Its only natural for a married couple to want to plan their estate together; in marriage, assets tend to be shared and the couple has a legal obligation to support one another and their children. However, when it comes to subsequent marriages – a situation where one or both spouses have been previously married and divorced – there is a potential for malpractice for an unwary estate planning attorney…especially when there are step children involved. And this is even more true when there is a family business.
There are numerous things that should be considered, and although not exhaustive, the following provides a basic start:
Look for an attorney who seeks to determine which of the spouses, or both, will be the attorney’s client BEFORE DISCUSSING ANYTHING ELSE. Attorneys representing both spouses should document every meeting in detail. Attorneys representing both spouses should ensure that both spouses understand that what one spouse tells the attorney, the attorney MUST share with the other spouse; privilege applies to both clients, and in situations of dual representation, there are no secrets as between the attorney and the client.
When both spouses want to be represented by the same attorney, that attorney should explain the potential pitfalls of dual representation in a worst-case scenario. For example, has there ever been any suspicion of infidelity by one or both spouses? Do the spouses have a pre-or-post nuptial agreement and is one needed? What happens when the first spouse passes away and the surviving spouse remarries? Will the attorney be able to continue representing the surviving spouse, even if that means changing the estate plan to provide for the new spouse? How will this affect the children’s ability to inherit? Will the attorney be committing malpractice by undoing the estate plan of a former client (the deceased spouse) and changing that estate plan to something that may be adverse to the deceased client’s estate plan…especially if the surviving spouse passes away before the new spouse?
If the couple does think they need a post nuptial agreement, then the attorney should reject dual representation, decide which spouse the attorney will represent, and inform the other spouse to get independent counsel.
If the family has a business, serious consideration should be given to a succession plan that would protect the business from any number of the possibilities listed above. A business planning attorney and an estate planning attorney could coordinate their efforts to ensure the plan not only meets estate planning objectives, but tax planning and business objectives as well.
Every family is different, and not every family will need to consider a worst-case scenario when walking into an estate planning attorney’s office. However, from the perspective of a litigator, an estate plan that fails to anticipate a worst-case scenario is normally one where the worst occurs and family members in the height of their grief are left to deal with complex situations that the decedent never would have intended…if only she had been advised of the possibility.