Protect Your Estate Planning Documents and Your Estate Plan
Do Not Write on Your Documents
Be Careful What You Put in Writing to Your Children and Other Beneficiaries
Try Not to Provide Original Documents to Third Parties
Know Where Your Original Documents Are Located
We caution our clients on what they should and should not do with their original estate planning documents, both when we sign the documents and when we give them to our clients for safekeeping. First, we tell them that they should never be written on after they have been executed.
Writing on a document can be evidence of tampering. Also, writing on them may or may not change the terms of the document. In some cases, striking though language (called “strike-throughs”) can serve to amend or revoke a document, but the rules are quite complex and vary from state to state. For instance, the rules in South Carolina are quite different from those in Florida. Similar considerations apply to adding language to trust agreements; the rules vary from state to state.
It should also be kept in mind that your Will is a testamentary document and will be in front of a probate court judge one day. If the Will has writing and/or “strike-throughs” on it, it may be expensive to interpret and it may even be held invalid. This is not the result that most people want.
Why do most people write on estate planning documents, such as Wills and Trust Agreements? Sometimes, they are simply making notes, not thinking about the consequences. At other times, there may be an emergency and they want to make sure that it is covered, not realizing that they may make the situation much worse.
However, after over 30 years of practice, I have found in those cases, which I have been able to discuss with my clients, that the main reason is that they were trying to save costs and avoid going to an attorney. While saving costs is understandable, this can prove to be much more expensive to correct later, if it can be corrected at all, than going to an attorney now.
Similar considerations apply to those who draft their own Trust, Trust Amendment, Will and/or Codicil. The real test comes after you are dead or permanently incapacitated and you are no longer able to explain what you meant to do.
In addition to writing on a document, you should be careful about letters to children and other beneficiaries. There have been cases where simple letters from a parent to a child explaining what is to happen after the parent dies, inadvertently served to amend the parent’s Trust Agreement. There is one Illinois case where a letter, which was signed “Love Mom,” inadvertently amended the mother’s Trust Agreement.
In some cases, parents do not want to tell their children and other beneficiaries the truth about their testamentary desires. In letters or other communications to their children, parents need to be candid concerning what is going to happen after their death, or not discuss it at all.
At other times, a positive spin is used by the parent, in writing, that can be misinterpreted by the child and can cause problems after the parent is deceased. In other instances, the parent is just wrong about what the Will or Trust Agreement actually states.
This can create expensive postmortem problems, when a child produces a letter signed by mom or dad after the Trust Agreement is signed, if it expresses terms that are different from the Trust Agreement. Similar considerations apply to Wills, but the legal requirements for signing a Codicil to a Will are much stricter than for an Amendment to a Trust Agreement and, therefore, much more difficult to inadvertently amend.
I have noted in a number of cases over the years, that when these situations occur, most lawyers who work in this area of the law, and who did not draft the document in question, could and would take either side of the argument. Unfortunately, this is not what the decedent wanted. The decedent wanted clarity.
When a lawyer is willing to take either side of the argument, this usually means that the facts are such that representing either side will produce significant revenue for the law firm. In many cases, the lawyer also knows that based upon the facts, a cash settlement without litigation is a high likelihood. Obviously, it is best to avoid these problems by not contradicting your documents.
You should also never turn your original estate planning documents over to a third party, without a very good reason, such as the Will of a decedent being turned over to your lawyer or to a probate court; or Durable General Power of Attorney being turned over to the clerk of court. Most of the time, a copy will suffice.
We have had numerous occasions where people have turned over documents to third parties, who promptly pulled apart the staples, made copies, and then put the document back together with pages missing and/or out of order. We even had one case where a health care provider took possession of a Health Care Power of Attorney and a Durable General Power of Attorney, then took them apart and put pages from the Health Care Power of Attorney in the Durable General Power of Attorney, and vice versa, and stapled them together. Also, some pages were simply missing. Fortunately, our client noticed something was wrong and we still had “Word” copies of the originals, and we were able to reprint and sign the documents, which solved the problem.
We have also found that many banks and stock brokers ask for complete copies of Trust Agreements, when opening a trust account for an individual Trustee. In many cases, the Trustee is also the Settlor or creator of the Trust.
If a bank or stock broker insists on having a complete copy of the document, this is their internal policy and not a legal requirement, as many of them may suggest or claim. This request for a complete copy may be unnecessary intrusion on your privacy.
The South Carolina Trust Code, which is a version of the Uniform Trust Code, allows third parties to accept and rely upon a Certificate of Trust. One of the purposes of this provision is to prevent brokers and bankers from asking for a complete copy of the document.
If they require additional proof, they should only ask for copies of the front page and the signature pages of the Trust Agreement. In some cases, they may also ask for the “powers clauses” of the Trust Agreement, to verify that the Trustee has the power to deal with them. Under our statute, if they ask in “bad faith” for a complete copy of the Trust Agreement, they can be held liable for any damages caused.
You should also store your original documents in a safe place. In most cases, your Personal Representative, Trustee, or Agent under a Health Care Power of Attorney or financial Power of Attorney, should know where your originals can be located.
The main points to remember are: (1) never write on an original estate planning document after it is signed; (2) never pull an original document apart to make copies or for any other reason; (3) be extremely careful in providing complete copies to banks and brokers; (4) always know where your original documents are located; and (5) contact your lawyer immediately, if you discover that you do not know where your original documents are located.
Following these simple procedures can avoid significant expenses and problems for you and your family.here.