Planning for Life

How Pushy Should Attorneys Be?

Posted by Harry S. Margolis on February 10, 2015

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By Harry S. Margolis

When I was in law school I took part in a clinic that taught us lawyering skills as an adjunct to the substantive law taught in the other classes. The clinic taught a theory of client counseling that I have moved away from in my actual practice. We were taught to empower clients by explaining the legal consequences of particular choices they might make and based on the information that we provide to leave to the clients to decide how to proceed.

While this remains my approach in large part, I have found that clients want my opinion as to the best way to proceed. And as I have grown more experienced, I have grown more comfortable offering my opinion and in many cases pushing one choice over another.These opinions are often based on experience of representing thousands of clients and client families over three decades of practicing law. In choosing whether or not to offer my opinion, I try to differentiate between choices that seem more a matter of personal preference and those where I think there is a right and a wrong choice. Here are a few examples:

  • Estate taxes. With the federal government now only taxing estates over $5.43 million, only a very few of our clients have taxable estates. However, the threshold in Massachusetts is $1 million and we have many clients with Massachusetts taxable estates. With planning that involves creating trusts and separating assets, we can save these clients (or really their children) up to about $100,000 in Massachusetts estate taxes. While I think it makes sense in most cases to take these steps, I can also understand clients' desire to keep things simple and avoid estate tax planning. After all, they may well spend their savings down below $1 million before the second spouse passes away. This is an issue on which I do not push hard.
  • Avoiding probate. As with estate tax planning, clients can save their children some expense and trouble by using revocable trusts to avoid probate. I think it makes sense to take this step, but the probate process is not as egregious as some salespeople of "living" trusts make it out to be. Again, this is an issue where I would make a recommendation, but not push it. On the other hand, I believe strongly that revocable trusts are ideal vehicles for planning for incapacity, putting a co-trustee in place ready to step in when needed.
  • Special needs planning. On the other hand, for parents with children with disabilities I am a strong advocate of using special needs trusts to protect and manage what inheritance their parents might leave them. I have seen the unfortunate consequences of parents leaving assets directly to children with special needs or choosing to disinherit them. (See my recent blog post on this topic.)
  • Long-term care planning. Our firm does a considerable amount of long-term care planning, much of it to qualify for MassHealth coverage of nursing home or other long-term care. Based on experience, I often express strong opinions in this regard, as likely to discourage planning steps as to encourage them. For instance, clients who come to see us in their 60s, who are healthy and financially secure, may ask about putting their house in an irrevocable trust to protect it in case they need to qualify for MassHealth coverage. I would discourage them from doing so. They are unlikely to need care for 20 years, they may need the equity in the home or simply want to move somewhere else, and we have no idea what the MassHealth rules will be in 20 years. On the other hand, if the same clients came to see us in their 80s, we may recommend protecting their home by placing it in an irrevocable trust, of course taking into consideration their health and other assets.
  • Complicated circumstances. There is no one strategy fits all recommendation when it comes to any legal advice. Many situations are complicated. Often a myriad of legal issues and client goals intertwine. It can be very difficult for an attorney to determine the best course of action, and sometimes even more challenging for a layperson who doesn't deal with legal issues on a day-to-day basis. The other day I consulted with an older woman in her late 80s. She is spending down her money paying for her husband's care in an assisted living facility and helping to support her daughter who has fallen on hard times. The daughter also spends a lot of time helping the client who can no longer drive due to macular degeneration. The daughter has suggested that the mother create a life estate in her home, transferring the remainder interest to the daughter. We recommended that the client not do so for a number of reasons, including: (1) the transfer would create a five-year period of ineligibility for MassHealth for the client and her husband; (2) the house could become vulnerable to the daughter's creditors; (3) the equity in the home would become unavailable should the client need it to pay her living expenses or for her husband's care; and (4) that should the client predecease her husband, there's not guarantee the daughter would support him since he is not her father. Instead, we recommended that the client create a trust in her will for her husband that would protect and manage the house (or the proceeds of its sale) for his benefit should she predecease him. Such a trust also has MassHealth planning benefits. We made a strong recommendation, rather than simply leaving it to the client to decide.
  • Pot odds. There is a concept in poker that it can make sense to stay in a hand even when it looks like you are going to lose it. If it's the last round of betting and there's a lot of money in the pot, then adding a little more for a potentially large payoff if another player is bluffing makes sense. There are cases where we might advise clients that the odds are against them, for instance that a particular trust will pass muster with MassHealth, but that it makes sense to proceed because the cost of pursuing the matter is so much less than the benefit gained if successful.

The case described above under "complicated situations" involved MassHealth planning, estate planning, some capital gains tax issues, and protection of the client and her husband. It's not unusual for our cases to involve at least this many issues. While the client understood each of the concepts we discussed independently, it was difficult for her to integrate them all. That was something we could do more easily and which helped us move towards a plan that she accepted.This might not have occurred if we had simply followed the law school model of laying out the legal options and letting the client decide how to move forward.

In short, my role as an attorney has changed over the three decades since I graduated from law school to one as a counselor as much as a legal resource and advocate. I believe that this broader role brings more value to clients and better fits what most seek when retaining an attorney.

Topics: Estate Planning

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