LOOK BEFORE YOU LEAP! Planning at The Cliff Of The Client’s Capacity Marve Ann M. Alaimo / Cummings & Lockwood LLC William T. Hennessey / Gunster

The Doe Family once upon a time …

Overview  Understanding client capacity  Recognizing and dealing with the potential for undue influence  Identification of the client

Sound Mind What is it? The ability to understand the nature and extent of one’s property The ability to understand the nature and extent of one’s property Knowledge of one’s natural beneficiaries Knowledge of one’s natural beneficiaries A general understanding of the practical effect of a will or trust A general understanding of the practical effect of a will or trust

Know Your Client Set the environment Be alert Check the time Be casual Simplify Be creative Be visual

Ethical Concerns To Prepare or not to prepare? ACTEC Commentary to MRPC 1.14 lack of capacity vs. borderline capacity San Diego County Ethics Opinion once raised, an issue of capacity must be resolved Florida Bar v. Betts and Vignes v. Weiskopf coercion v. diligence

Ethical Concers The take away … Facilitate client wishes as best as possible, but don’t interpose your own Facilitate client wishes as best as possible, but don’t interpose your own Be honest Be honest Provide facts and a clear record Provide facts and a clear record Let the Court make the decision Let the Court make the decision

Confirm Intentions  Get written instructions if you can  Follow up with meeting summaries  Document significant detours in planning  Simplify for understanding  Be visual & straightforward

To do … Take notes and prepare memoranda Take notes and prepare memoranda Focus on the test for capacity Focus on the test for capacity Include witnesses Include witnesses - Who? - When? - How?

Or Not To Do … Audio or video recordings? Medical records or physician reports? Independent evaluations? Letter of intentions?

Undue Influence “When the influence exerted upon a testator or grantor rises to the level of over persuasion, duress, force or coercion and destroys the free agency and will power of the testator or grantor, undue influence exists”

Undue Influence? A will or trust is presumed to be the product of undue influence if the alleged undue influencer:  is a substantial beneficiary under the will or trust  occupied a confidential relationship to the testator or grantor, and  was active in procuring the will or trust

What do you do when … The client’s appointment is made by a potential beneficiary The client’s appointment is made by a potential beneficiary A potential beneficiary wants to talk with you about a client’s estate plan A potential beneficiary wants to talk with you about a client’s estate plan A potential beneficiary wants to be a part of the client meetings A potential beneficiary wants to be a part of the client meetings

Ask Yourself …  Will this person benefit substantially from the plan my client wants to create?  Does this person have a special relationship with my client in which my client is dependent upon this person or must place a lot of trust in that person?  Is this person taking an active role in procuring this change to my client’s estate plan?

Active Procurement Active Procurement Presence of the beneficiary at the execution Presence of the beneficiary at the execution Presence of the beneficiary at client meetings Presence of the beneficiary at client meetings Referral of the client to you by the beneficiary Referral of the client to you by the beneficiary The beneficiary’s knowledge of the proposed plan before it is executed The beneficiary’s knowledge of the proposed plan before it is executed Instructions given by the beneficiary to the attorney Instructions given by the beneficiary to the attorney Securing of witnesses by the beneficiary Securing of witnesses by the beneficiary Safekeeping of the documents by the beneficiary Safekeeping of the documents by the beneficiary

Say NO to Active Procurement! Schedule and confirm meetings with the client Schedule and confirm meetings with the client Keep potential beneficiaries out and explain why Keep potential beneficiaries out and explain why Document the third parties that do participate Document the third parties that do participate Reaffirm confidentiality, freedom of choice and their right to advocacy Reaffirm confidentiality, freedom of choice and their right to advocacy Receive and confirm all directions from and with the client Receive and confirm all directions from and with the client Document everything with memos and notes Document everything with memos and notes Be honest with your client Be honest with your client

Ethical Issues  What duty to you have to scrub the undue influence?  What if you still feel your client is being unduly influenced?

Best Practices  Communicate directly with the client  Get written instructions in client’s hand  Follow up with meeting summaries  Document significant detours in planning  Reaffirm, reaffirm, reaffirm!