Estate Planning and Probate Counseling

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From Law Hub, this is I Am The Law, a podcast where we talk with lawyers about their jobs to shed light on how they fit into the larger legal ecosystem. In this episode, Kyle McEntee interviews a trust and estates lawyer who discusses the challenges of running her own firm.

Kyle McEntee:

We're joined today by Kathryn Cockrill, a 2009 graduate of Touro Law. Now, before starting your own firm, you cut your teeth at a small firm in Charleston. What motivated you to set out on your own?

Kathryn Cockrill:

I think it's a natural progression for most attorneys. Working at a smaller firm, you learn how to run the practice. You learn a lot about practicing law as well as the business aspect of it, and eventually you get to the point where you say, I would like to do this myself. So that is exactly what happened about five years after I had joined a small firm.

Kyle McEntee:

I'd imagine it's a little frustrating to be responsible to grow your practice and then not exactly get to share in the rewards. And that probably leads to some motivation for attorneys to cut out on their own.

Kathryn Cockrill:

Yeah, that's exactly what was going on. I wanted to do things a certain way and I have a certain type of personality that's more hands-on with clients and lots of follow up. And where I was wanted to bill, be done with the client, and move on to the next thing. So I like to take my time with things and make sure they're done correctly and follow up with clients. I get very invested in my estate planning clients and I got to the point where I knew the type of practice that I wanted to run and I knew I could do it on my own. So that's the decision I made was to open my own law firm.

Kyle McEntee:

So let's turn to that practice now. You do roughly 40% estate planning and 60% probate, which is split about 50 50 between living and death probate. Now estate planning is fairly easy to wrap your head around, at least at the general level. You help individuals and families plan for life after death. Probate is a little less accessible, I think for people who haven't been through it. Can you give a quick rundown of probate?

Kathryn Cockrill:

There are two sides of probate, living, probate and death probate. So living probate is the process of declaring a person incapacitated and then the court appointing a guardian to take care of their person and a conservator to take care of their assets.

So this process is done through the probate court in South Carolina and it takes about six months from the date of first petition to have a permanent guardian and conservator appointed. There is a final merits hearing. There has to be two doctors evaluating this alleged incapacitated person and certifying and writing whether or not they believe they can handle their own affairs. And then the incapacitated person also has a guardian ad litem, an attorney appointed for them to protect their interest because in essence, what you're doing is telling this person, you can no longer make decisions for yourself and you are going to have another person appointed to make all decisions for you. So you have to be very careful to make sure that this person is actually incapacitated and really can't handle their own affairs.

I handle a lot of these cases. Some of them are done on an emergency basis and then some are just a natural progression as people age and dementia sets in or Alzheimer's sets in and they can't handle their own affairs.

Kyle McEntee:

So in that case, who is your client? Is it the family or is it, or the people trying to have someone declared incapacitated or is it the actual person?

Kathryn Cockrill:

Well, it varies. I get a lot of calls from DSS and hospitals where they may have a person that's sitting in their facility that doesn't have any family members or the family members are not stepping up to handle this. So in that instance, I will petition the court on behalf of a proposed guardian and it's usually a certified guardian in Charleston asking the court to be appointed to take care of this person.

Kyle McEntee:

So what's that person's financial incentive to do that? I mean, imagine with a family member, you might be willing to pay for an attorney like yourself to do that because you care about the individual and making sure that they are taken care of. But if it's the health center or hospital, it's less clear to me what the incentive would be for them to do that.

Kathryn Cockrill:

Yeah, well, they're not paying for it. So part of the reason I think I stay so busy is that I'm very generous and front my hours and the legal fees to get this person, have somebody appointed. And after the appointment, I then petition the court to have my bill certified and my hours and time taken to paid out of the incapacitated person's estate. So I don't charge a facility. Sometimes I don't even charge the family members until everything's all said and done and then it's the incapacitated person that ends up paying for it.

Kyle McEntee:

So you mentioned living and death probate. That was living. Now give us a quick rundown of what death probate is like.

Kathryn Cockrill:

Not everyone's assets will go to probate court. In South Carolina, you only open a probate for deceased person if there are assets stuck in their name individually. So you have non probate assets and probated assets. Now, a non probated asset would be one that doesn't need to go to court because there is a right of survivorship or a pay on death or transfer on death and beneficiary designation on the account. So for example, IRAs, 401ks, things like that will not end up going through probate court. So the only reason you open a probate is if there's something stuck in that deceased person's name and most often it's a checking account or a savings account. Sometimes a brokerage account between spouses. It could be half of the house because it didn't have a right of survivorship on it. And then of course, if the person's single, it's typically a house.

So the process is to take those assets out of the deceased person's name and put them into the name of the beneficiary. So it's very easy when you pass away with a will because everything is spelled out who gets what, who's in charge. If you die without a will, that's referred to as dying intestate and you follow the intestacy statute. Now South Carolina's Intestacy statute says half of those assets go to the surviving spouse, the balance goes to the surviving children equally. So they split it half-and-half. This isn't so good for married people because most often you want everything to go to your surviving spouse and not have your children involved at death one.

When you open the probate, you have to have a petition, the original death certificate and original will if there is one, and then a personal representative is [inaudible 00:09:17] and appointed by the court. And then that personal representative is charged with the duty to notify creditors in a newspaper once a week for three consecutive weeks, alerting them that this person's passed. And if there is a creditor claim against person, they need to file it at the probate court. Then they also need to inventory and appraise the assets on a formal report. And this is a form that's published by the probate courts and you have to fill it out to make sure the court knows exactly what the person owned when they died. And these are just assets that don't have a right of survivorship or transfer on death.

And once that is put into the court, the court will then issue an invoice based on the value going through probate, and then you have to wait eight months from the date of publication for the creditors to file. That's a statutory claim. And then at the close of the creditor claim period, you settle the creditors, any debts, taxes that might be owed, and then you may disperse the assets. So that's the process. It takes about a year to complete. It can be frustrating for people because the assets are pretty much tied up in court during the probate period.

Kyle McEntee:

So you mentioned that this was very process oriented, which means it sounds like you're doing just a lot of management of forms and creditors coming in and making sure that all the i's are dotted and t's are crossed. Does it get contentious?

Kathryn Cockrill:

It can amongst family members. I have a few cases right now where the decedent, that's a deceased person, died without a will so it's going half-and-half to the surviving spouse and the children. And if there's a blended family issue, that can become very problematic for the surviving spouse because their step kids will have an interest in the marital home, which is not a good thing. So the good thing about South Carolina law is they allow all heirs to enter into a private family settlement agreement. And this is even if there's a will and even if there is no will, all beneficiaries and heirs may enter into an agreement altering the distribution plan. On this particular case, and I have no idea how this is going to turn out, if I can get all four kids to sign the house back over to the surviving spouse, then he doesn't need to own the house with his step kids. It's a really great thing if you can get everybody on board.

And then the other big issue is when a person passes away with minor children because those minor kids cannot sign over, they can't enter into this type of settlement agreement because they don't have the capacity to enter into agreements because they're minors. So the court always appoints a guardian ad litem and attorney to protect those minor's interests. And the guardian ad litem, I've served in this capacity as well. Guardian ad litem is not going to sign off on giving the entire house to the spouse because when that kid turns 18, they're probably going to come back and sue you and say, why did you sign that and gave up my interest and I should've have gotten X amount of dollars from my dad's probate or my mom's probate.

If you pass away in South Carolina with minor kids, you're kind of stuck. And I have one of those, I have three of those cases right now, and it's very troublesome for the surviving spouse because their kids are on their deeds. They can't refinance houses, they had to set aside a certain amount of money for them. If there's no trust set up in their will, then they have a conservatorship for minors through the probate court. And the probate court is going to dictate how that parent is going to spend the money on the child.

Kyle McEntee:

Let's talk a little bit more about your clients. Are they largely higher net worth people, lower net worth people, a mixture? What's kind of the economic status of most of your clients?

Kathryn Cockrill:

They are a mixture of people. I work closely with some funeral homes on probates and I also work closely with DSS and hospitals for those incapacitated people that don't have anybody. So I have some clients that literally own nothing and they just need some representation to help them get through whatever the process is. And then I also work with people that have a taxable estate, so they're worth upwards of $10 million. I don't discriminate. I like to help everybody.

Kyle McEntee:

So one challenge of helping everyone is that sometimes they're not going to go to pay their bills. How do you deal with that?

Kathryn Cockrill:

I typically charge a retainer upfront and I keep it in escrow. So I pretty much know for a simple probate how much my time is going to add up and how much money I'll need to cover my attorney's fees. I am always willing to help and work with people. I've done payment plans for probates and I wait till houses get sold to get paid and I have not actually been burned on a legal bill probably, knock on wood. If I'm doing work pro bono, I already know it's pro bono and I've reconciled that and I'm okay with it because I've taken the case on knowing that I'm not going to get paid.

Kyle McEntee:

About how many probates are you taking on at one time usually? I mean, I know they last about a year, so it's probably a lot concurrent at once.

Kathryn Cockrill:

Yeah, I have, I'd have to check my files. I probably have 20 probates, maybe 25 probates right now on the death side. And then another probably about 15 to 20 on the living side.

Kyle McEntee:

That's a substantial amount of work.

Kathryn Cockrill:

It is.

Kyle McEntee:

Do you have anyone working with you?

Kathryn Cockrill:

No. No, that's part of my problem. No, I opened this law practice in August and I wanted to give myself a full year before taking on an assistant. There's a law school in Charleston that has law students willing to work hourly. And at the other law firm I worked at, they employed a bunch of law clerks and I thought they were good, very eager to learn, and I'd be more than happy to take somebody like that on. I've just been wanting to make sure I financially can afford to pay somebody what they're worth because I think a lot of law students end up in situations where they're making no money and they're working incredibly long hours and not being compensated for their time. I'm somebody who believes that people should be paid what they're worth.

Kyle McEntee:

So one of the challenges you'll probably face then in the coming year is how to figure out who to hire and then how to manage them because that allowed even more work to your plate and hopefully it works on balance, but that's I guess an open question for how well it works out.

Kathryn Cockrill:

Yeah, that's to be determined, I say every day I need a paralegal. I need a paralegal because at my other law firm, I had full-time paralegal and probably about four law clerks and I was the managing attorney and I had two attorneys beneath me, so I had a lot of support and things got done timely and I didn't have to do all this, some of the clerical things, but my background is I was a paralegal for four years before going to law school, so I actually really enjoyed putting documents together and making sure the spacing looks good and making sure everything is nice and neat.

Kyle McEntee:

So you mentioned that you were a paralegal before, and I'd imagine that played some role in you deciding to go to law school. Has the practice of law been what you expected based on your experiences as a paralegal?

Kathryn Cockrill:

Well, my experience as a paralegal, I worked in a very large law firm in New Jersey. They had an office in New York as well. They had over 150 attorneys, and I worked in a toxic tort division, so I handled asbestos litigation, silica exposure, those types of cases, and it was more managed and much more just pushing paperwork. I didn't find that I had to think out of the box because everything was, there had already been global settlements on these things, so you really just had to pinpoint the person in the plant at this specific period of time and what chemicals or asbestos exposure they were exposed to. Didn't have to exercise my brain as much.

Now doing this type of stuff, every case is very unique and things while they typically are very similar to other situations from the planning side that the estate planning side, every person has different goals. They want to do different things with their estate plan. You want to make sure you're limiting taxes and making sure that their plan is going to work after they've passed. And then of course, on the probate side of things and the trust administration side, you make sure that money is protected and being distributed in accordance with the plan. So it's a little bit different because of the area of law that I've decided to focus on. I'm sure if I was sitting in a bigger firm, I would be in charge of something very small and the type of law that was being practiced will probably be very similar, each case, each client coming in. But I guess the area that I've decided to focus my practice on, it's always changing and it's always different with each client.

Kyle McEntee:

It definitely seems like there are advantages and disadvantages based on the size of firm. I'd imagine one benefit you had at starting off at a law firm, even if it wasn't huge, it had enough attorneys with experience that you could learn about the estate planning process, which in my eyes, it's enormously complex and that there's a lot to learn and I can't imagine starting your own practice in estate planning right after law school.

Kathryn Cockrill:

My time spent at that mid-size firm was invaluable. The firm is a member of a national organization that is strictly for estate planning attorneys. And so the educational resource and the biannual summits that we attended where we were, had long weekend conferences focused only on estate planning, changes in the law and different drafting techniques, and just having someone on call that was pretty much an expert in the field being able to answer any questions, that was absolutely invaluable. So I did learn a lot.

I think that if you are expecting to open up an estate planning practice right out of law school, you may be able to do it, but you'd really have to have a good mentor and a good support system because there are some things that, I mean, you're dealing with a lot of money, you're dealing with things that can't be changed after someone dies, so you got to be very careful.

Kyle McEntee:

And on top of that, people's emotions, that complicates the entirety of it.

Kathryn Cockrill:

Yeah, and you also, I find lawyers will refer to them as attorneys and counselors at law, and I find a lot of the planning side is counseling people and that can be counseling them on the law and then counseling them to make sure they're making the right decision. I have people that come in to see me, there may have been a huge blow up fight with their kids and they want to write everybody out of the plan or restrict the distribution into a trust that it's basically all tied up for their kid who made them mad for some reason.

You want to make sure that they're not rushing into things. I always tell them, take a deep breath and make sure do you really want to do this. We can put it down on paper now and please come and see me. I don't charge when people are doing rash decisions, I always say, I'm going to call you in three months and I'm going to make you come back in here and tell me how things are going to make sure that this is the plan that you really want.

I have someone that's signing a will this afternoon that his two kids, he trusts them. And then there's the third daughter that's not very responsible, but I said, not listing her down as a fiduciary, if everybody died, wouldn't you want her to handle the estate? She's going to inherit everything anyway. So I said, some people just need to see their name in print. So this is something that your daughter will see after you've passed and will say, wow, dad didn't trust me to be an executor of his estate. Even if both of my sisters had already died, that could affect her for the rest of her life. So I like to make sure that people are making good decisions and thinking about all the consequences of their decisions on their estate plan.

Kyle McEntee:

So thinking about attorneys as counselors and in some cases therapists, what do you think the impact of the onslaught of LegalZoom and Rocket Lawyer wills will be on your practice going forward in the next 10 years?

Kathryn Cockrill:

I'm not so worried about LegalZoom and Rocket Lawyer. I've reviewed a lot of their estate plans and Suze Orman has that stuff too and you can buy it. You can buy kits at Staples and Office Max too. And I've reviewed all of these estate plans, people coming in and say, well, I did a trust on LegalZoom, or I did this estate plan on LegalZoom. There are local laws that people wouldn't quite know unless they went and met with an attorney. And there are ways to draft your plan in South Carolina so that you're minimizing the expenses after you've died.

The biggest error I see in these estate plans is that the person that's putting it together, the client fails to check a box for like a residuary clause. So the court is not going to accept a will if it doesn't have a residuary clause. All that is saying, if these people died, I want this person to get it. I've seen some estate plans, I just reviewed one the other day that had specific gifts of tangible assets and a house, but then didn't say where everything else goes. So where's all your stuff going? Oh, it's right there. No, it's not. There's actually no estate plan in this will. So I've run a lot of seminars to educate people to make sure that they're making good decisions.

Some of the estate plans, if they're done by a person that really invests time into learning how to do it, they're not so bad. But again, it's like one of those things where I'm not going to diagnose myself on WebMD and I don't need a doctor to tell me that diagnosing myself on WebMD is not a good thing. Most people will never feel settled with their estate plan if they've done it themselves, and there's going to be something in the back of their head saying, this is going to get screwed up, and I'd rather just pay a lawyer to get this done correctly.

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