What every attorney needs to know about estate planning.

• Author: Lannon, Patrick J.

Since many (if not most) attorneys specialize in a fairly narrow area of the law, many attorneys do not focus on estate planning issues in their day-to-day practice. However, any attorney, even an attorney whose only experience with estate planning was studying for the bar exam, needs to be able to recognize when a transaction or lawsuit the attorney is working on may have potentially significant implications for a client's estate plan. In addition, even an attorney whose representation has no estate planning implications may want to alert a client to the estate planning implications of unrelated events of which the attorney is aware. (1) The results of nonexistent, incomplete, or out-of-date estate plans are, all too often, arguments and misunderstandings, not to mention acrimonious lawsuits, among the deceased's family and closest friends. This is almost always the last thing the decedent would have wanted. In order to help avoid this outcome, an attorney must be able to recognize transactions and events in the client's life that are particularly significant from an estate planning perspective. (2)

The following is a noncomprehensive list of critical transactions and life events that are ideal occasions for attorneys and other advisors to keep in mind as estate planning opportunities for those clients with whom they share close and confidential relationships.

Marriage

Even those with relatively modest wealth should update their estate plans when getting married. Pre-marriage estate planning documents (including beneficiary designations on retirement accounts and life insurance) usually do not reflect post-marriage intentions. Depending on the terms of any existing will and the existence and parentage of children, a surviving spouse may be entitled under the rules of intestacy (or under the pretermitted spouse rules if there is a pre-marriage will in place) to all of the deceased spouse's probate estate, to half of the probate estate, or to half of the probate estate plus the first $60,000 of the probate estate. Non-probate assets continue to pass in accordance with their form of ownership or beneficiary designation. Alternately, a surviving spouse may elect to receive 30 percent of a statutorily determined "elective estate." The actual spousal entitlement will vary, with little regard for the deceased spouse's actual intentions, depending on the presence and parentage of descendants, the terms of any existing will, and the title of existing assets.

Individuals with more substantial wealth will want to consider a prenuptial or postnuptial agreement to clarify rights upon divorce or death, especially if one spouse has children by a prior marriage or if either spouse has family wealth earmarked for future generations. Special provisions should be made to plan for homestead real property, and planning to take advantage of breaks given to married couples to minimize or avoid estate taxation should be considered. Solid estate planning may be the best gift a newly married couple can give each other.

Birth of a...