University of Arkansas School of Law

University of Arkansas School of Law

Wills Project Handbook

Fall Semester 2007

[Revised July 27, 2007]

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.

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.

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 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.

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.

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 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).