Lawyers are taught to limit the scope of representation. It’s something we are taught in law school, and when we enter practice, something that is drilled into us in every legal practice management program we attend.
We are taught that we must be very specific about clarifying the exact legal services we have been hired to perform so there isn’t any ongoing representation. If there is ongoing representation, many things can go wrong and the attorney can be sued. Defining the services the attorney will provide not only limits the potential liability, but ideally defines for the client what legal work they should expect for the fees charged.
What’s wrong with that? Plenty.
For the estate planning attorney, this traditionally translates into providing a bundle of estate planning documents and saying everything else is beyond the scope of representation. This is one of the reasons why aligning (funding) assets with the estate plan is not typically included in an estate planning engagement. Lawyers are not trained in trust funding in law school and it’s typically passed off to the client since it’s not viewed as legal work.
In recent years, some attorneys have taken on the funding of trusts for the client as a separate engagement. But even the attorneys who fund trusts after documents are signed do not solve the fundamental problem that plans still become outdated and do not work.
Each representation (i.e., drafting documents and then funding the trust) is a separate engagement ending when the task is completed. As a result, estate planning attorneys are typically categorized as transactional attorneys: each representation is based on a transaction.
In the estate planning arena, the transaction or legal service is the drafting and execution of a will, trust or other estate planning documents. For the more progressive lawyer, retitling assets becomes a second engagement where the client is almost always charged by the hour. Once the documents are delivered or the trust is funded, our representation has ended and the client’s plan is complete.
After that, the client makes the faulty assumption that his or her affairs are in order. But what does that truly mean? When we look at it from the client’s perspective it means, “When I die or become incapacitated, my family will be taken care of based on the law, my assets, my family situation and my wishes and desires at that time.”
The client wants his or her family to be taken care of when it really matters! The client and attorney make the mistake of assuming that just because documents are drafted and a trust is funded, and/or clients are given instructions about retitling assets, that the client’s family will be taken care of at the time the client dies.
Perhaps if the client dies the day after the documents are finalized, assets are titled property and the trust is funded, the protection is in place. But that rarely happens.
When usually happens is that no one calls the estate planning attorney when large financial transactions take place, when tax law changes, or when a spouse dies. The estate plan is out of date and the family does not enjoy the protection that they thought was in place.
They don’t call the attorney for two reasons:
1 – They don’t want to incur any further fees.
2 – They don’t see their attorney in the same way they see a CPA or financial advisor who has regular meetings with them.
3 – They don’t understand the attorney’s role as a trusted advisor.
Can this change? Yes – that’s what the Client Care Academy is all about. We are teaching lawyers how to provide clients with services that elevate how they take care of clients and create sustainable client care programs that are good for the clients and good for the practice.