Two Attorneys: Would You Choose Right the First Time?


          This analysis refers to the case Murphy v. Housel & Housel, summarized in our blog titled “ESTATE ATTORNEY MALPRACTICE–CASE SUMMARY (MURPHY V. HOUSEL).” To best appreciate the following analysis, read this previous blog summarizing the case.  (Hover over the title with your cursor and click.)

            The two lessons to be learned from this case are straightforward:

                    1. Estate planning law is complex and

                    2. Choose your attorney carefully.

            Estate Planning Law is Complex.  There is a misperception among some lawyers that estate planning law is easy.  This is particularly true for new law school graduates or general practitioners.  Even some experienced lawyers may have a perception that estate law is for those lawyers who could not make it in international corporate law or complex business litigation or corporate mergers and acquisitions. I remember many years ago watching the television series “Boston Law.”  In one episode, the slick and sophisticated corporate lawyers mocked their estate planning colleague with the statements that he “just does wills”—the clear message being that estate planning was far beneath the heights of corporate legal complexities.

            Experienced estate planning attorneys (particularly those who work orchestrating complex estate tax laws, or work transferring a variety of corporate or other assets to beneficiaries, or work litigating an inheritance conflict)—these experienced estate attorneys shrug off such criticisms.  We know our area of law is as complex as any area of law. And we are confident we could be competent international corporate lawyers—it’s just that those areas of law seem so boring!

            The complexities of estate planning law are not limited to high-value estates or perceptions among lawyers themselves.  The real problem is the perception among common folks that their middle-class assets (a home, retirement account, life insurance policy) are easily transferred using an online LegalZoom will, or easily probated with an Office Depot probate document kit.  It may be impossible for these folks to really believe that they will save much more money than they will ever pay by hiring a competent estate planning attorney.  Even “simple” estates can be surprisingly complex.

            Choose Your Attorney Carefully.  In the Housel case, compare attorney Housel with attorney Diane Walsh.  What more need be said?   The contrast is clear: a poor attorney and a competent attorney.

            In my experience, poor attorneys are often not so much incompetent or unintelligent as they are incapable of standing up to clients, insisting on doing quality work, and demanding to be paid for that quality work.  That is, poor attorneys are often embarrassed to look a client in the eye and say, “This is potentially complex work and will require 40 to 50 hours of my time to get started. That will be $12,000 to $15,000, initially.  If you can’t pay that, I am not your guy.”

            I think incompetent attorneys are attorneys who are unwilling to walk away from a cheap-skate client. The cheap-skate client gets the cheap, incompetent attorney, and they both proceed to hate each other.  They each got exactly what they wanted.

            Clearly, Diane Walsh was a straight shooter—a competent attorney.  Was she expensive?  I am certain she was.  But do you want an expensive straight shooter or a cheap document-mill attorney?  You are not going to have your cake and eat it too.

           See our summary of this case in the blog titled “ESTATE ATTORNEY MALPRACTICE–CASE SUMMARY (MURPHY V. HOUSEL).

          See Murphy v. Housel & Housel, 955 P.2d 880 (Wyoming 1988).

By Craig E. Hughes



Seventy Percent of Estate Plans Fail


            Seventy percent (70%) of estate plans fail.  This is the conclusion of an extensive study conducted by Roy Williams and Vic Preisser, and described in their book, Preparing Heirs, Five Steps to a Successful Transition of Family Wealth and Values (San Francisco, Robert D. Reed Publishers, 2003).

            The Williams and Preisser study involved 3,250 estate plans. A failed estate plan was one in which planned asset transfers from benefactors to beneficiaries did not result in the full value of the assets (valued at the date of the benefactors’ deaths) ultimately being transferred to the beneficiaries. The value of all bequests to beneficiaries was less than the value ascribed to all assets at the benefactor’s deaths.  I am assuming their study took into account basic administration costs and economic factors.

            Williams and Preisser argue in their book that the primary reason why estate plans fail is a lack of effective communication between benefactors and their family beneficiaries. In my experience estate plans fail for several other reasons summarized in the introductory video found on this website.

            In my decades of experience in estate planning, Williams and Preisser’s seventy percent failure figure is more than believable.  For numerous reasons, at least 70% of estate plans fail to live up to what they promise to do.  The value of all bequests to beneficiaries is often significantly less than the value of all the benefactor’s assets at the benefactor’s death, after taking into account administrative costs and economic factors. The reasons most estate plans fail in this way include reliance on cheap online documents and document-mill attorneys (poor documents); lack of communication between benefactors and beneficiaries (Williams and Preisser); mistakes and misunderstandings of the law on the part of inexperienced executors; outright fraud; and disputes and litigation.

Craig E. Hughes


Don’t Waste Dollars Saving Pennies


This brief analysis refers to the Utah case Ashworth v. Bullock (2013) referred to in a previous blog titled: “How to Harm Beneficiaries When Transferring Real Estate.” To best appreciate the following analysis, read this previous blog.  (Hover over the title with your cursor and click.)

It is almost always a fatal mistake when a person signs a legal contract without consulting with a good attorney.  Especially in estate planning, a person who avoids a good attorney when selling real estate or transferring other assets invariably ends up harming themselves or the person’s beneficiaries. The costs incurred in avoiding a good attorney far outweigh the emotional and financial costs of finding, retaining, and consulting with a good attorney.

In the Ashworth case, Joseph Bates may have been a person who simply thought that he didn’t need to deal with an attorney when he decided to sell his real estate. Unfortunately, his decision harmed not just his own beneficiaries, but the innocent buyers of the property.

Joseph Bates’s decision to go it on his own resulted in two years of expensive litigation.  Consider also the likely emotional nightmare the Bullocks experience, as they waited during those two years wondering whether they had actually owned the home they thought for 30 years they had purchased; whether they would lose over $80,000 they had paid purchasing the home; whether they would be forced to enter into a rental agreement to live in their home for the remainder of their lives, or whether they would be kicked out.  All the while paying litigators out of their own pocket.

Mr. Bates’s actions also emotionally and financially harmed his own family. Surely his beneficiaries expected a major asset (the real estate) to be part of their inheritance.  But when Mr. Bates died, the beneficiaries were left with a legacy of surprise, uncertainty, frustration, and expensive litigation.

Things turned out right for the Bullocks—the case was decided correctly—but at what cost to everyone! The consequences of Joseph Bates’s decision to avoid paying a good attorney a few hundred dollars: years of emotional pain and untold tens of thousands of dollars in litigation costs.

Do things right.  Find, retain, and consult with a good attorney before transferring your assets.

Ashworth v. Bullock, 304 P.3d 74 (Utah App. 2013)

By Craig E. Hughes


Trustee Fees and the Terrestrial Kingdom of God


            This brief analysis refers to the case Smith v Kirkland (2017).  This case is summarized in a previous blog titled: “TRUSTEES: CHOOSE WISELY–CASE SUMMARY (SMITH V. KIRKLAND).”  To best appreciate the following analysis, read this previous blog.  (Hover over the title with your cursor and click.)

            The Kirkland case is a perfect example of a Trust that was drafted with almost incredible blindness to a host of perfectly foreseeable surprises. While the full ironies in the case are only best appreciated by a person steeped in the culture of fringe Utah religious groups, the straightforward legal issues presented in the case are still a lesson for everyone interested in creating an estate plan that actually works.

            Initially, it should be noted that paying a professional trustee $50 per hour to administer a trust is not unreasonable at all; such a rate is not in left-field; in fact, such a fee is on the lower end of the spectrum.  Professional trustees–especially trustees who are also attorneys or CPAs–charge five to six times this amount in performing the complex accounting, administrative, and legal work of managing a trust.

            Professional trustees who are not attorneys or CPAs may charge $50 to $100 per hour in the end, but when legal or accounting issues arise in administering a trust—and such issues arise constantly—the professional trustee must retain the attorney or CPA at their higher rates to address those issues.

            The point is that professional trustees—and related attorneys and CPAs—are charging an average of five or six times $50 per hour.

            Further, diligent and honest professional trustees are worth every dollar they ask. Professionals can do in one hour what it takes a non-professional family trustee ten hours to do.  Professionals do not make costly mistakes.  Professionals account to beneficiaries.  Professionals minimize and contain conflicts.

            Now, with all this in mind, if Mr. Kirkland still insisted on naming amateur trustees to manage his “Kingdom of God Trust,” he should have at least indicated in his trust a clear hourly rate his trustees would be paid (say $25 per hour, to increase each year by say 3%) instead of using the boilerplate and ambiguous phrase “reasonable compensation.”

            But there are much more serious problems with the Kingdom of God Trust than ambiguous compensation terms.  These problems include poor choice of trustees; failure to appreciate the role of good trustees; poor beneficiary notification provisions; poor accounting requirements; and poor amendment provisions.

            Like all other cases summarized in this blog, the conflict in this case could have been avoided altogether if the documents had been drafted by an obsessive, paranoid, competent attorney. But perhaps Mr. Kirkland was just too smart to retain an attorney. And if he did retain an attorney, where was this attorney mentally when he prepared the “Terrestrial Kingdom of God Trust”?

            By Craig E. Hughes

            Click here to see Smith v Kirkland (2017), 2017 UT App 16.

            Click here to see our summary of this case in the blog titled: “TRUSTEES: CHOOSE WISELY–CASE SUMMARY (SMITH V. KIRKLAND).”


Interview Your Potential Estate Planning Attorney


          I had a client come in two days ago.  He has a special-needs son.  He is a retired military officer and professor at a military academy.  A no-nonsense guy.

          Right off the top, he politely excused himself, said he hoped he would not offend me, but that he had a list of questions for me about special needs trusts (SNTs).

          I was thrilled by the prospect of a potential client who actually had a list of questions for me—who actually wanted to interview me for the job of helping him and his son.  Seriously.  I knew this was a client who was intelligent, someone I could work with.  This was a client who would appreciate the host of surprises that could occur and would do everything necessary to prevent them from occurring.

          His first question had to do with “Crummey” powers in a special needs trust. It was a pleasure to look him in the eyes and immediately explain the case of “Crummey v. Commissioner” and the use of Crummey powers in an SNT.  The questions went on from there.

          I am certain that if this man had not been comfortable with my answers to every question he had, he would have graciously indicated he needed to think about his situation and would have walked out—never to return. Instead he wrote out a retainer check.

          To all of you looking for a good attorney. There is no reason for you to be intimidated in the least by another human being who calls himself an attorney.  You are the one hiring the attorney.  Be prepared to put that potential attorney to the test.  No matter how highly recommended the attorney is, interview him or her with questions.  If an attorney cannot answer your questions in a way you can easily understand, or dismisses your questions in any way, or if you are simply uncomfortable, then politely excuse yourself and do not go back.

By Craig E. Hughes

Ambiguous Deadlines Destroy Estate Plans


          One of the worst probate cases I litigated many years ago centered around the following sloppy provision in a trust: “distribute my assets as soon as possible.” The primary asset was Mom’s home.

          The dictator trustee administering Mom’s trust interpreted the phrase “as soon as possible” to mean at least four years after Mom’s death. The dictator would have delayed even longer than four years if we had not taken over the case three years after Mom’s death and persuaded a court to order his removal and appoint a professional fiduciary.

          Fast forward. Things have not changed. A client met with us just yesterday to ensure that no surprises would disrupt her plans.

          In reading the client’s trust, I came across the following provision: “prior to dividing the trust assets into separate shares, my trustee shall sell in a commercially reasonable manner all real property owned by the trust, and the net sale proceeds shall be included in the assets which are allocated to the separate shares.”

          Like the sloppy provision in that case many years ago, this sloppy provision also had no deadline. There was no deadline imposed on the trustee as to when the properties must be sold. A dictator trustee could take years to sell the properties, supplying a host of excuses: the market is bad, or it would be wiser to rent the properties, or yada yada, blah, blah.

          This provision is sloppy not only because it fails to give deadlines. The provision is sloppy because it does not define what to do if the market is in fact down; it does not address the possibility of renting the properties under various circumstances (again, for example, if the market is down); it does not address whether the properties should be sold as is, or whether the properties should be fixed up and to what extent. And exactly what does the fancy phrase “commercially reasonable” mean?

          Instead, this provision is just sloppy, minimal legaleze meant to impress a gullible client. The provision is another typical mistake by a document-mill estate planning attorney. This attorney was not thinking at all about the host of surprises that could blow this provision apart, create unnecessary conflicts, and put everyone into litigation.

          Be wise. That means cautiously interviewing document-mill attorneys referred to you in pre-paid legal plans. It means being careful about retaining a network attorney advertised on radio by internet will and trust companies. Be wise. Retain an attorney who is carefully paranoid and obsessive about every conceivable surprise that could disrupt your planning.

By Craig E. Hughes