Offering trust administration services can be highly profitable and rewarding for your law practice. Attorneys providing legal services to fiduciaries in postdeath administrations can deliver more holistic “cradle to grave” care for estate planning clients and receive an additional steady source of income. However, this area of law is not without risks—the amount of time, attention to detail, and competence required in guiding fiduciaries through the administration process can leave an attorney vulnerable to malpractice claims and unhappy clients.
Fear of the risks should not deter you from offering this valuable, profitable legal service. On the contrary, attorneys who develop thorough and dependable procedures can be confident that they will successfully fulfill their ethical duties as outlined in the American Bar Association’s Model Rules of Professional Conduct while growing their law firm’s practice areas and business. Below are three ways in which the trust administration turnkey software Wealth Tracx® helps attorneys manage risk and uphold their ethical duties while capably and effectively representing fiduciaries in postdeath trust administrations.
1. Act with Diligence and Promptness
Deadlines are prevalent in the trust administration process, particularly when there is an associated probate proceeding or estate and other tax returns to be filed, or a beneficiary wishes to make a qualified disclaimer. In addition to juggling important tasks and multiple deadlines, attorneys must support fiduciaries as they marshal, value, and ultimately transfer or dispose of the assets subject to administration—a tedious and document-heavy process.
Assets must often be handled in unique ways. Attorneys must assist fiduciaries in contacting the appropriate parties for asset information and values and when it is time to transfer those assets from the decedent’s name to the trust, the trust to one or more beneficiaries, or the decedent’s name to a surviving joint owner or beneficiary under a transfer-on-death registration. Depending on the nature and number of assets subject to administration, these steps and the related document preparation can be very time-consuming and labor-intensive for attorneys and their staff.
To ensure that you stay on track and comply with Rule 1.3 of the Model Rules of Professional Conduct—which requires a lawyer to act with reasonable diligence and promptness in representing a client—attorneys should adopt technology that streamlines workflows and reminds attorneys and their staff of assigned tasks and deadlines (Model Rules of Prof’l Conduct r. 1.3 (Am. Bar Ass’n 1983)). Wealth Tracx offers integrated task management and document automation functionality, detailed below, that can ease the burden on attorneys and help them provide more consistent, effective, and organized counsel in postdeath trust administrations.
During the postdeath administration process, attorneys must assist fiduciaries with many critical duties and responsibilities and oversee numerous simultaneous moving parts. The customizable and comprehensive list of tasks in Wealth Tracx is designed to support an organized and reliable
trust administration process from start to finish. Users who engage with this feature of Wealth Tracx will stay on track and more easily and capably represent fiduciaries in complex administration matters.
- The “My Snapshot” banner on the home page shows an at-a-glance overview of all overdue tasks and dates, tasks and dates that are due soon, and urgent notes across all administration matters.
- When users select an administration matter from the home page, the banner view changes to reflect the overdue tasks and dates, tasks and dates that are due soon, and urgent notes for that particular administration.
- Users can reorder or remove any of the more than two hundred default tasks provided in Wealth Tracx and add their own custom tasks to fit their unique practices. Users can apply these modifications to all administration matters or one particular administration matter. A task may be assigned to any member within the practice.
- Users can choose if and when to be notified that tasks and dates are due soon or opt out of notifications.
Depending on the nature and number of assets, fiduciaries, and beneficiaries involved in an administration, preparing the necessary documents, correspondence, and reports can be very time-consuming and labor-intensive for attorneys and their staff. Wealth Tracx offers a vast range of documents, including authorizations, waivers, receipts, agreements, correspondence, and checklists, as well as numerous types of reports.
- Information entered in the Trust Summary, Parties, Assets, and Liabilities pages automatically populates into Wealth Tracx documents and reports where appropriate.
- The Tasks page contains parent tasks often followed by one or more related child tasks, which represent different documents or links that may be necessary or appropriate for the completion of the parent task. Multiple documents under the same parent task may be generated at once, and information (such as dates, enclosures, defined terms, response times, and signers) can be applied across all documents—allowing users to increase productivity and reduce the possibility of errors and inconsistencies.
2. Provide Competent Representation
Rule 1.1 of the Model Rules of Professional Conduct requires that a lawyer provide competent representation to a client. “Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.” (Model Rules of Prof’l Conduct r. 1.1 (Am. Bar Ass’n 1983)). Preparation is the foundation for competence, and a competent attorney prepares for representing a fiduciary client in a postdeath administration matter by gathering and reviewing the information and documents relevant to the decedent’s estate plan. To move forward without completing this crucial step makes competent representation impossible and may result in personal liability and costly mistakes. Wealth Tracx helps attorneys start off right by streamlining the client intake and data collection phases of the administration.
Efficient Intake and Client Interviews
During the intake portion of an administration in Wealth Tracx, the user is prompted to begin gathering information early. Starting with the first telephone call, attorneys and their staff can rely on checklists to
- collect basic facts about the decedent, such as date and place of death, memorial services, marital status, and the existence of any estate plan;
- identify the key players, such as nominated personal representatives and trustees, family members, and the decedent’s accountant or financial advisor; and
- get reminders to deliver important instructions to the potential client in preparation for the initial meeting.
The attorney must also properly plan to have a constructive and efficient initial meeting, which includes becoming familiar with the decedent’s estate planning documents. Depending on your process, it may also include preparing certain administrative documents ahead of time. The Prepare for Initial Meeting task in the Engagement segment of the Tasks page provides a number of documents including a checklist and agenda designed to make the best use of your first meeting with the fiduciary client, various correspondence regarding the terms of the trust or estate engagement and potential conflicts of interest, as well as a responsibilities chart making clear which tasks will be completed by each party.
Accurate Data Collection
The Trust Summary page of Wealth Tracx is an excellent tool to ensure that you have thoroughly reviewed the decedent’s estate planning documents and can quickly locate pertinent provisions throughout the administration. Completing a detailed Trust Summary early in the process sets the stage for your competent representation of the fiduciary client. The Trust Summary page guides users to
- identify the basic facts about the trust: whether it is joint or individual, relevant amendment and restatement dates, the initial and successor trustees, any other relevant fiduciary or nonfiduciary positions, and the governing law;
- define the administrative and dispositive provisions of the trust instrument, which may include specific distributions, marital deduction planning if the decedent has a surviving spouse, and residuary beneficiaries; and
- review the decedent’s will, history of lifetime gifts and exemption use, and other information relevant to postdeath administrations, such as whether the decedent was subject to a guardianship before death, lived in a community property state, entered into a marital or divorce settlement agreement, received social security or other governmental benefits, is entitled to the use of any deceased spouse’s unused exemption amount, had dependents, or was party to litigation before death.
3. Keep Clients Informed
Rule 1.4(a)(3) of the Model Rules of Professional Conduct provides that a lawyer shall “keep the client reasonably informed about the status of the matter.” (Model Rules of Prof’l Conduct r. 1.4(a)(3) (Am. Bar Ass’n 1983)). In addition, Rule 1.4(b) states that a lawyer shall “explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” (Model Rules of Prof’l Conduct r. 1.4(b) (Am. Bar Ass’n 1983)). Wealth Tracx has a robust library of correspondence to keep your client informed of every step of a postdeath administration—from the filing of the decedent’s will and transmission of any trustee notifications to obtaining taxpayer identification numbers and any accounting or tax return preparation.
For instance, the solution offers letters to advise your client on how to prepare for the initial meeting and to follow up with your client after that meeting. The follow-up letter can memorialize what you discussed at your initial meeting, what you will discuss or have ready to sign at your next meeting, and which tasks the fiduciary should work on completing. Engaging with the Wealth Tracx task list and using the client correspondence can keep you, your staff, and your client on track so that the trust administration never comes to a standstill.
WealthCounsel’s Wealth Tracx, a turnkey, comprehensive trust administration solution, assists attorneys with meeting their ethical duties when advising fiduciaries in postdeath administration. The functionality offered by Wealth Tracx makes it easy for attorneys to guide their fiduciary clients through the administration process with competence and efficiency. Learn more about Wealth Tracx and schedule a demo here.