April 2007
REDUCING MALPRACTICE RISK THROUGH DOCUMENT ASSEMBLY PROGRAMS-REVIEW OF THOMSON WEST'S DRAFTING WILLS AND TRUST AGREEMENTS ON GHOSTFILL
BY TODD L. TORVINEN, ESQ.
INTRODUCTION
About 10 years ago, while reviewing a trust agreement I'd drafted, I fell asleep on the document. I woke up a while later, my cheek resting on a wet trust document, due to the snooze-induced drool from the corner of my mouth!
I figured that there had to be a better way! I started looking for document assembly programs to help me with my estate plans. At that time, I found, purchased, and began using West Publishing's Drafting Wills and Trusts on CAPS. I continue to use the successor to that program, Thomson West's Drafting Wills and Trust Agreements on GhostFill.
Along with the benefit of providing a much more pleasurable way to practice law, a good document assembly program certainly helps limit exposure to malpractice and professional error and omission.
GENERAL DESCRIPTION OF DRAFTING WILLS AND TRUST AGREEMENTS ON GHOSTFILL
GhostFill is a document assembly/automation program. GhostFill is not made by Thomson West. It is produced by an independent program vendor. Thomson West's Drafting Wills and Trust Agreements is the program which contains the underlying estate planning language and documents.
The user inputs the required variables through GhostFill. These variables typically include the name of the client, marital status of the client, number of children, amount of community property, type of the estate plan (for example an A-B trust), and customized dispositive provisions. GhostFill then assembles the documents based upon the templates provided by Thomson West's Drafting Wills and Trust Agreements.
Thomson West's Drafting Wills and Trust Agreements includes most documents a lawyer would need for general estate planning. For example, the following types of documents are included with the program:
(1) General estate planning documents, which include simple wills, pour-over wills, community property pour-over wills, single settlor revocable trusts, community property revocable trusts, and certificates of trust;
(2) Irrevocable trust documents which include irrevocable life insurance trusts with "crummey" powers, irrevocable charitable remainder trusts, irrevocable IRA management trusts, and irrevocable supplemental needs trusts (Medicaid planning);
(3) Powers of attorney which include durable powers of attorney for money-management, Nevada specific durable powers of attorney for health care, and Nevada specific health care declaration and designation by individual; and
(4) All types of trust transfer documents including bills of sale and assignments to trust documents.
Once the user fills the necessary input screens in GhostFill, the document or documents are assembled by the program. The assembled document may be customized further through an edit screen. I use NaturallySpeaking 8.0, and I regularly dictate customized language in the document through GhostFill's edit screen. A word of caution: NEVER, NEVER, NEVER remove a variable called "run script" from the editable language. This variable is necessary, and its removal destroys the entire answer set which results in a complete do-over.
Finally, when the document is finished, GhostFill allows the user to assemble it again as the final Microsoft Word document. The program automatically includes a table of contents in the final assembled Microsoft Word document.
COMMON MALPRACTICE RISKS ADDRESSED
The estate planner is required to input the client's name, spouse's name, children's names, personal representative(s) names, trustee(s) names, and attorney(s)-in-fact names. If the name is entered correctly in the first variable screen, it is spelled correctly throughout the document. The program uses the same name or names in the appropriate places throughout the documents. This minimizes the embarrassing possibility of spelling names incorrectly. It also saves a great deal of time which would normally be devoted to name-checking.
Drafting Wills and Trust Agreements on GhostFill also minimizes the possibility of referring to document articles or paragraphs which do not exist. The program assembles the documents with consecutive numbering and lettering, and for the most part, internally prevents references to article members or paragraph numbers which do not exist.
Tax warnings are also included with the program. For example, if the user selects an estate plan which contemplates paying retirement benefits into a trust (usually a bad idea), the program provides a "warning" box. Clicking this box provides the tax warning and also indicates that the program can provide selections which contain language by which the beneficiary of the trust is treated as a designated beneficiary for purposes of the minimum required distributions under IRC Section 401(a)(9). These tax warnings are extremely helpful, and point out potential tax pitfalls.
Finally, the program contains a mandatory tax allocation clause question. The program requires the estate planner to choose which trust or trust shares created will bear the estate tax burden created as a result of the death of the settlor or settlors. Tax allocation or failure to address tax allocation is one of the primary malpractice pitfalls faced by estate planners. The program addresses this risk, and forces the lawyer to think about the tax allocation issue.
BETTER LAWYER-CLIENT COMMUNICATION THROUGH REAL-TIME PRACTICE AND DOCUMENT ASSEMBLY PROGRAM(S)
Whenever I can, I prepare the first draft of my estate plans in real-time. By that I mean I have the client sit right next to me at my computer screen, and we choose the appropriate inputs. I assemble the document(s) with the client present.
This real-time method enhances communication between the lawyer and the client, and limits the risk of miscommunication which can occur when the lawyer takes notes and then prepares the documents from the notes. It also allows the lawyer to explain the document on-screen and to discuss any important dispositive provisions with the client in real-time.
For example, one common area that produces litigation is the failure to address whether property transferred to a trust will be classified as separate property or community property. The program asks the user whether all property should be designated as community property, separate property, or whether or not specific lists describing transferred separate property or community property should be generated. The property classification questions require the client and the lawyer to have a frank conversation about the effect of property classification on the estate plan. This feature of the program, combined with the real-time discussion of the issue, helps minimize the possibility of malpractice through misclassification of property as a result of miscommunication.
CONCLUSION
Thomson West's Drafting Wills and Trusts on GhostFill is a valuable tool, both from an efficiency standpoint, and from the malpractice/error and omission standpoint. Use of the program can help the lawyer avoid pitfalls in the drafting of estate planning documents. A description of the program is available at the Thomson West web site: http://west.thomson.com/dwta/.
BIOGRAPHY OF AUTHOR
Todd L. Torvinen, Esq. is a native of Northern Nevada. He is a 1983 graduate of the University of Nevada, Reno in Accounting. In 1987 he graduated from the University Of Arizona College Of Law. After law school, Mr. Torvinen worked for Arthur Andersen & Co. as an accountant, and is also a licensed CPA. Mr. Torvinen practices primarily in the areas of estate planning, family law and divorce taxation.
Mr. Torvinen is a member of the Washoe County Bar Association, the Nevada Trial Lawyers Association, and the Estate Planning Council of Reno. He served as the Financial Officer of the Nevada Bar Family Law Section Executive Council, and has served as member of the Board of Trustees of Washoe Legal Services since 1996. Mr. Torvinen has also lectured frequently at continuing education seminars for both accountants and lawyers.