I’ve spent some late nights recently working on trust litigation cases that could have easily been avoided if a properly drafted certificate of independent review (“CIR”) had been prepared. Many planners misdiagnose the need for a CIR.  In other circumstances, the planner believes that all they need is a CIR containing the magic language and all will be well.   I am here to tell you that that is not enough.

In one of my cases, the estate planner recognized the need for CIR because the primary beneficiary of the multi-million-dollar trust was not only a friend, but also a caregiver.  A seasoned second estate planner was hired to conduct the review and prepare the CIR. The planner met with the settlor for around an hour, went over the estate planning documents and felt comfortable drafting the CIR. Unfortunately, the planner missed a lot of information and as a result was eviscerated on cross-examination, completely undermining the CIR.

In other cases I have seen, I have noticed a pattern where a beneficiary doesn’t present like a caregiver; however, a colorable allegation can be made all the same.  The trust is then challenged, and like clockwork, the allegation is made that the trust is presumptively invalid as a matter of law because of a gift to a caregiver and a lack of a CIR.

These cases can be expensive to litigate, and many of them could have been entirely avoided with a well drafted CIR.  CIRs are more than just an administrative exercise. Their function is critical to ensuring that the intent of the trustees is honored. The documents are specifically designed to validate that the directions from the trustor/settlor are of that individual’s own free will and that the individual understood what he or she was doing in making the gift.  They can — or rather they SHOULD — be time consuming for an attorney to produce. Good CIRs take care to develop. Acting otherwise can be even more expensive, and result in costly legal expenses that can drain a trust’s assets.

Estate planning attorneys that draft such documents are performing a valuable service and need to understand the role they are planning. Moreover, a poorly crafted CIR can put the attorney at risk of being sued or, at the very least, subject the attorney to being raked over the coals in deposition and at trial – and without any compensation for their time.

At a bare minimum, here’s how CIRs should be developed:

Consider All Scenarios Where A CIR Is Warranted

Relationships between beneficiaries and trustors / testators can be ambiguous.  Remember, in litigation it’s not what happened but what you can prove.  Take your time and carefully consider whether a colorable claim could be made that a beneficiary is also a care custodian.  When in doubt, recommend a CIR.

Keep Diligent Notes

If you are acting as the scrivener for the CIR, scrupulously account for all conversations with the client and the primary estate planning attorney. Carefully review the estate planning documents, go over the key provisions with your client, and notate all conversations regarding that process.  Make sure to document the “why” as to the reason to leave assets to a caregiver or to disinherit someone else.  Remember, you could be deposed 10 years later or more – don’t expect to be able to rely on your memory.  To protect your client’s intent and yourself, take notes as if you will have zero recall at a later date and will be completely reliant on your notes.

Validate the Testator’s Capacity to Make Decisions

As attorneys we are not formally trained, nor may we make an expert opinion, on whether a client has capacity.  To the contrary, we start with the presumption that our client is competent.  But what we can do is ask questions, observe and take notes.  Most planners wouldn’t execute a CIR if they thought the testator was confused or lacked capacity.  If you prepare a CIR, make sure to identify why you think the testator is competent to make the gift and then take copious notes detailing the same.

Keep The CIR Process Independent

Farm out the responsibilities to a qualified estate planning attorney outside of your legal team and outside of your immediate sphere of influence. In other words, the more independent the better.  Otherwise you may find yourself explaining to the judge why you recommended someone that was not entirely independent to prepare an independent review.

In closing, CIRs have an important role in protecting estate plans from being called into question, but only if drafted correctly. Make sure you follow the steps to protect your client’s testamentary intent.

About the author:

Roland Achtel is a partner with Higgs Fletcher & Mack, whose practice focuses on trust and estate litigation.  He is a Certified Specialist in Estate Planning, Trust & Probate Law and has been rated AV Preeminent by Martindale Hubbell™ achieving the highest possible rating for both Legal Ability and Ethical Standards.  He has also been recognized as a Top Attorney by the SDDT, Top Lawyer by San Diego Magazine and Super Lawyer for his work in this field.  Roland can be reached at [email protected].