Taxation & Estate Planning

Know What to Ask Before Hiring an Estate Planner

By Joel A. Schoenmeyer

I'm a regular reader of Lifehacker, even though about 80% of the posts there are way over my head (when I hear "linux," I think of a Peanuts fan with a speech impediment, not an open-source operating system or what have you).

Anyway, a recent Lifehacker post (here) is entitled "Know What to Ask Before Hiring a Financial Planner." It's actually from another site, called Get Rich Slowly. This got me thinking that a similar post about estate planners might be helpful. So here goes -- some questions you should ask:

1. What do you charge? You'll want to know HOW the attorney charges (hourly? fixed fee? other?), and HOW MUCH the attorney charges. Hopefully the attorney will put this in writing in an engagement letter, BEFORE you hire him or her -- that's what most of us do, for everyone's protection.

Note that fixed fee isn't necessarily better than hourly rate, but if your attorney DOES charge by the hour, you'll want to ask how he or she handles small time increments. You do NOT want to be charged .25 hours for a five-minute phone call.

2. How much of your practice is devoted to estate planning? Estate planning can be complicated, and it's something that requires ongoing effort, to keep abreast of changes and new ideas. When I see a Will or trust prepared by a general practitioner, or a document done by a bankruptcy lawyer as a "favor," it usually sucks.

3. Will you be drafting my documents? If you are paying the attorney's hourly rate for a period of time, then you should be getting the attorney's expertise for the entire period. Ditto with a fixed fee situation. Don't pay $300 per hour or its equivalent so that a paralegal can draft your documents.

4. What do you recommend, and why? One size does not fit all in estate planning. So your attorney should be able to tell you the advantages and disadvantages of any estate planning set-up (such as simple Will vs. pourover Will plus living trust). An attorney who tells you that "everyone" has a living trust, regardless of their asset level and personal situation, is a salesman, not an attorney.

5. What type of follow-up will you do? If you are creating a living trust, then that living trust needs to be funded (with ownership and beneficiary designation changes). Who's going to do that? If the attorney does it, what's the fee? If you are expected to do it, does the attorney tell you in writing exactly what you must do?

As a final note, I would suggest talking to at least two if not three different attorneys (and asking the above questions to all of them) before you hire one. You may also want to check at the Illinois Attorney Registration & Disciplinary Commission website to see if the attorney has had any disciplinary action taken against him or her.

Full post as published by Death and Taxes Blog on April 23, 2009 (boomark / email).