"You have a malpractice case if there is no reasonable explanation
for a terrible result." and "We have a true and grievous
malpractice claim where the facts and results would surprise and dismay
the average trust and estate lawyer."
-- Jack Olendar, Esq., Washington, D. C. --
Once again estate tax relief is being discussed in Congress, one of the unforeseen consequences is that for many people, already reluctant to solve estate planning problems, this gives them just another excuse to procrastinate. While 95 % of families aren't faced with a federal estate tax problem, there are still many reasons to design a business succession strategy or complete an estate plan to preserve the security, control and value of their estate. For any family that pays unwanted estate taxes, either their advisors were unskilled or the parents were negligently oblivious to the information provided by numerous print articles, books, news reports, seminars and advice from their professional counselors. What brings this comment to the forefront? Lately I've been receiving inquiries from litigation firms seeking referrals to heirs of families that have paid estate taxes and lost businesses or farms. The obvious conclusion is there are disgruntled heirs out there who feel that their cut of the estate was diminished in some way because dad's advisors somehow "fumbled the ball". After the dust from the great tobacco lawsuit war settles, the next target may be providers of estate planning solutions that didn't work as the heirs expected. Who's on the hook? Attorneys, trust officers, accountants, financial and gift planners and life insurance agents all provide estate-planning advice; a lot has backfired. I expect some are now concerned about heirs looking to correct errors of omission and commission when the tax bill comes due.
What problems are cropping up?
The percentage of families with investable assets in excess of $1 million continues to rise and clusters of wealth exist in places where advisors still fail to provide appropriate advice. What does this mean for planners and their clients? More consideration should be given to creating teams of specialists who can craft a plan that meets the family's need for liquidity, tax reduction, control and security. Unfortunately, there are professional advisors who don't feel a responsibility to save taxes or preserve an estate. It's not uncommon to hear "the kids inherited more than they deserved" or "it's not my job to cut a tax bill" or "the client never asked me about taxes, they only wanted a simple will". Many commentators feel that an advisor has an ethical duty to present a range of options to a client that includes tax reduction and a discussion of family values an estate plan propagates. One might contrast this situation with a patient going to a physician about a head cold, and the examining doctor observes a large irregular and discolored mole. The patient didn't ask the physician about skin cancer, but the doctor has a duty to pursue the diagnosis and treatment, not wave it off and later claim in a malpractice trial that the deceased patient never asked him to do anything about an obvious problem. There should be no more excuses about clients not asking about whether or not tax saving techniques were available, clients generally don't have enough background to judge what's appropriate for their situation. After all, they chose an experienced professional advisor instead of a cookie cutter approach that assumes one size fits all; clients should have a family friendly plan crafted to meet their unique needs for flexibility. Professional tax and legal advisors should make a greater effort to educate their clients and help them understand the problem and provide solutions that meet all of their clients' concerns.
Gift and Estate Planning Services
Springfield, Illinois 62703-5314