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Estate Planning and Technology
by Governor Preston E. Smith Regents Professor of Law I. IntroductionAn estate planning practitioner should not underestimate the positive impact technology may have on his or her practice. This article provides an overview of how technology may be used to enhance your wills, trusts, and estates practice. Focus is placed on specific sources and products which are uniquely suited to a Texas estate planning practice. Topics regarding the use of technology in a law practice generally, such as establishing a website, using billing software and time-management programs, and purchasing computer hardware, are not covered. Likewise, sources or programs with a more national focus receive only summary, if any, treatment. The article concludes with a discussion of the innovative Nevada statutes which allow wills and trusts to be completely in electronic form. Caveats:
For a continuously updated version of this article, please go to http://professorbeyer.com/Articles/Technology.htm. II. Document Preparation SoftwareThis section discusses some of the major document preparation software packages designed for the Texas practitioner. For a comprehensive list of estate planning software which includes tax preparation and trust accounting packages, see Daniel B. Evans, Wills, Trusts, and Technology – An Estate Lawyer’s Guide to Automation (2nd ed. 2004), Appendix A available at http://evans-legal.com/dan/wtt-new.html. A very useful discussion may also be found in Ronald L. Lipman, How to Build and Operate a Profitable Estate Planning and Probate Practice, South Texas College of Law, Wills & Probate Institute, ch. L (2004). A. FlexDraftFlexDraft is the brain-child of Houston attorney Barney Jones. This innovative program creates wills, revocable trusts, irrevocable trusts, and ancillary documents. Wills can be pour-over, simple, disclaimer, bypass, and “second generation.” Revocable trusts may be sole settlor or joint settlor, and can have any tax planning option and subtrust option that are available using a traditional will. Irrevocable trusts may be insurance trusts or gift trusts, either of which may be drafted in either a sole or joint settlor format. Mr. Jones explains that FlexDraft “is perhaps the most ‘plain English’ of all document assembly systems available to Texas estate planning attorneys. It uses short sentences, extensive headings, and numerous cross references (all of which are automated, so they’re always accurate). This facilitates a ‘front loaded’ drafting style: The fundamental provisions of every will and trust are in the first 2 to 6 pages in clear, understandable prose. This eliminates the need for explanatory memos and the risks they create.” The user has an on-screen dialogue in which the system asks only those questions that are relevant to the particular client. For example, the system will address QDOT issues if – but only if – the client’s spouse is not a United States citizen. FlexDraft is a stand alone program, that is, it is neither integrated within nor dependant on any word processor. Documents may be formatted for either WordPerfect or Microsoft Word and, in either case, FlexDraft automatically launches the selected word processor with each drafted document. Users can switch freely between Word and WordPerfect format. Further information about the program and how to obtain a trial copy is found at http://www.flexdraft.com/. B. ProDocProDoc publishes two document preparation products relevant to estate planning. 1. Small Estate WillsThis ‘standard’ volume “comprises 35 forms representing basic estate planning documents – wills, living trusts and medical powers of attorney. The volume contains the forms [an estate planner needs] to represent clients with uncomplicated estate issues, generally those not subject to the federal estate tax.” For more information, visit http://www.prodoc.com/texas/forms_list/tx_sm-est-will.pdf. 2. Lipman’s Wills and TrustsRonald L. Lipman, a Houston attorney, has prepared Lipman’s Wills & Trusts which is a complete estate planning package that includes 312 estate planning forms. This program is advertised as “sophisticated enough for a high-end estate planning practice, yet it is also flexible enough to simplify the preparation of wills and trusts for smaller estates. The volume includes 25 will forms, 25 revocable trusts, 41 irrevocable trusts, family limited partnerships, buy-sell agreements, prenuptial and partition agreements, as well as many other related forms. The irrevocable trusts come in many varieties, including life insurance trusts, education trusts, grandchildren’s trusts, section 142 trusts, section 867 management trusts, QPRTs, CRATs, CRUTs, GRATs, GRUTs, supplemental needs trusts, and qualified income (‘Miller’) trusts.” The program can also generate customized transmittal letters. For additional information, visit http://www.prodoc.com/texas/forms_list/tx_lipman.pdf. C. Wealth Transfer PlanningInterActive Legal Systems [ILS] publishes Wealth Transfer Planning and bills the program as “a complete drafting and expert system designed to suit the most demanding estate planning professional.” The primary authors include Michael L. Graham of Dallas, Texas and Jonathan Blattmachr who practices in New York City. Wealth Transfer Planning provides a wide variety of documents including wills, revocable trusts, powers of attorney, advice memoranda, client convenience documents, and other related agreements and materials. In addition, Wealth Transfer Planning offers extensive content-sensitive help during the drafting process by providing explanations for each question and guidance to the drafter. Warnings, where appropriate, are provided to guide the practitioner and help avoid errors. ILS advertises that an updated version will be available in April 2005 which will include a custom interface and run on the HotDocs platform to enhance the program and make it more user-friendly. For more information or to arrange a demonstration, you may contact InterActive Legal Systems at (888) 315-0872, sales@ilsdocs.com, or visit their website at http://www.ilsdocs.com. III. Texas-Specific Internet SitesThis section lists some of the Internet sites which have significant focus on Texas probate law. For an extensive list of estate planning sites in general, see Jason E. Havens’ Legal Research for Estate Planners homepage at http://www.jasonhavens.net/ and The Texas Probate Website at http://www.texasprobate.com/main/links.htm. A. TexasProbate.comAttorney Glenn Karisch out of Austin maintains a website at http://www.texasprobate.com/ which is billed as “The Best Source of Information on Estate Planning, Probate and Trust Law in Texas.” The site contains a wide variety of useful information including forms and articles. See http://www.texasprobate.com/professional/index.htm. Perhaps the most useful feature of this site, however, is the tremendous job Mr. Karisch does in tracking all Texas legislation relating to estate planning matters. The discussion of 2005 pending legislation is found at http://www.texasprobate.com/05leg/2005_bills.htm. B. ProfessorBeyer.comA portion of the author’s website is devoted to summaries of all reported Texas cases dealing with estate planning issues that have been handed down since 2000. The discussion of each case concludes with a moral, i.e., the important lesson to be learned from the case. By recognizing situations which have lead to time consuming and costly litigation in the past, estate planners can reduce the likelihood of the same situations arising with their clients. The summaries are available at http://www.professorbeyer.com/Case_Summaries/Texas_Case_Summaries.htm. Articles and other information which may be useful to the Texas practitioner may be found at http://www.professorbeyer.com/Articles/Articles.htm. C. TrustsAndEstates.netNoel C. Ice of Fort Worth maintains this website with extensive information for the estate planner. The materials on pension plans, IRAs, and related issues are especially comprehensive. See http://www.trustsandestates.net/. D. Texas Senior Law: Elder Law for TexansEl Paso attorney Richard T. Marshall sponsors this site which concentrates on the legal issues of senior citizens in Texas and contains a significant estate planning component. See http://www.texseniorlaw.com/. E. Real Estate, Probate, and Trust Law Section of the State Bar of TexasThe REPTL section of the State Bar maintains a website at http://www.reptl.org/ which provides information useful to estate planning practitioners. F. Larry AndersonA portion of Crosby attorney Larry Anderson’s website is devoted to estate planning issues and contains forms and information about a variety of topics. See http://home.earthlink.net/~laanderson/wills.htm. IV. Texas Listservs, Discussion Boards, and BlogsA. The Texas Probate Mailing ListAttorney Glenn Karisch out of Austin provides and manages “the” Texas listserv for estate planners which boasts membership of approximately 1,000 individuals. The discussion on this listserv is of high caliber and is extremely useful to anyone who practices in the wills, estates, and trusts area. Mr. Karisch describes the list as follows: The Texas Probate mailing list is for Texas attorneys and other professionals actively working in the estate planning, probate, trust and estate administration areas. It is a forum for discussing current developments and posing questions which arise in our professional practices. It is not a forum for lay persons with personal estate and probate questions, since this would tend to distract the list from its main purpose, which is to provide a means for professionals to share their experiences and expertise. Follow this link to register for the listserv: http://mailman.io.com/mailman/listinfo/probate. B. WillDrafting.comHouston attorney Mickey Davis has established a new web site at http://www.willdrafting.com/ which is designed to be “the place for Texas attorneys to exchange information about drafting wills and trusts.” Mr. Davis explains that his site takes the idea of the study group and puts it onto the web. A user may log on to the forum and post questions, comment about a new case, or discuss the latest in office automation. A user may provide interactive feedback to other members on any estate planning or probate topic. Although sharing some features of the Texas Probate Mailing List, WillDrafting.com operates in a significantly different manner. Unlike the listserv, postings on the discussion board are not sent to the user’s e-mail address unless the user requests e-mail notifications. Instead, the user visits the forum whenever he or she likes to gain access to the postings. Once logged onto the forum, the user may filter posts by category, topic, date, or member. Full text search of current topics is also available. A convenient feature is that the discussion board will remember when the user last visited the site and, if the user so desires, display only posts made since the user’s last visit. C. Texas Elder Law BlawgAs stated at http://www.elderlawblawg.com/, this site “serves as a web portal and knowledge repository to federal, state and local web information, resources and services related to Elder Law and is provided as a public service by the Barber Law Firm (www.TexasAttorney.net) in Houston, Texas. ELB’s purpose is to provide a dynamic forum for Elder Law attorneys and other professionals who are involved in serving the elderly to share their expertise, experience and current topical information.” D. Real Estate, Probate, and Trust Law Section of the State Bar of TexasThe REPTL section maintains a bulletin board for discussing probate issues at http://www.reptl.org/board/. This board is, however, rarely used. V. On-Line Access to Probate RecordsConsiderable controversy exists regarding the wisdom of making probate records available on-line. Some counties have made probate records available to one extent or another while others have determined that access to such records should be limited to inspection at the courthouse. A. Reasons For On-Line Access· Individuals doing research into a particular case will have faster, easier, and cost-effective access to the records. · The records are available for public inspection at the courthouse and thus having the records on-line makes these records more readily available to the public. · Judicial accountability may be increased if probate records are easier to access. · To avoid the problems discussed below, some commentators suggest limiting on-line access to attorneys or others who can document a legitimate reason for obtaining access. B. Reasons Against On-Line Access· Identity theft is made easier because of readily available access to private information such as social security numbers and account numbers. · Unscrupulous individuals will be able to locate “marks” by examining estate inventories as well as other filings which reveal details about persons and property. The information may then be used to help perpetrate fraudulent activity. · Loss of privacy of personal information because the information would be easily accessible to the media as well as overly-curious individuals. · Creating an on-line access system may place a financial burden on courts due to the need to purchase relatively expensive equipment and pay additional personnel. C. Texas Counties with On-Line AccessBelow is a list of counties that have, to some extent, on-line access to probate records. In some counties, access is merely to an index while in others, the complete document is available for inspection. The author makes no assertion this list is complete. For comprehensive links to the courts in all Texas counties generally, see http://www.state.tx.us/category.jsp?language=eng&categoryId=6.2.1. For links to statutory probate courts specifically, see http://www.courts.state.tx.us/trial/probate.asp.
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Fort Bend – indices and complete document scans
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Harris – docket information
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Tarrant – docket information and indices
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Travis – docket information and indices VI. E-FilingA discussion of electronic filing of court documents is beyond the scope of this article. Note, however, the unique consideration in a probate context due to the importance of presenting the actual original will document for court inspection. For the current status of e-filing in Texas including a list of the counties in which e-filing is permitted under specified circumstances, see http://www.courts.state.tx.us/oca/jcit/Efiling/EfilingHome.asp. VII. Non-Lawyer MaterialsA. Document Preparation SoftwareComputer software is rapidly becoming the most popular of the self-help estate planning techniques used by non-lawyers. Although the programs vary significantly in features and quality, they all operate basically the same way. The program asks the user a series of questions and based on the user’s answers, the program fills in blanks in boilerplate text and prints out the resulting document. More sophisticated programs ask the user a greater number of questions, plan for additional contingencies, prepare different types of estate planning documents, and provide greater opportunity for individualization. Examples of document preparation software designed for non-lawyer users include:
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Kiplinger WillPower 2004 by H&R Block
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Make Your Own Living Trust by Denis Clifford
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Quicken WillMaker Plus 2005 by Nolo Press
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Will Writer Deluxe 2005 by Encore Software (Broderbund) B. On-Line Document PreparationSeveral Internet sites allow the user, for a fee, to prepare a will and other estate planning documents on-line. The user answers a series of questions and the software generates the document. Some sites assert that the document is reviewed by a specialist before it is delivered to the user. The user receives the document by mail or directly from the site and then follows the included instructions for executing the document. Examples of these sites include: · BuildAWill – http://www.buildawill.com/ · Legacy Writer – http://www.legacywriter.com/Will_Home.html · Legaldocs – http://www.legaldocs.com/ep_ind-s.htm · LegalZoom.com – http://www.legalzoom.com/wills/index2.html · Wills.Com – http://www.wills.com/ C. Websites1. WillsAndProbate.comPlano attorney Dianne Reis maintains http://www.willsandprobate.com/ which is very consumer-oriented. It is one of the few Texas law firm sites to provide plain-English FAQs on topics such as ‘Do I need a living trust?’ and ‘Who will get my property if I die without a will?’ It also has a basic estate tax calculator that visitors may use to calculate the taxes that their estates will pay if they die this year. The site is very fast-loading and easy to navigate. 2. MyWill.comHenry C. McFadyen, Jr. of Dallas has created a website, http://www.mywill.com/, which includes several informative articles for non-lawyers (or attorneys who do not specialize in estate planning). His articles tend to go deeper than the usual question and answer approach but they are not overly technical. He covers the basics of estate planning as well as required distributions from retirement plans and the liability of one spouse for the debts of the other spouse. 3. Texas Elder Law ArchiveSan Antonio attorney Paul Premack maintains a website geared toward elder law issues at http://www.premack.com/. Among other things, the site contains a searchable archive of the past fifteen years of weekly articles he has authored for the San Antonio Express-News. Personalized forms for powers of attorney and other disability planning documents are also available for purchase. VIII. Technology Information for SurvivorsEstate planners recognize the importance of a client maintaining a comprehensive inventory of assets such as bank accounts, insurance policies, stock holdings, etc. so that the client's survivors will be able to locate these assets. As discussed in Susan B. Shor, Digital Property and the Law of Inheritance, Tech News World, Feb. 22, 2005, it is also important for a client to keep a comprehensive inventory of technology information. Ms. Shor writes:
Provided this list is kept in a secure location, such as a safe deposit box, this appears to be an excellent idea. The list would also need to be updated on a regular basis because computer users frequently change passwords and user names as well as add or subtract from the types of things kept or accessed electronically. IX. The Future – Electronic Wills & TrustsIn 2001, Nevada became the first, and so far only, state to authorize wills and trusts to be evidenced by electronic means. This section summarizes the key provisions of this ground-breaking legislation. A. Electronic RecordThe statute requires that a testator’s electronic will must be “written, created and stored in an electronic record.” Nev. Rev. Stat. 133.085 (1)(a) (2001). However, the statute does not indicate a requirement as to what type of electronic record the will must be stored on, such as CD, DVD, floppy disk, hard drive, memory card, or other means of electronic storage. B. Date and Electronic SignatureUnder the Nevada statute, the electronic will must contain the date and the testator’s electronic signature. Nev. Rev. Stat. 133.085 (1)(b) (2001). The Uniform Electronic Transactions Act defines “electronic signature” as “an electric sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” Unif. Electronic Transactions Act § 2(8). Some methods that may satisfy this requirement are signature by facsimile, typing a name at the end of an e-mail, or including a personal identification number. In addition, the electronic will must include “at least one authentication characteristic of the testator.” Nev. Rev. Stat. 133.085 (1)(b) (2001). An authentication characteristic is further defined within the same statute as a unique characteristic of a person that can be measured and recognized in the electronic record as “a biological aspect of or a physical act performed by that person.” Nev. Rev. Stat. 133.085 (6)(a) (2001). An authentication characteristic may be a digitized signature, voice recognition, facial recognition, a retinal scan, a fingerprint, or other type of authentication. Nev. Rev. Stat. 133.085 (6)(a) (2001). The statute also provides that a “digitized signature” is a graphic image of the testator’s handwritten signature that is “created, generated or stored by electronic means.” Nev. Rev. Stat. 133.085 (6)(c) (2001). A proponent of the statute pointed out that the digital signature pad frequently utilized in retail and department stores in connection with purchases made with credit cards or bank cards is already in widespread use, and would be one likely method of authentication. Matthew E. Woodhead, Comments on Senate Bill 49 (‘SB 49’)—Nevada’s Uniform Electronic Transactions Act 5. C. Only One Authoritative CopyThe statute also requires that the electronic record containing the testator’s will be created and stored in a manner so that there is only one authoritative copy of the will in existence. Nev. Rev. Stat. 133.085(1)(c)(1) (2001). An authoritative copy is a copy of the electronic will that is “original, unique, identifiable and unalterable.” Nev. Rev. Stat. 133.085(6)(b) (2001). D.
Testator or a
Person Designated by Testator in the Will Must Retain
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