Once there was a man who lied to his estate planning attorney for fear of paying higher legal fees. He was a good, hard working main, yet still he lied. The man said, “Kind Esquire, I am a simple man and I have but $200,000 for which I’ve saved all my life. I want to pass my life savings on to my only son, Paul.”
The estate planning attorney smiled and commended the man on being able to save such funds while only working menial jobs throughout his life. The estate planning attorney designed, drafted, and implemented the best estate plan possible for the man. Son, Paul, was named as beneficiary.
Two years later, the man died and Paul came to the estate planning attorney. The lie was revealed.
The man hadn’t saved $200,000; he had saved $2,000,000 and mighty federal estate taxes were owed. Paul was sad, frustrated, and, maybe, even angry.
At the time the man died, he could pass $1,000,000 without paying federal estate taxes. That’s a lot of money for a simple man; but, the man had more.
The consequences of the man lying to his estate planning attorney? About $500,000 in federal estate taxes.
The cost of advanced planning had the man revealed his true net worth?
$2,500. And, it would have been tax deductible as tax related advice.
Total loss: $497,500. Really? Really.
Moral of the story = be forthcoming and honest with your attorney. Being dishonest to save legal fees or to save face will surely have negative consequences.
Be sure to disclose all financial information and family drama. After all, your estate planning attorney can only plan for that which he knows about. Just like a medical doctor at your annual wellness exam, your estate planning attorney needs to know all about your symptoms and goals.