Estate Planning Fundamentals and Client Counseling
The Planning Framework
Estate planning is the process of arranging a client's affairs to achieve objectives that fall into four broad buckets: transferring property to intended beneficiaries, minimizing transfer and income taxes, providing for incapacity, and avoiding unnecessary probate or administrative cost. A candidate must know the core documents and their functions: a will (dispositive, probate), a revocable living trust (non-probate dispositive vehicle plus incapacity management), durable powers of attorney for finances and for health care, an advance health care directive, and beneficiary designations on life insurance and retirement accounts.
Client Counseling Competencies
Questions in this domain test process, not just doctrine. Expect items on the initial interview (gathering family data, asset inventory, titling, existing documents), identifying the client and conflicts (joint representation of spouses, capacity, undue influence red flags), and scope/engagement issues. California-specific traps include the difference between a client's testamentary capacity and contractual capacity, and the fact that the attorney's duty generally runs to the client, not to disappointed beneficiaries (though Lucas v. Hamm and Osborne v. Bank of America create narrow exceptions).
Common Traps
- Confusing a revocable trust with a tax-saving device: it does not avoid federal estate tax for the grantor.
- Assuming a will controls all assets; jointly held property, POD/TOD accounts, and beneficiary designations pass outside it.
- Missing the incapacity planning gap: a will does nothing while the client is alive.
Rule of Thumb
Always ask: Who owns the asset, and how is title held? Titling usually determines the outcome before any document is read. For example, if a client owns a brokerage account TOD to one child but her will leaves everything equally to three children, the TOD designation controls and the account bypasses probate entirely.