Trusts & Estates

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TandE

Trusts & Estates

Post by TandE » Tue Mar 03, 2020 7:47 pm

I don't see a thread for T&E, so I thought I'd start one.

First things first, there's really 3 different aspects to this field, and they're quite different:

1) Planning
2) Administration
3) Litigation

Planning is when you meet with a client and figure out what they want to do. It's part investigator, part family counseling. You need to talk to the client and get them to lay everything on the table - what they own, what other interests they have, what their family situation is like, who they want to leave things to, what issues their children have, etc. Then you design a plan that hopefully addresses all their concerns. Once the client agrees to the plan, you go and draft the documents, and do whatever else is needed to make the plan effective.
Depending on your client demographics, this might include corporate law, elder law, family law, real property, and tax. Generally speaking, clients come in 3 categories:
Young families want to make sure their children are taken care of if anything happens to them (fairly easy; anyone straight out of law school can figure this out pretty quickly)
Middle class couples need to plan for long-term care (not too complicated, but make sure you take some CLEs on LTC. But stay away from crisis planning, i.e. those who need LTC immediately, without an experienced guide, because you will make mistakes the first time you do it, guaranteed)
Wealthy families are predominantly about wealth transfer / tax planning. (don't even think about doing this without an experienced senior attorney or mentor. It gets very complicated very quickly, and the stakes are high enough to sue the attorney over any mistakes)
Additionally, issues with heirs need to be addressed. Examples include mentally and/or physically disabled children, drug/alcohol dependencies, and those with spending problems.

Administration is when someone has passed away, and the property needs to be transferred to the next generation. If there's a trust, it means following the rules of the trust. If not, it means filing with court, getting the will validated, or following state intestacy laws. There's a lot of busywork here, and it's quite easy to rack up a lot of hours on even simple estates.

Litigation is exactly what it sounds like - contesting a will, trying to invalidate a trust, etc. etc.
I don't do any litigation, so I can't really talk about it.

Best part of the practice: talking to clients, learning about them, their families, their particular situations

Riskiest part of the practice: For a starting attorney, it's very easy to get in over their head. There are a lot of readily available resources that an attorney can purchase, such as sample trust forms. But even with taking a CLE, some of the tools available for proper planning can be very complex, and without intricately knowing the underlying concepts, it's very easy to screw up. The tax code can be quite unforgiving. And don't even get me started on the Secure Act and Section 199a. Nobody has figured those out yet. Nobody.

Worst part of the practice: getting clients.
There are many ways to get clients. What works for one might not work for another. There are some T&E attorneys who spend hundreds of thousands of dollars per year on advertising, there are some T&E attorneys who get all their clients from professional referrals, there are some T&E attorneys who get all their clients by word of mouth.

The market: there are two different markets for T&E.
The retail market is your typical small shop, where most of the clients are of moderate means. It's an easy lifestyle, with most attorneys working regular office hours. Pay is better than sh*tlaw, but definitely not biglaw. Successful partners/firm owners can make bank, and though it's unusual, I know several who net a million dollars per year. It's a great job for people who don't have the chops for more complicated matters, especially if they're good at sales. Generally (and hopefully) these attorneys stay away from high net worth estate planning.
On the sophisticated side of the spectrum, there's a big shortage of experienced T&E attorneys. A few years ago nobody in biglaw was entering the field, and large firms weren't hiring anyone to practice T&E, it was considered a dying practice group. Now there's a huge demand for attorneys with sophisticated T&E experience, and a lot of firms are turning down the work. In my secondary market, I know that half the biglaw firms are actively looking and I know of mid-size firms that refuse to handle complex matters. When I put feelers out recently, I ended up with job offers across the country.

Guest

Re: Trusts & Estates

Post by Guest » Thu Mar 05, 2020 8:59 pm

Have you heard of anyone successfully transitioning t&e from corporate tax? Image

TandE

Re: Trusts & Estates

Post by TandE » Thu Mar 05, 2020 10:13 pm

Guest wrote:
Thu Mar 05, 2020 8:59 pm
Have you heard of anyone successfully transitioning t&e from corporate tax? Image
Quick answer: it's not easy, but it's doable.

Probably the easiest way to make that transition is to move to a tax boutique that also happens to do T&E work.
Or, if your firm has a T&E department, ask if you can help out. Most T&E departments are swamped right now and they'd love getting some help.

Truth is, any upscale T&E boutique, or any small to mid-size firm with a T&E practice would love to have someone with sophisticated tax experience. The problem is that you probably don't know the T&E techniques, and there might not be anyone who can train you.
If you're doing corporate tax, you should have no problem learning how to structure an IDGT, or proper discounting using QPRT, or to maximize the benefits of a FLP. But someone still needs to show you, and outside of biglaw, very few people know how to do it - realistically, there just aren't that many people who need extensive tax planning (especially outside of NYC).
When I put feelers out, no joke, I've had mid-size firms with sizeable and reputable T&E departments tell me they turn away the business because they can't do it. That also means they can't teach you to do it.

Going into retail T&E is a different matter altogether. It's very possible, but you're going to have to accept a major cut in salary (at least in the beginning) and develop a completely different skill set. Retail T&E is much more sales-oriented, it's about bringing in prospective clients and converting prospects into paying clients. Quality of the work barely even matters. If you're interested in going that route, give me a throwaway email.

Guest

Re: Trusts & Estates

Post by Guest » Fri Mar 06, 2020 11:50 am

TandE wrote:
Thu Mar 05, 2020 10:13 pm
Guest wrote:
Thu Mar 05, 2020 8:59 pm
Have you heard of anyone successfully transitioning t&e from corporate tax? Image
Quick answer: it's not easy, but it's doable.

Probably the easiest way to make that transition is to move to a tax boutique that also happens to do T&E work.
Or, if your firm has a T&E department, ask if you can help out. Most T&E departments are swamped right now and they'd love getting some help.

Truth is, any upscale T&E boutique, or any small to mid-size firm with a T&E practice would love to have someone with sophisticated tax experience. The problem is that you probably don't know the T&E techniques, and there might not be anyone who can train you.
If you're doing corporate tax, you should have no problem learning how to structure an IDGT, or proper discounting using QPRT, or to maximize the benefits of a FLP. But someone still needs to show you, and outside of biglaw, very few people know how to do it - realistically, there just aren't that many people who need extensive tax planning (especially outside of NYC).
When I put feelers out, no joke, I've had mid-size firms with sizeable and reputable T&E departments tell me they turn away the business because they can't do it. That also means they can't teach you to do it.

Going into retail T&E is a different matter altogether. It's very possible, but you're going to have to accept a major cut in salary (at least in the beginning) and develop a completely different skill set. Retail T&E is much more sales-oriented, it's about bringing in prospective clients and converting prospects into paying clients. Quality of the work barely even matters. If you're interested in going that route, give me a throwaway email.
Thanks! What do you think the benefits are of T&E vs corporate tax?

Also, what is it about 199A you find difficult? I would think it wouldn't come up in T&E much but I guess I don't really know

TandE

Re: Trusts & Estates

Post by TandE » Fri Mar 06, 2020 3:58 pm

Guest wrote:
Fri Mar 06, 2020 11:50 am
Thanks! What do you think the benefits are of T&E vs corporate tax?

Also, what is it about 199A you find difficult? I would think it wouldn't come up in T&E much but I guess I don't really know
So you're gonna have to correct me on something. I know there's standalone corporate tax practices, but I've always viewed tax as something done in conjunction with something else. As in, tax in relation to M&A, tax in relation to real estate, tax in relation to insurance, tax in relation to T&E. I always figured the tax guys/gals get pulled in whenever another department needs their help. Or, more precisely, I figure they kind of end up working in specific industries and become specialists in that area of tax.
Feel free to correct me if I'm wrong.

So to me the big benefit of T&E is that it's relatively low pressure. It's incredibly rare for a matter to be urgent - unless someone is dying, it's easy to schedule matters and meetings at your convenience. Your schedule is completely under control - you never need to pull an all-nighter, you don't need to worry about when a deal is going to close, or if a judge decides to schedule a deposition on your kid's birthday, or anything like that. Depending on the employer/department, the hours might be up there, but you can decide which days to work early or late. The only thing not entirely in your control is your clients, but a well-run operation includes scheduling the clients far enough in advance that it's still based on your schedule, and has paralegals/assistants who make sure the clients do what they need to do.
Yes, I have had the rare occasion where I had to meet a client in the hospital or where the work had to be done ASAP because the client might die, but that's probably less than once a year on average.
Additionally, change happens very slowly in the world of T&E. And with that I mean the techniques and the work. You can take an ILIT created 20 years ago, swap out a few names and numbers, and use the same document today. The underlying math for a QTIP doesn't change just because the tax rate or the discount rate change. So it's really not difficult to stay current.

Even something like 199A, which has potentially drastic changes to the clients (particularly in planning for inherited IRAs), upon review I've made exactly zero changes to any documents I've created. To answer your question, for the most part, I don't find it difficult, but it reminds me of the Tax Cuts & Jobs Act, which was written so hastily that it took a while for people to absorb all the little nuances that are in there.
But the reason 199A is important to me, is that at the level that I operate (which most T&E attorneys don't do) I also do related corporate work, such as a recent client where I reorganized their business(es) into separate entities for asset protection purposes (if Business A gets sued, Business B is protected, and vice versa). I twice had to spend several hours arguing with their accountant, the first time explaining how the transaction was tax-free, the second time because the accountant was afraid that the client might lose some tax deductions under 199A.

Guest

Re: Trusts & Estates

Post by Guest » Thu Mar 26, 2020 10:56 pm

The retail market is your typical small shop, where most of the clients are of moderate means. It's an easy lifestyle, with most attorneys working regular office hours.
At least for basic services, the market has seemed to have gotten so competitive that working regular office hours is getting more difficult unless you already have a stellar reputation. It seems as if more attorneys are adding wills/trusts to their practice since the software is getting cheaper and better. I meet many family law attorneys that have it as part of their practice, real estate attorneys, even personal injury attorneys who want to add flat fee work.

You have attorneys willing to meet clients after hours, at their house, on weekends. I know a trust and estate lawyer at a regional big law firm that works 7 days a week, even with her firm's name and network behind her.

It seems like it's getting tougher and tougher to do a 9 to 5 when clients have lawyers who are eager to give them a house visit on a 4pm on a Sunday. It makes it all the more convenient for the client to say yes to them, because they don't have to take time off work if your office is 9-5 M-F to get their estate planning done. They have other lawyers who will tell them "Forget that guy, we value customer service, I can meet you on Saturday or Sunday, any time at your convenience."
Successful partners/firm owners can make bank, and though it's unusual, I know several who net a million dollars per year. It's a great job for people who don't have the chops for more complicated matters, especially if they're good at sales. Generally (and hopefully) these attorneys stay away from high net worth estate planning.
I live in a tech area known for it's high net worth population. It seems a lot of people from these companies, especially the younger families, will just use their company's prepaid legal service (it's sort of sold to them as legal insurance for a nominal fee each month). Last I inquired, these companies were paying estate law planning attorneys $200-300 to do their Will.

This includes the high net worth individuals at these companies too, who will spend 10x that on a Pelaton for their wife, or $100,000+ on a 2nd Tesla. But the idea of paying even $1000 for legal docs when their prepaid legal insurance plan will handle it for them is absurd to them.

I know a guy who is a multi-millionaire in his late 20s who went with one of these plans, despite his high amount of assets. It's created this weird effect in the market here, where a lot of these individuals might have went for high end estate law planning services prior, are now just using whatever lawyer from their prepaid plan.

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pancakes3
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Re: Trusts & Estates

Post by pancakes3 » Fri Mar 27, 2020 10:42 am

fwiw, ime, family lawyers are still just sources of referrals for T&E and not jumping into the market themselves. haven't seen PI attys get in the game either. RE lawyers do cross-pollinate but doesn't look to be a recent development.

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