Estate planning depends on relationships

Steve Gammill
Steve Gammill

Even the best estate planning in the world can crater and fail. But doesn’t that indicate it wasn’t the best plan after all?

The middle-aged man in my office was angry and upset. Robert was the son of an elderly rancher client who’d died in an accident a few weeks earlier, and things were spinning out of control. There were seven children, and a couple of them were asserting themselves into matters the one son thought he should be handling, in particular decisions concerning the operation of the ranch. This son was designated in the estate plan to inherit and operate the ranch and had the unconditional right to purchase his siblings’ interests over time. He was the son who had worked shoulder to shoulder with his father during most of the recent years. He had, however, replaced a brother who’d held that coveted position up until some major disagreements with Dad.

The seven children didn’t all agree. Robert seriously resented their interference and feared his siblings wouldn’t accept the estate plan. It wasn’t, the siblings told me at our first family meeting, what Dad wanted. “He told me that the ranch would belong to all of us when he and Mom were gone,” one daughter said.

Four children had four different ideas as to what should happen. Three sat quietly and said little or nothing, assessing where they should line up. I could almost see the wheels turning.

From the time the plan had been created nearly 20 years ago, through the deaths of both Mom and Dad, there’d been little conversation between the parents and their children about provisions and absolutely no family meetings with me to teach and explain the plan even though I’d been advocating that over the years. I occasionally met with the parents, but always to make changes.  One of those changes came when Dad changed his mind as to which son should inherit and operate the ranch.

After two family meetings, the lines were clearly drawn. These children couldn’t compromise and would very possibly never again have a caring relationship with each other. Was it any surprise expensive and protracted litigation resulted?

Maintaining an ongoing relationship with an estate planning attorney is more than just desirable. In most client families, it’s essential. It involves face-to-face meetings, sometimes with all members of the family, at least once every couple of years and regardless of whether there are articulated reasons for a meeting. In fact, it’s often preferable there’s no agenda other than discussing life and what’s happening in the family.  That kind of approach isn’t common in traditional estate planning practices, but it should be. In my practice, it’s essential if the client is to end up with an estate plan that actually works when it’s called upon.

Take the case of Walter the baker. Walter and his wife created a trust-based estate plan many years ago. After the wife died, Walter managed things himself. But when he gradually became unable to make financial decisions,  his daughter took over.

Apparently, a trusted financial advisor had recommended Walter and his wife cash in a number of investments and purchase annuities. The advisor further recommended they not title the annuities in the trust or name the trust as beneficiary. It was an expensive, but very necessary, undertaking to unravel those mistakes and the risk was great Walter would find himself unable to qualify for government assistance if he failed to live an additional five years. He passed away within the year.

An ongoing relationship with Walter’s estate planning attorney would have nipped that whole situation in the bud.