretation as to what was intended, years after the fact.

For example, you made a loan to one of your children. When you die, that loan is likely to arouse the interest (and possibly anger) of all your children. Was it repaid – in whole or in part? Is it an asset of your estate that your Executors need to now collect? Was interest supposed to be paid? Is the debt cancelled by your death or in your Will? Why was one child preferred at the expense of the others?

It doesn’t take much to imagine the hurt feelings, the sense of betrayal, the ugly accusations that siblings in their grief can hurl at each other.

Tell your lawyer, and listen to their advice. We really can help – if you’re brave enough to confront the truth.

Who is going to take care of your pets?

You may not need to set up a full-blown pet trust, but you may want to set aside sufficient funds to be put in trustworthy hands to take care of Fluffy or Fido. If you have animals with long life expectancies (I once acted in an estate where the tortoise was 70 years old, and kept living for another 25 years), you may need more sophisticated planning, including a pet trust. Or, if you don’t have someone you can rely on to take on your pets, especially if you have 17 cats or even two spiders, you may need to find an organisation to take care of your companions for the remainder of their natural lives. Your estate planning lawyer can help you do this.

When do you want the plug pulled?

Almost certainly your lawyer will ask you to consider some sort of health care directive (in South Australia they are called Advance Care Directive), and these can include a ‘Binding Refusal of Health Care’ also known as a Do Not Resuscitate (DNR) command.

When putting your affairs in order, this is a good time to think about timing and under what circumstances we want to ‘pull the plug’. We each have a definite idea as to when quality of life has diminished too far. It is helpful to share that information with your Substitute Decision Makers (healthcare agent) who has to be a part of carrying out instructions. If you don’t share that information, both with your lawyer and with your loved ones, then confusion is likely to be the result all around.

What are your passwords, user names and security questions?

Until a few years ago, none of us really worried about our digital afterlife. We probably just assumed that our e-mail and Facebook accounts would go dormant, and no-one would care.

But some folks have self-published books that are only accessible on line, journalists and photographers may have their life’s work on a hard drive or saved in cloud storage. Plus there could be bank accounts you only receive e-mail statements for, blogs, Twitter, photo storage, and countless other financially and emotionally valuable assets accessible only by computer.

Your lawyer can help you figure out what needs to be preserved, what can be left to lapse, and who should be able to access these various accounts. There are a number of cloud storage sites, such as Dropbox, where you can store your passwords, and then you only need to give someone the password to access that information.

Dealing with digital assets is still in its infancy, and technology is ever changing, but you and your estate-planning lawyer can explore the options and pick the one you are most comfortable with for now.

Did you enter into a prenuptial or Binding Financial Agreement?

You may have forgotten these documents and long ignored them as irrelevant. But after your death, a disgruntled heir could bring them to light them and derail your best estate planning intentions. Even if you don’t consider them relevant any more, disclose them to your lawyer. If they really aren’t relevant, your estate planning lawyer can help you legally terminate them. But to provide that assistance, the lawyer has to know that the documents exist.

Do you have any serious or chronic health issues?

You might not think this is relevant to estate planning. No, your lawyer isn’t wondering if he or she needs to put off a vacation for your imminent probate.

The question of your ‘capacity’ is highly relevant to the estate planning options which your lawyer will discuss with you. You need to plan both for your death and your incapacity, but the legal documents and options are different for each.

Do you own assets jointly with others?

You need to have a discussion with your lawyer as to what this means in terms of the ‘survivorship’ that can be built-into some asset ownership – especially real estate.

In short, you can only give away in your Will what you own in your own name alone at the date of your death. This means that jointly-titled property might not pass through your Will.

Have you bypassed your Will?

It is distressingly common for people to accidentally bypass their own Will, by various legal mechanisms for ownership and control of assets. The most common are:

• Death Benefit Nominations in your superannuation;
• Nominating a beneficial owner other than yourself for life insurance or investment bonds;
• Controlling assets through a trust (these do not belong to you outright, and so your Will probably cannot deal with them);
• Jointly-owned assets (again, these do not belong to you alone).

Your specialist estate planning lawyer will need to know about all of these things (and more) in order to properly advise you.

Have you spoken with your heirs about the terms of your plan?

Too much planning is done in secrecy, unnecessarily. When the heirs have a chance to talk with you about it, many of the later problems, like sibling wars can be avoided. The parents have a chance to explain their thinking, the heirs have a chance to express their feelings and the whole family has a chance for a meaningful dialogue.

‘Chinese secrets’ can be very damaging to families – and to the successful implementation of your estate plan.

When your lawyer concludes with the catchall question, “Is there anything else I should know?” don’t be afraid to speak up. Chances are you’ve covered a lot of territory. Conversations can be circular, rather than linear. Maybe you started to say something and got distracted. Or perhaps you haven’t gotten to something you expected to cover. That additional little detail might not be relevant. Or it might make all the difference.

In my 38-year career, EVERY SINGLE CLIENT has begun their approach to me by saying that their affairs were simple and straightforward. EVERY SINGLE ONE of them. (Quite a few of them were wrong about that, by the way. There must be an unwritten universal law that you mustn’t let the lawyer think there could be anything complicated in your presentation, or they might charge extra!) However, I promise you that NOT KNOWING what you don’t know is a very dangerous strategy. If you try to limit your lawyer’s understanding of your entire situation by being selective with the information you choose to provide, it will be your family who loses out and pays the price in litigation fees down the track. Don’t risk it.

So … put your affairs in order, and create a modern integrated estate plan before it’s too late.

When it comes to Wills, asset protection & estate planning in Australia, you can trust the oldest law firm in South Australia, Genders & Partners to guide you through the tough decisions you must make for your family’s future care and welfare.

If you have any questions, or would like further information, please email us. Would you like a quick phone call to discuss? Feel free email us or use this link and book a timeslot for a free 15-minute phone consultation on my schedule: https://calendly.com/genders

We can help you to protect yourself and your family. We look forward to being of service.

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Disclaimer

The information contained in this document is intended as general information only and has been prepared without taking into account the needs, objectives or financial information of any particular person.

Prior to making any decision, you should assess whether the information is appropriate to your particular needs, objectives and financial circumstances.

While Genders and Partners has taken reasonable care in the preparation of this information, subsequent changes in circumstances (including legislative change) may occur at any time and may impact on the accuracy of the accuracy of this information.

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