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  2. 2. Table of Contents This Handbook describes procedures specific to the University of Arkansas School of Law Wills Project. For procedures and practices not covered by this Handbook, the student attorney should consult the Clinic Practice Guide. In particular, every student involved with the Wills Project should review the general information in the section of the Clinic Practice Guide that covers Arkansas Supreme Court Rule XV (Student Practice), ethics and professional relationships, and the general operation of the clinic. I. Wills Project Description II. Client Intake Procedures III. The Estate Plan IV. The Signing Ceremony V. Overview of Will Form (with drafting comments) VI. Sample Estate Plan Memorandum VII. Wills Project Forms and Related Resources Appendix—Bibliography of Estate Planning Resources Note: Throughout this handbook the pronoun “you” refers to the student attorney representing a client participating in the Wills Project. 2
  3. 3. I. Wills Project Description The University of Arkansas School of Law Wills Project began during the 2005-2006 school year. Members of the student organization, Equal Justice Works, developed the idea for this pro bono activity, in which student attorneys and faculty supervisors volunteer their time to provide basic estate planning services for clients referred by Habitat for Humanity of Washington County (“Habitat”). Working with a faculty member who serves as the supervising lawyer, student attorneys counsel clients in estate planning matters. Among other things, they review the manner in which the client holds title to the home and other assets, and they prepare simple wills, advance health care directives (living wills), powers of attorney, and appropriate will substitutes. The Project affords student attorneys the opportunity for pro bono service in a context that mirrors an estate planning practice for clients of modest means. The student attorneys work under the auspices of the University Of Arkansas School Of Law Legal Clinic, and they use the Clinic facilities and in general follow Clinic procedures. Students need not, however, be enrolled in the Legal Clinic to participate. No academic credit is awarded for participating. Legal Clinic Faculty and volunteer Faculty supervise and review the student attorneys’ work and provide personal feedback to the individual student attorneys. Prerequisites: To serve as a student attorney for the Project, you must qualify for student practice under Arkansas Supreme Court Rule XV, Rules Governing Admission to the Bar. At a minimum, you must have completed the first year curriculum and Professional Responsibility and must have the approval of the faculty supervisor for the Project. Usually, students should also either have taken Decedents’ Estates or be currently enrolled in that course. The anticipated level of demand for the services of the project determines the number of students who may participate at any time. 3
  4. 4. II. Client Intake Procedures Financial Eligibility. The Wills Project provides estate planning services only to clients who cannot afford to pay for legal services. Although clients initially referred to the Project from Habitat will have already met the Habitat financial eligibility test, each prospective client must also complete the Wills Project Eligibility and Estate Planning Questionnaire to confirm eligibility at the time the client applies for estate planning services. Project Representation Guidelines The Wills Project currently will only accept clients referred by Habitat who meet the Wills Project’s financial eligibility standards and whose estate planning needs are consistent with the scope of services the Project offers. Clients must be domiciled in Arkansas. In general, a prospective client referred to the Project by Habitat, who meets the financial eligibility standards, and who owns a home conveyed directly by Habitat should be accepted unless it appears that the prospective client needs estate planning services beyond those provided by the Project. Acceptance of a client requires the written approval of the supervising lawyer. In general, the Project offers only the following services, although additional, related services may be provided with the advance approval of the supervising lawyer: review and advice concerning the manner in which the client’s assets are titled; preparation of deeds, payable-on-death and transfer-on death-designations, and other documents to modify how assets are held (home, bank accounts, cars and other titled property, and financial assets); review and estate planning advice concerning any life insurance policies and retirement and pension plans; preparation of simple wills, advance health care directives (living wills), durable powers of attorney, and durable powers of attorney for health care purposes. Although a simple will may include provisions to establish a testamentary trust for the benefit of minors, this handbook presumes that clients of the Project will not normally wish to establish an inter vivos trusts. If it appears that the client’s situation may justify a supplemental needs trust for the benefit of a disabled family member, the student attorney should consult with the supervising lawyer for additional guidance. Initial Interview. Periodically, we schedule a session with prospective clients at Habitat’s offices so that we can cover eligibility and other preliminary matters in a group session, but not all prospective clients will have attended a meeting of this nature prior to your initial interview with the client. The description of the initial interview that follows here presumes that the client has not been pre-qualified or screened in a group session. If the client has been pre-qualified, then some of the steps described here will have already been completed before you meet the client for the first time. Once a prospective client has established financial eligibility, you should prepare 4
  5. 5. an engagement agreement and schedule an initial interview to determine whether the Project should accept the prospective client. The Clinic conflict of interest procedure applies to the Wills Project. Note that for client contacts, Arkansas Supreme Court Rule XV requires either that the supervising lawyer participate or that you videotape the client contact. The Wills Project procedure requires that, unless otherwise approved in advance by the supervising lawyer, both the student attorney and the supervising lawyer must be present during the interview and at any other time the student attorney provides counseling or other substantive legal services. Keep in mind that once you receive any confidential information from the client or provide any legal advice, you have probably established an attorney-client relationship. You must resist the temptation to provide advice (including answering questions about legal matters) until the supervising lawyer approves acceptance of the prospective client under the Project guidelines and you, the client, and the supervising lawyer have signed the engagement agreement. Until that time, you should only gather information necessary to qualify the client and to explain the services the Project is able to offer to clients if they are accepted. At the beginning of the interview, explain to the prospective client that you will be asking questions and collecting information during the interview to determine whether the Project can accept the representation. Also explain that if the client meets the Project’s guidelines, the nature and scope of the services to be provided will be described in a written agreement, and that neither you nor anyone else involved with the Project can provide any legal services except in accordance with a letter signed by you, the supervising lawyer, and the client. During the initial interview, you should use the Project’s Eligibility and Estate Planning Questionnaire to determine who the client or clients would be and to catalogue the prospective client’s assets and liability and to identify other facts and circumstances relevant to the estate planning services. If the representation will be on behalf of more than one client (for example, a husband and wife), explain that ethical rules require that you must be free to share all information and advice with each client and that you will be unable to accept the representation or continue with it if it appears that any conflict of interest exists between the clients involved. For convenience, this handbook generally is written as if each representation involves one client only. If the information gathered during the interview satisfies the supervising lawyer that the prospective client meets the Project’s guidelines and that no reasons appear that call into question the appropriateness of accepting the engagement, the supervising lawyer will accept the representation, and you will ask the client to sign the engagement agreement in duplicate. The student attorney, the supervising lawyer, and the client all must sign the agreement. You should give one copy of it to the client. 5
  6. 6. Engagement Agreement Once the supervising lawyer has approved acceptance of the client, you should review with the client the engagement agreement that you prepared prior to the interview. Note that the Project’s form of engagement agreement includes a variation to use if there are multiple clients. Normally, joint representation will involve a married couple, but there may be other circumstances in which the Project may accept joint clients for estate planning services. If the client appears to understand the nature and scope of the proposed representation and approves the terms of the agreement, you, the supervising lawyer, and the client should sign the agreement. If the prospective client wants more time to go over the engagement agreement (for example, an elderly person may want to have someone else review the letter), do not sign the letter, but give a copy of it to the prospective client and establish a date by which the client must contact you if he or she wants to proceed. If you need additional information from the prospective client before accepting the representation, or if you or the prospective client need additional time before proceeding with the representation (including the situation in which the client wants additional time to review the engagement agreement), you should provide a written explanation describing what is necessary to proceed, and you should tell the prospective client when to expect a decision, or you should agree on a deadline by which the prospective client should contact you. Normally, you should do this by letter. In most circumstances, you should be able to provide the decision within 10 days. You should explain to the prospective client that legal services will not be provided unless and until a decision is made that the proposed representation is within the Project’s guidelines and an appropriate engagement agreement has been signed. 6
  7. 7. III. The Estate Plan Once you have accepted the engagement and you have gathered enough additional information to determine the client’s estate planning objectives, you should prepare a brief memorandum to the supervising lawyer that outlines the estate plan you recommend for the client, and you should prepare the initial draft of the documents the plan requires. You may need to meet with the client more than once to gather the information necessary to prepare the memorandum and to draft the documents. Your memorandum should consider all of the relevant circumstances, including the client’s assets and liabilities, family situation, and objectives. Your memorandum should reflect at least the following considerations: Avoiding or Simplifying Probate. The clients we represent have limited financial assets. Most of the clients should have a modest or substantial equity in the home (that is, the fair market value of the home should be greater than the balance of the mortgage debt). Beyond that, most of the clients will own personal property that has a relatively small net value after adjusting for debts and depreciation, and they may have modest bank account balances, life insurance, and pension benefits. Under these circumstances, the costs and time involved in probating a will, or even in distribution without administration under the small estate procedures, may be significant enough to discourage surviving family members from taking action under the Probate Code. Consider the extent to which the client’s estate planning objectives can be satisfied through the use of will substitutes, such as: tenancy by the entirety or joint tenancy with right of survivorship; a beneficiary deed that names a transfer-on-death beneficiary of real property in accordance with Ark. Code Ann. ' 18-12-608 (this is a relatively new device for Arkansas established by the Legislature in 2005); payable-on- death bank accounts and savings bonds; and transfer-on-death securities accounts (although our clients will rarely own securities, some may have mutual fund accounts or may participate in an employer stock plan). The use of will substitutes may successfully avoid the need for probate for some of our clients. When we represent a married couple, this will often be true for the estate of the first spouse to die. But it will be more difficult to avoid probate if you are planning an estate in which one or more of the surviving beneficiaries may be minor children, as will often be the case. If proceedings under the Probate Code are likely, consider whether and how the estate plan can simplify the process when the time comes by facilitating the prospects for taking advantage of the small estates option for distribution without administration (Ark. Code Ann. '' 28-41-101 through -41-104). While estate planning attorneys frequently prepare revocable inter vivos trusts (trusts that become effective immediately rather than at the client’s death) to avoid probate, the Wills Project is not currently recommending this course of action to our clients. While we are open to this approach in an appropriate situation, we have concluded that using inter vivos trusts has several disadvantages for our clients. First, the client would need to be aware of and attend to additional administrative considerations that could make it difficult to assure that the trust continues to serve its purposes over time. For example, the client would need to make certain to title assets in the trustee or to transfer them to the trust. While private clients can afford to consult
  8. 8. with their attorneys periodically about trust administration details, the Wills Project procedures require that we terminate the attorney-client relationship once the client has signed the initial documents. We cannot commit the Wills Project or the Clinic to provide ongoing services to clients. Secondly, most of our clients have young children who will be their primary beneficiaries. Especially in situations in which a client is survived by minor beneficiaries, we believe that we secure some additional level of protection for the client and the beneficiaries by using testamentary trusts rather than inter vivos trusts because the initial disbursement to the trustee under a testamentary trust will be made under a court order and the court will have continuing jurisdiction over the trustee. While probate administration is often a disadvantage for clients, we prefer some level of court involvement for purposes of the initial distribution to the trustee. Family and Health Circumstances. One of the most important planning decisions that a parent makes is to nominate a guardian (and a successor guardian) for minor children. You should also consider any relevant circumstances involving any other persons who are part of the client’s household or for whom the client has responsibility. You should have determined during the interview(s) whether the client wants to sign an advance health care directive or any powers of attorney. You should advise clients about the advantages and disadvantages of these planning tools, although the client must ultimately make the decision. Recognize that a client who does not have a trusted and capable spouse or close relative may be understandably reluctant to authorize anyone else to act as an attorney in fact or proxy for decisions involving property and health care. Will. While the primary plan for a client may be based at least in part on will substitutes, every plan should include a simple will to cover miscellaneous assets and to serve as a backup if, for example, the client acquires new assets, or a beneficiary of a non-probate transfer predeceases the client, or some other change in circumstances leaves the client with probate assets. A will is also important as a vehicle for a parent to name a guardian for minor children and to establish appropriate asset management for minor beneficiaries (usually through a testamentary trust). Your memorandum should discuss how the Project will form should be modified for the client. What optional provisions should be included, and are there any special circumstances that require substantial deviations from the will provisions that are pre-approved for the Project? With respect to these matters and related issues, review Part V of this handbook (Overview of Will Form). Draft Documents. Unless you determine that the representation requires significant consultation with the supervising lawyer, you should attach to your memorandum complete drafts of the documents you propose. Your drafts should conform to the Project forms, and you should explain in your memorandum any significant deviations. For these purposes, “draft” normally means your proposed final form for execution by the client and not a rough or working draft.
  9. 9. IV. The Signing Ceremony You should schedule the signing ceremony with the client and the supervising lawyer approximately two weeks in advance. Be certain to reserve a clinic conference room and confirm that a notary public and two witnesses will be available at that time. Confirm the date and time for the signing by a letter to the client. Although the supervising lawyer will be present for the signing, you will conduct the ceremony. Before the ceremony begins, review the Will Execution Procedure, which is included at the end of this section, as well as the Project’s form of Estate Planning Checklist. You must complete the checklist during the ceremony, sign it, and include it in the client’s file. Remember that if a will or other estate planning document that you prepare is ever challenged, you and the witnesses may be unavailable and memories may be weak. The approved Project procedures provide the best defense of the documents and your work. Even if you or a witness cannot recall the details, everyone involved with the Project will remember that the standard operating procedure was to follow a strict ritual that insured compliance with the formalities required for a valid will. Although your Decedents’ Estates casebook was filled with will contest cases, very few attested wills executed in accordance with careful procedures will ever be challenged, and of those that are challenged, even a smaller number will be denied probate. There is no reason to create a risk that a document you prepare may become one of the rare exceptions. Prepare an end-of-engagement letter in advance of the signing. In many situations, at the end of the will signing ceremony, you should be able to give a copy of the letter to the client, along with the original documents except for any documents for which you have further responsibility, such as deeds or bank account signature cards. (Please note that the Clinic does not have the capacity or procedures in place to retain the original documents on behalf of clients.) If it is not feasible to give a copy of the end-of- engagement letter to the client at that time because you still have significant responsibilities to complete, then you should send the letter to the client as soon as possible after the client has signed the will and other documents. Before the client leaves after signing the documents, you should go over with the client the important matters covered (or that will be covered) by the end-of-engagement letter, such as the advice to keep the original documents in a safe place, never to mark on the original documents, and to be aware of future occurrences and changes in circumstances that may suggest the need for a review or modification of the estate plan. Also explain to the client that the representation has come to an end and that neither you nor the Project will be able to provide additional services unless the client submits a new application for services and is accepted again as a client. If you will be recording any deeds or processing any documents, describe to the client what you will be doing and explain that when you have completed those steps the representation will end. You must immediately record any deeds and take all other steps required to conclude the representation. You must keep track of the status of these steps, which may include obtaining recorded deeds from the recorder’s office and securing confirmations that any other transfer or title documents and beneficiary designations have been
  10. 10. properly processed. Estate planning services account for a disproportionate number of professional responsibility complaints, and many of these complaints arise because lawyers fail to wrap up loose ends after the documents are prepared or signed. You should assemble and return to the client any recorded deeds or other documents promptly after you have all of them. Your transmittal letter to the client should list the documents enclosed, provide any appropriate information, and state that the representation has come to an end.
  11. 11. WILL EXECUTION PROCEDURE1 Follow these procedures when supervising the will signing: (1) The pages of the will must be fastened together securely and each page of the will must be numbered. (2) The student attorney must confirm that the client has read the will and understands its contents. (3) After the student attorney has answered any questions the client has and has determined that execution may begin, the student attorney, the supervising attorney, the testator, two disinterested witnesses, and a notary public are brought together in a room from which everyone else is excluded. The door to the room is closed. No one enters or leaves the room until the ceremony is finished. The student attorney should introduce everyone in the room and should ask for everyone’s undivided attention until the ceremony has been completed. This should include asking everyone to turn off cell phones or other devices that might produce an interruption. (4) The student attorney asks the testator the following three questions in a voice loud enough for everyone in the room to hear: (a) “Is this your will?” (b) “Have you read it and do you understand it?” (c) “Does it dispose of your property in accordance with your wishes?” After each question the client should answer “yes” in a voice that can be heard by the witnesses and the notary. (It is neither necessary nor customary for the witnesses to know the terms of the will. If, however, the student attorney foresees a possible will contest, the student attorney should discuss with the supervising attorney added precautions that might be taken.) (5) The student attorney asks the client the following question. “Do you request _______________ and _________ (the witnesses) to witness the signing of your will?” The client should answer “yes” in a voice audible to the witnesses. 1 This is based on the procedure recommended in Jesse Dukeminier et al., Wills, Trusts, and Estates 216 (2005), which in turn is derived from that originally recommended by Professor W. Barton Leach in Cases on Wills 44 (2d ed. 1949), as revised by Professor A. James Casner in 1 Estate Planning § 3.1.1 (6th ed.. 2004 with Jeffrey N. Pennell).
  12. 12. (6) The witnesses should be standing or sitting so they can see the client sign, and the student attorney should direct the attention of the witnesses to the client. The client should sign on the margin of each page of the will. The client then signs his or her name at the end of the will exactly as the client’s name appears at the beginning of the will. (7) At the student attorney’s request, one of the witnesses reads aloud the attestation clause, which attests that the procedure described above was followed. (8) Each witness then signs and writes his or her address next to the signature. (9) A self-proving affidavit, typed at the end of the will, swearing before a notary public that the will has been duly executed, is then signed before the notary public, who in turns signs and attaches the required seal. (10) If the client is to sign documents in addition to the will, the student attorney should review any procedures relating to those documents (such as execution before a notary public) with the supervising attorney in advance. At the appropriate time, the student attorney may wish to explain that the signing ceremony is complete, thank the witnesses and dismiss them. After the ceremony the student attorney should make photocopies of the original executed will (and the other documents) and should review the will to confirm that all the signatures are in the correct places and that each page is signed in the margin. If an error was made, it is easier to correct promptly by redoing the execution ceremony than by litigation after death. The student attorney should then write a short memo to the file noting that the Will Project’s usual execution practices were followed and noting any problems. If the student attorney has any post-signing responsibilities (such as recording a deed) the student attorney should immediately complete those responsibilities and document that fact in the file. The student attorney should promptly send to the client an end-of-engagement letter that encloses the original will, together with all other original estate planning documents prepared for the client and any documents obtained from the client during the representation. The Clinic and the Wills Project do not retain original estate planning documents for clients.
  13. 13. V. Overview of Will Form (with drafting comments) The Project’s will form is a simple one that is intended to minimize legalese without compromising clarity, completeness, and precision. Because the Wills Project values uniformity and consistency, changes to the form that are structural (i.e., not specific to the client’s situation) require the approval of the Project’s supervising attorney. But because all forms are always under construction, student attorneys should suggest improvements and corrections whenever they seem appropriate. No form can contemplate all possibilities and circumstances. For that reason, as the Wills Project progresses, we will continue to develop supplements and alternative provisions to preserve variations and modifications that may be useful to consider in a variety of circumstances. As you work with the will form, keep these specific comments in mind: 1.For the sake of consistency and the ease of review by the supervising attorney and Will Project attorneys who may be called upon to review clients’ wills in the future, preserve the Article numbering and order of the form whenever feasible. 2.Provisions enclosed in brackets [ ] in the form call for the student attorney to select the appropriate alternative or to determine whether the bracketed provisions are relevant or appropriate to the situation. A will should not be executed with alternative language retained in brackets. 3.Article One (Identifications and Definitions): The provisions of subsections A and B must be edited to reflect the client’s situation. Subsection C establishes a general rule that beneficiaries must survive by at least 45 days. This reflects the assumption that this period probably conforms to the average client’s desire not to leave property to someone who does not live long enough to benefit from it. The 45-day period is short enough that it will not prolong probate. Many of our clients’ estates should qualify for distribution without administration under Chapter 41 of Title 28, which permits the small estates affidavit to be filed as early as 45 days after the death. (For tax planning purposes, many estate planners use a separate survival rule concerning spouses, but our will does not include that option because the Wills Project does not serve clients who need tax planning). 4.Article Two (Personal Representative): We prefer naming at least one alternative personal representative. 5.Article Three (Payment and Expenses): The introductory phrase contemplates the possibility that a more specific provision of the will may state contrary directions concerning specific debts. When that is the case (rare for our clients), however, it may be best to edit Article Three to avoid apparent conflicts rather than simply to rely on the introductory phrase. 6.Article Four (Distribution of Property): These provisions are the heart of the form. If the client does not wish to leave all property to the same beneficiary or beneficiaries, then divide Article Four into separate paragraphs for different categories of devises. For example, there may be separate paragraphs captioned
  14. 14. “Monetary Gifts,” “Items of Personal Property,” and “Residue of Estate.” Some clients may wish to take advantage of the option under Ark. Code Ann. ' 28-25-107(b) to leave a separate list to dispose of items of tangible personal property. This is acceptable and may be accomplished by including a separate paragraph in Article Four to refer to the list. But students should exercise discretion in deciding whether to suggest this option to the client unless it seems especially indicated by the client’s questions or expressed desires. Some clients (especially clients who will not have continuing access to legal advice) might easily be confused by the process of using such a list or by the statutory provisions concerning the kinds of property that can be disposed of in that manner. Article Four also provides for “per stirpes” shares to descendants in accordance with the statutory definition of that term that applies in the case of intestate succession. Student attorneys should use discretion in deciding whether it will be useful to explain this technical concept in any detail. For example, if a child of the client has already died and left children, it may be appropriate to explore the issue, but it may be inappropriate to do so if the client’s current family circumstances make the question remote and irrelevant. If a designated beneficiary is someone other than a child of the testator, you should discuss with the client how the property should pass if the beneficiary does not survive the client. 7.Alternative Article Four (including testamentary trust): In appropriate cases, you should use Article Four to establish a testamentary trust or to take advantage of the Uniform Transfers to Minors Act or the Arkansas Custodial Trust Act. The most common situation we face involves a client who is a single parent of one or more minor children who will be the primary beneficiary or beneficiaries. The bracketed provisions of the form that establish a testamentary trust merely provide a sample based on one possible client situation. The circumstances of clients for whom a testamentary trust may be appropriate will vary greatly. Each situation will require careful consideration. Among other things, you should consider these issues relevant to a testamentary trust for our clients: (1) Is an appropriate person available to serve as trustee? The role of trustee involves a degree of attention and diligence requiring a mature, careful, and trustworthy person. (2) Will someone be willing to serve as trustee for no compensation? The value of the trust property will almost always be insufficient to justify the fees of an institutional trustee. Additionally, under the Arkansas Trust Code, the trustee is entitled to reasonable compensation. If the designated trustee is unlikely to be willing to serve without compensation, use of a trust may be impractical. (3) Is it financially feasible to leave the house in trust? Unless the beneficiary will have sufficient income (from other trust assets, social security or pension survivor benefits, or otherwise) to pay the Habitat mortgage and to pay taxes and maintenance costs of the house, use of a trust to provide a residence for the beneficiary may be impractical. Some clients may have sufficient life insurance to provide a source to pay these costs. If that is the case, be certain that the client properly designates the primary insurance beneficiary as “the trustee of the trust established under my last will” and names the contingent beneficiary as “my estate.” While attorneys in a normal estate planning practice will often avoid this approach for tax and other reasons, for our clients this is often the best way to assure that life insurance proceeds will be held for the benefit of minor children and used, if possible, to keep up the Habitat mortgage payments. Most clients who have life insurance will have already designated the children or another relative as the beneficiary, and you will need to ask the client to bring to you a change of
  15. 15. beneficiary form from the insurance company. Some clients who do not have life insurance may be able to discuss with the designated trustee the possibility of paying the mortgage payments and related housing expenses in exchange for permission (which would need to be provided for under the terms of the trust) to live in the house with the beneficiary. Other clients may want to explore other strategies for preserving the equity in the house for their beneficiaries, such as leasing the house to others. 8.Article Five (Guardianship): Explain to the client that the guardian need not be the same person as the personal representative (or any trustee). Also, if the client is divorced, the ex-spouse may have parental rights that will take precedence over the client’s guardianship designation. You may need to explore and discuss this issue with the client. 9.Article Six (Powers and Duties): This provision merely incorporates a statutory list of powers. 10.Article Seven (Choice of Law): As a matter of formatting, this provision (which has little substantive value) should normally be at the top of the signature page so that the testator’s signature and the attestation clauses with the witnesses’ signatures all appear on a single page. In many instances this formatting may be possible without need to include the explanatory statement that the bottom of the previous page was intentionally left blank. 11.Signature lines: Where the main signature line states “Name” enter the client’s name. 12.Witnesses: Either add the names of the witnesses below their signature lines in advance or ask the witnesses to print their names below their signatures. 13.Affidavit of Attesting Witnesses (self-proving affidavit): In some cases it may be necessary to delete some of the factual statements. For example, some clients may have difficulty with English or may suffer from a seeing, hearing, or speech defect. In those cases, delete the untrue statement(s), but write a memorandum to the file explaining how you handled the special circumstance (for example, you may have arranged for the will to be read to the client in the client’s native language by a reliable interpreter).
  16. 16. VI. Sample Estate Plan Memorandum To: Professor ________________ From: Date: RE: Memo explaining ____________’s estate documents Ms. _____’s main concern was to leave all her property to her children without her ex-husband being able to reach any of the assets. At the beginning of the case we debated whether or not to use a testamentary trust, a gift to minors, or to rely on guardianship. We eventually decided to use a testamentary trust because Ms. _____ really wanted to have her sister have control over any money, assets, or property left at her death until the youngest child reached the age of 25. Also, we thought having a trust would be good because Ms. _____ does not want her ex-husband to be able to reach or use any of her property, except for the house. If Ms. _____ dies while her ex-husband is still alive, he has been designated as the guardian of Ms. ____’s two daughters based on the divorce decree, and if she dies before her children reach the age of majority she wants to allow her ex-husband to live in her house until the youngest child reaches 18 years. Also, she wanted to designate her sister as the substitute guardian if her ex- husband is no longer living. In the will, I designated that all of Ms. _____’s tangible personal property will be left to her children in equal shares and any residue is to be governed by the testamentary trust. I provided for this so that if she acquires any valuable intangible property it will pass through the residue, which is governed by the trust, and Ms. _____’s ex-husband will have no opportunity to get his hands on it even though he would be the guardian of the children. As part of the trust, I provided that the house and the residue of the estate are to be governed by the trust and I identified Ms. _____’s sister, _____, as the trustee. I also designated a substitute trustee, _____, if Ms. _____ is unable or unwilling to act as trustee. The trust provides that the trustee has full discretion to distribute income or principal of the trust to the children for support, maintenance, and education until the youngest child reaches 25 years, at which time the principal is to be distributed to the children in equal shares. However, the trustee has the power to distribute the principal before the children reach 25 at her discretion. Also, the trust states that Ms. _____’s ex- husband may live in the house with the children while he is acting as guardian, so he may live there until the youngest child reaches 18 years and then he must move out. Any other trust assets may be used to pay any costs for maintaining or repairing the house, the mortgage, utilities, property taxes, and other amenities. I specified that the ex-husband is to have no control over any of the trust property and will not be responsible for paying any expenses dealing with the house. The trustee will have control and discretion over paying these expenses. Also, I specified that the ex-husband will not be considered a beneficiary or a trustee of the trust. Finally, I have prepared a living will, a durable power of attorney for health care, and a durable power of attorney for financial purposes. Ms _____ said she will look over these documents and talk with her sister to determine about her power of attorney and living will. She decided to appoint her sister as her agent for both the power of attorney
  17. 17. for health care and the power of attorney for financial purposes. I will also assist Ms. _____ in reviewing and changing, as appropriate, her life insurance beneficiary designations so that the proceeds will be assets of the trust. I believe that Ms. _____’s life insurance, which is provided through her employer, will provide sufficient funds to pay the mortgage and other expenses relating to the house.
  18. 18. VII. Wills Project Forms and Related Resources Note that in addition to the Will form and other forms already mentioned in this Handbook, the Wills Project has adopted several other forms. Unless otherwise approved by the supervising lawyer, you should base the documents on the Wills Project forms, but you should be careful to adapt each form to the specific circumstance. The Wills Project forms (available in electronic form to participating students from the Project supervisor and on Clinic computers) include the following: Eligibility and Estate Planning Questionnaire Estate Planning Checklist Engagement Agreement Will Form Advance Health Care Directive (Living Will) Durable Power of Attorney for Health Care Purposes Durable Power of Attorney for General Purposes End-of-Engagement Letter The attached appendix is a bibliography of helpful estate planning resources. For the key Arkansas statutes governing wills, trusts, and estates, consult the Decedents’ Estates Supplement used in Prof. Circo’s Decedents’ Estates Class. You do not need to be enrolled in the class to obtain access to the current version of the Supplement; you only need to be a current student at the School of Law and to “register” for the class on TWEN.
  19. 19. APPENDIX A Bibliography of Estate Planning Resources Decedents’ Estates Supplement (Detailed information regarding Arkansas statutes and selected Arkansas authorities). The DE Supplement is posted to Professor Circo’s TWEN site for his Decedents’ Estates class. William M. McGovern, Jr. & Sheldon F. Kurtz, Wills, Trusts and Estates (3d edition, 2004). The library has a copy of this popular hornbook. Jule E. Stocker, et al., Stocker and Rikoon on Drawing Wills and Trusts (12th ed. 2003). The up-to-date edition of this Practicing Law Institute drafting treatise is available on Westlaw. Thomas D. Begley, Jr. & Jo-Anne Herina Jeffreys, Representing the Elderly Client— Law and Practice (2000). The library also has this resource, which is updated periodically. Victoria Ferreira, Brantley and Haught’s Arkansas Probate (2d ed. 1993). This brief guide to probate procedure is available at the library reserve desk. Be careful when using this resource because it is significantly outdated in some respects because of revisions to the Probate Code. William D. Haught, Arkansas Bar Association Probate System (Probate Law Practice Handbook) (2005). This Arkansas Bar Association publication relating to probate practice is available at the library reserve desk. Lawrence H. Averill, Jr. & Hon. Ellen Brantley, A Comparison of Arkansas’s Current Law Concerning Succession, Wills, and Other Donative Transfers with Article II of the 1990 Uniform Probate Code, 17 U. Ark. Little Rock L. J. 631 (1995). Lynn Foster, The Arkansas Trust Code: Good Law for Arkansas, 27 U. Ark. Little Rock L. J. 191 (2005). Arkansas Bar Association’s Health Law Section’s Living Wills and Other Information on End of Life Decisions. (Note that the Wills Project form is a variation of the Bar Association’s form that includes changes that we have found generally appropriate for our clients.) These materials are currently available through a link at the Arkansas Bar Association’s website: Other useful materials may also be available through that site or through the Bar Association’s Probate and Trust Law Section. The Arkansas Legal Services Pro Bono Partnership website: Also, the law library has many other resources for estate planning, many of which you will find under Library of Congress Classifications KF730-780. 19