Use Lawyer of immediate family

[street]

My question is would you use a lawyer for financial/estate planning that is a DIL for your personal portfolio business?

What are your thoughts I have been contemplating this for sometime now. I will need some help with decisions and what, when, how and where in the near future for direction.

 

[JoeWras]

My question is would you use a lawyer for financial/estate planning that is a DIL for your personal portfolio business?

What are your thoughts I have been contemplating this for sometime now. I will need some help with decisions and what, when, how and where in the near future for direction.

Nope. Too much room for future problems if things go south.

Also to be avoided:
- Any kind of lawyer (not just finance)
- Real Estate agents
- Doctors
- Insurance agents

These people should also not be your friends.

We've watched friendships break up over the use of a friend as a real estate agent. This seems to be the most common "use a family or friend" for, but it is extremely dangerous to the future relationship.

 

[Rianne]

I would not. We've had a few situations over the years where we did use personal friends or relatives or business associated of friends and/or family. For the most part, did not work out well. One high school friend of DH went into financial planning. DH remembered him as smart, friendly guy. Huge mistake.

We recently hired CPA highly recommended and my DB swore what a great CPA he is. Did not work out well for us. He's retiring this year and we're glad.

I bought a whole life policy from my DB when we were in our early 30's. Dumb thing to do. I cancelled it and it hurt my relationship with my DB.

 

[jollystomper]

A lot depends on your family dynamics and relationships.

One my sisters, a BIL (her husband), a nephew, 3 nieces, and nephew-in-law are lawyers. We are close, and we had never had an issue. They have been invaluable in many situations.

My BIL represented us when we sold our parents house. He did a great job of keeping the real estate agent and their lawyers honest, making sure all of the proper paperwork was in place, and having regular conference calls with us to keep us updated (you can imagine what it was like with 7 siblings to inherit the proceeds). We had to force him to take a payment beyond my sisters share. He said he was just happy to do it in honor of our parents, whom he loved.

Also for doctors - one of my brothers, a SIL (his wife) and a niece are doctors. It is amazing how, when they volunteer to talk for us on medical situations, how quickly the tune changes and we get much clearer and direct answers. A nephew just got admitted to medical school, so we are staying on his good side.

I do not have any hesitation going to any of then.

 

[Jerry1]

No. Too much risk for family problems. DW could never understand why I would never sell my used cars to family members. “You take good care of your cars”, she would say. But let the transmission blow a week after you sell it and what happens. Doesn’t matter how often you say sold “as is”, you’re viewed as screwing over the person. It may not even be the person you sell it to. That person my have completely understood the risk and holds you harmless, but that doesn’t mean that the cousin, uncle, brother . . . doesn’t form an opinion.

So, do you really think this person won’t ever even hint at your financial situation to others in the family? Do you think that if something is done wrong, even by pure simple human error, that you can separate your feelings to not have family issues? In the estate planning and execution, wouldn’t there be a conflict of interest?

Wouldn’t you be better off getting advice from someone outside your immediate circle and then check your thinking through casual conversation with DIL? I think so.

 

[JoeWras]

No. Too much risk for family problems. DW could never understand why I would never sell my used cars to family members.

Oh yeah, I've seen that rodeo go down badly too!

It is funny you mention this. My neighbor has a car for sale and put it out in front of the house with a for sale sign. We were talking about it and he shared he had cold feet about doing that because he doesn't want a neighbor to buy it just in case something goes wrong the day after sale.

I was actually pondering looking at it, but we both agreed we get along so well, let's not tempt fate, so I'm not even considering it anymore.

 

[brett]

We make it a policy to never do business with relatives.

That would apply double when it came to professional legal, accounting, or medical advice.

One of the best decisions we ever made was a decision not to invest or provide mortgage financing to a close relative's business. It was head over heart. The latter almost won until we came to our senses.

 

[OldShooter]

No, but I would be surprised if she would accept the work if asked. She has a direct conflict of interest in that she is potentially financially involved with your decisions. This makes it a practical impossibility for her to be a fiduciary.

 

[pacergal]

Ni, I would keep family and financial planning separate.

 

[travelover]

I wouldn't even include family members as heirs.

 

[Calico]

My question is would you use a lawyer for financial/estate planning that is a DIL for your personal portfolio business?

What are your thoughts I have been contemplating this for sometime now. I will need some help with decisions and what, when, how and where in the near future for direction.

No way. I don't mix business with family or friends. Ever. Too many ways for things to go wrong.

When you say DIL, I assume this means she is married to your son? What if someday they divorce? In addition, another poster already mentioned that she would have a professional conflict of interest and therefore should not even consider taking on the role.

 

[street]

Okay, it would be convenient but I do get your thinking. It would be best not to get them involved for many reasons I do get that!

What are your thoughts on having the law firm that she is a partner in but have someone else in the firm do the work?

 

[OldShooter]

... What are your thoughts on having the law firm that she is a partner in but have someone else in the firm do the work?

I'd be surprised if the firm would accept the assignment; it's a conflict of interest for the firm. In my experience, law firms are exceedingly strict about refusing conflicts. You could ask. Call the managing partner and explain the situation.

But why? There are lots of law firms out there. I see no particular upside to employing her firm. Is there?

 

[street]

^ true. I will find someone I can trust and work with in the next year or so.

Thanks for your honest answers and opinions.

 

[MarieIG]

You didn't mention the DIL's back round. Is she an estate or elder care attorney? I probably would not use her as a financial adviser. If you are just talking the simple stuff, i.e. reciprocal will with your wife; and thereafter to your son; with a healthcare proxies and advanced directives AND she is NOT a beneficiary under the will, and not charging you - maybe.

If you are talking about something unusual such as cutting out one of your children and leaving your entire estate to the son to which she is married: I would want an attorney who is not related to draft the will. An estate lawyer knows what she can and can not (or should not) do. This can vary from state to state.

I tried to gently bring up the topic of making wills to my parents. They then got into a such a massive argument - with each other, I just let it go. (Mind you, I suggested reciprocal spouse wills, nothing which should have provoked such a scream-fest.)

When my mother passed, I submitted the petition for letters of administration (obviously with the consent of my father - ), with the supporting paperwork, advised of my relationship, and that I was not taking a fee. No issue there.

After DF passed, it was just me, myself and I. Again no will; handled probate myself with no issues. Hired a tax attorney for the estate tax returns.

At my last firm, there was a parade of relatives coming in for their free wills, health care proxies, POAs, etc. But - standard stuff only. Spouse being the beneficiary; with children getting equal shares in the event of spouse pre-deceasing. Anything potentially raising an issue of undue influence was referred out.

Lawyers are constantly [-]hounded[/-] requested by their family members to (gratis) read their paperwork, write letters to anyone who annoys them, handle closings, deal with creditors, read employment contracts, negotiate severance packages, deal with whomever is suing them, fight your grandmother's eviction, obtain a birth certificate for an adopted great-aunt (I'm looking at you Uncle John), etc.

 

[aja8888]

^^^^ Nice post Marie...lots of truth here. I worked with law firms for 35 years in M&A work and heard all the stories. LOL (Engineer here)

 

[CoolRich59]

I say 'No' as well, but from the other side of the table.

As a newly admitted lawyer, my wife's uncle asked me to do a trust for his in-laws. I thought it would be a great way for me to "give something back" to the family and agreed to do it for a nominal fee.

Of course, I quickly learned that a well-structured trust was way more complicated than I had initially thought, even for a simple estate. After incurring out-of-pocket costs for practice guides and spending about ten times more hours than I thought it would take, I put together the trust documents.

I met with the in-laws and spent a full evening walking them through everything. They seemed grateful, but then refused to pay me because they thought I was "trying to take advantage of them". Then, my wife's uncle got mad at me because he thought I should have "done more" - even though he could not specify what more needed to be done.

I was ultimately grateful for the experience though. For the rest of my career, anytime a friend or family member had "just a quick question" about some legal matter or "just wanted me to take a quick look" at some legal document, I politely declined.

 

[street]

Thanks some great advise. The one thing I'm not trying to get is anything for free. I do see to many issues that could come up and I don't want that.

 

[Jerry1]

Of course, I quickly learned that a well-structured trust was way more complicated than I had initially thought, even for a simple estate. After incurring out-of-pocket costs for practice guides and spending about ten times more hours than I thought it would take, I put together the trust documents.

I had a similar experience as a CPA. I worked in industry but I did some taxes. Those were simple enough. Then I thought I’d get all entrepreneurial and take on some extra returns. Big mistake. I knew how to do taxes, but that didn’t mean I didn’t have to do research to get the answers I needed. I was putting in way more time than the returns were worth. Couple years of that and I stopped accepting work and politely got rid of the ones I had taken on. You can’t really dabble in a professional speciality.

 

[Sunset]

^ true. I will find someone I can trust and work with in the next year or so.

Thanks for your honest answers and opinions.

You could ask your DIL who she would use herself, or who she knows is honest/reliable/etc...

 

[MarieIG]

Thanks some great advise. The one thing I'm not trying to get is anything for free. I do see to many issues that could come up and I don't want that.

Hi Street, I am not sure of the relationship with your DIL. I would not have charged my parents (obviously); and would not have changed my DH's parents (had they lived in this country). We have offered to send them money to supplement their retirement. FIL refused, but if MIL survives him, that may yet come to pass depending on her pension situation. (Europe)

Another issue might be DIL's desire to protect you/oversee the process (not to make money off you). So, you will need to proceed with caution so as not to hurt her feelings.

 

[ExFlyBoy5]

I say 'No' as well, but from the other side of the table.

As a newly admitted lawyer, my wife's uncle asked me to do a trust for his in-laws. I thought it would be a great way for me to "give something back" to the family and agreed to do it for a nominal fee.

Of course, I quickly learned that a well-structured trust was way more complicated than I had initially thought, even for a simple estate. After incurring out-of-pocket costs for practice guides and spending about ten times more hours than I thought it would take, I put together the trust documents.

I met with the in-laws and spent a full evening walking them through everything. They seemed grateful, but then refused to pay me because they thought I was "trying to take advantage of them". Then, my wife's uncle got mad at me because he thought I should have "done more" - even though he could not specify what more needed to be done.

I was ultimately grateful for the experience though. For the rest of my career, anytime a friend or family member had "just a quick question" about some legal matter or "just wanted me to take a quick look" at some legal document, I politely declined.

Excellent post. About 10 minutes after I was sworn in, I already had one family request about a will. In the last few months I have heard requests from friends/family for wills, review commercial lease, figure out how to sell a large commercial property and dealing with a funeral home. I politely decline and say that I am not actually practicing law and don't have malpractice insurance so am unable to help.

 

[OldShooter]

I say 'No' as well, but from the other side of the table.

...

I was ultimately grateful for the experience though. For the rest of my career, anytime a friend or family member had "just a quick question" about some legal matter or "just wanted me to take a quick look" at some legal document, I politely declined.

Funny. I heard a story about a doctor who was repeatedly asked for medical advice at cocktail parties. His response was: "Sure. No problem. Please take off your clothes."

 

[Stormy Kromer]

Would you hire this person if they weren't your relative ?

 

[1-31-18]

No, but I would be surprised if she would accept the work if asked. She has a direct conflict of interest in that she is potentially financially involved with your decisions. This makes it a practical impossibility for her to be a fiduciary.

Don’t know your qualifications to give this sort of advice, but I’ve been practicing law for 38 years and I think you’re wrong.

Under settled rules, the lawyer in this case has a conflict of interest only if the OP wants her to take a position adverse to another client (or if another client wants to take a position adverse to the OP). And even then the conflict of interest can be waived in writing (by both clients). Some law firms, mine included, obtain conflict of interest waivers from most clients in advance, so as to side-step these issues.

There are often sound reasons not to engage relatives. I’ve never been on either end of such an engagement, and probably that won’t change. My relatives can’t afford my fees, to begin with. And I need to be able to fire my clients in case they prove to be difficult — it’s hard to fire a relative. But there would be no disabling conflict of interest precluding such an engagement except in the unusual circumstances identified by me above.

Likewise, any partner or associate of mine would be equally free to accept the engagement.

All of this assumes the lawyer has no role in the transaction other than a lawyer’s role; i.e., fee for service, or no-fee for service. There are ethical rules, not discussed here, that regulate lawyers’ business transactions with clients. But the mere status of being married to a potential heir of a client involved in a transaction is not a conflict of interest under prevailing rules. Indeed, some lawyers are hired by law firms precisely because of their family connections.

The best reason not to use a relative for estate planning is that other relatives will suspect, and might assert, inappropriate influence if they are unhappy with the results. The estrangement can be perpetual.