The New Paradigm for
Estate Planning Services

– Gary A. Loftsgard, CFP –

GaryLoftsgard Pic


I formed an estate planning services company in 1985 that later became Integrated Trust Systems (ITS). The ITS business model was initially established to function solely as an outsource service entity for law firms who wanted to provide estate planning amenities beyond a simple “will” but did not possess the tools or staff to do. However, after two years, it became clear for a variety of reasons that a much better avenue to the market was to provide affordable estate planning services to the public through the financial advisory community. We now refer to those advisors working with ITS platform as Associate Advisors. The current ITS service model has been functioning for nearly three decades now, and has proven to be both effective and durable.

This paper is about new (but proven) paradigms for offering estate planning services. A new innovation that comes on the scene of any established industry is usually not warmly “welcomed” by the establishment itself and naturally creates controversy. The term “Multi-disciplinary Network Estate Planning” – which describes the processing activities of our service platforms – is relatively new to the establishment (the legal profession). But, it’s here to stay. There always has been and always will be new and better ways to build, operate, and serve. Innovation and expansion are integral parts of the human experience.

In April of 2011, we began offering the services of a second estate planning processing platform – My LifeCard Plan (MLCP) – which is a fully “automated” client centric system although it requires the participation of a financial advisor. Toward the end of this paper, we’ll briefly discuss and compare the main differences between our two operating platforms (ITS & MLCP) and how they are each able to function safely and legally for all participating parties.

The inherent controversy here arises primarily from the fact that certain members within a recognized industry provider – the legal profession – perceive a loss of market control. And, let’s be honest, the concern over loss of market control can be the only reason for the mostly vague, even bogus, unauthorized practice of law (UPL) legislation that has been codified in some states. In certain cases, some UPL laws have been diverged and even overruled – for obvious reasons. Probably 90% of such kind of law does NOT serve the general public. So, you as an astute advisor need to look closely and see through the UPL factor for what it is really about (money). Do not let anyone keep you from doing what you can, should, and are legally allowed to do as your clients’ trusted advisor. This is not about you misleading your clients into believing something about you or your services that is untrue; it’s about your right to function in your advisory profession under reasonable disclosures while using safe harbor, common sense protocols.

I have often told financial advisors that, when they promulgate themselves as a trusted investment/insurance advisor, they have a duty and even a responsibility to be the financial confidant their clients can rely upon. I also point out to them that “if they don’t do it” – meaning if they don’t DIRECTLY assist their clients in getting their personal estate planning goals established properly – “it will very likely not get done.”

The fact is, optimal estate planning implementations are almost always best accomplished through the use of multiple provider parties networking together to help meet clientele estate planning goals and objectives. Actually, many legal
practitioners have also come to that same conclusion and even acknowledged the obvious benefits of networking with others.

Roy Adams, a well respected, nationally known estate planning attorney, also said as much in his article – Forecast 2002: Estate Planning After EGTRRA And Sept. 11 – in the January 2002 issue of “Trusts & Estates”:

“Meanwhile, there’s another major trend for our profession to watch in 2002: Multidisciplinary estate planning is emerging with great speed and force [emphasis added].  The State of New York now allows affiliation among lawyers and non-lawyers, with lawyers sharing in the non-lawyer fees… I see the New York ethical change on fee sharing as, in part, a wise and insightful attempt to help put our profession on a strong financial footing…the trend is clear: [many] other states have already announced that they will follow New York’s lead.”


The American Bar Association Concurs

The ABA Commission on Multidisciplinary Practices established in 1999 duly recommended that “lawyers be allowed to partner with professionals from other disciplines with whom fees would be shared”.  Karen J.  Mathis, Secretary of the ABA General Practice, Solo and Small Firm Section and also Chair of the ABA Commission on Women, reports: "The issues presented by multidisciplinary practice may be the most important issues facing the profession today… Our members have valid interests and concerns about these issues, which will affect the legal profession and the public for the foreseeable future.  General practitioners are looking for alternatives to the traditional forms of law practice, which will allow them to serve clients and protect client rights to confidentiality and conflict-free legal representation… and (meet) the public’s desire for ‘one-stop-shopping’ when it comes to financial and estate planning."

In a special paper prepared for the American Bar Association Center for Professional Responsibility Symposium on Multi-jurisdictional Practice held in March of 2000, Anthony Davis wrote: “I wish to convince those attending the program of four propositions: (1) the restrictions on multi-jurisdictional practice by transactional lawyers are ubiquitous (wide-spread); (2) these restrictions seriously harm the public; (3) these restrictions harm the legal profession - to the point where the profession is likely, if it fails to cure the problem, to lose the ability to regulate itself; and (4) it is already five minutes to midnight - the wolf is at the door; the sky is about to fall”.

Other practitioners concur with the ABA Symposium publication. For example, elder law attorney Charles F.  Robinson, former chair of the ABA Law Practice Management Section, said: "I would like to form a consortium with a CPA and a money manager, and provide comprehensive service(s) on a fee basis that is split among the members of the consortium”.  Clearly, many in the legal profession see the necessity to create working alliances with members of the financial and insurance profession.


Planners, Agents and Others are Already Involved!

Because of the nature of their profession and accompanying job descriptions, financial planners and insurance agents are already directly involved with their clients in the area of estate planning.  Has an insurance agent ever sold a death-benefit product such as life insurance or certain (death benefit) annuities without helping his/her client choose a beneficiary?  Consider bank representatives, or even bank tellers, helping clients purchase and install a payable-on-death (POD) account. What about real estate agents asking a married couple how they want to specifically title their property on their forthcoming deed – which absolutely determines what happens to a married tenant’s realty interest upon death. Are they not all involved in assisting the clients with estate planning issues? The answer is obvious.  The fact is, many job descriptions require DIRECT involvement in the estate-planning process.  And that most certainly applies to you as a financial advisor. You cannot perform the services of your profession as you should if you are not willing to be involved at some level with your clients in this area.


What About Unauthorized Practice of Law (UPL) Issues?

When we take a closer look at the issues involving unauthorized practice of law (UPL) statutes, we uncover some interesting facts.  UPL statutes first appeared on the scene in 1930.  Prior to the introduction of UPL statutes, lawyers and non-lawyers alike regularly performed legal services together in a free market that benefited the general public essentially without incident (at least in comparison to the number of legal-service problems occurring in today’s environment).

As far as the activities involved in the estate planning arena are applied, most UPL statutes are difficult to interpret, and mostly impossible to enforce, when connected to the real world of common law and common sense.  Perhaps one of the most peculiar examples of such kind of legislation comes from Illinois under the “Consumer Fraud and Deceptive Business Practices Act:”

“The assembly, drafting, execution, and funding (emphasis added) of a living trust document or any of those acts by a corporation or a non-lawyer is an unlawful practice within the meaning of this Act...”

Let’s look at how real life applications of that Illinois “law” might serve (actually, cannot serve) the general public – which is what all common (Constitutional) law is about. First of all, many unwritten, illogical assumptions have to be made to derive any meaningful interpretation of that law. If the statute were to be interpreted literally, then, an Illinois attorney is apparently prohibited from having any “non-lawyer” assist him/her with living trust documents in any fashion whatsoever, including the assistance of staff personnel. Does that also mean that an Illinois-based financial planner or CPA who handles all of his clients’ financial matters would have to send his living trust (estate planning) clients to an Illinois attorney each and every time a new financial account was created in order to transfer that account to the trust?

What if the Illinois planner/advisor did not hire an attorney to create the account transfer for his client?  Would he be guilty of fraud and deception according to Illinois law, and be subject to punitive damages?  If that is the case, how then could an Illinois court apply such an imposition without disregarding the fundamental right-to-contract as guaranteed under the U.S. Constitution to every citizen?

At their face value, these kinds of “laws” must be judged as being without merit and bogus. And, it begs a question – how could anyone write and pass this type of legislation if it were not for the existence of self-serving motives? As a practical matter, such kind of “law” (as is most all UPL code) is really unenforceable. With all due respect, it is mostly deserving only of being ignored and set aside.


Legal Interpretations of UPL Statutes are Not Congruent

It should be pointed out that there are many conflicting opinions about the issues of estate-planning-related UPL issues within the legal community itself.  Surface comparisons of most UPL definitions from various jurisdictions would indicate that such kind of ambiguous law is mostly not reality and requires revisiting. For example, here are a few jurisdictional opinions/rulings to make the point:

A 1992 Florida Bar Advisory Opinion stated (in part) as follows:

Gathering the necessary information for a living trust is not (emphasis added) the practice of law and may be performed by nonlawyers...

The Florida Supreme Court issued criteria in their determination of what does and does not constitute the unlicensed practice of law, and how certain parallel issues may apply:

The (true) definition of the practice of law "must necessarily change (emphasis added) with the ever changing business (climate) and social order."

"The unauthorized practice of law and the practice of law by nonlawyers are not synonymous." Florida Bar v.  Brumbaugh, 355 So.  2d 1186, 1191-92 (Fla.  1978).  (NOTE: In other words, the Florida Supreme Court ruled that just because a non-lawyer is actually “practicing law” by performing certain “legal” tasks or services, such activities do not necessarily constitute the “unauthorized” practice of law.)

Non-lawyers are authorized (emphasis added) to practice law in the following instances… “provide, either orally or in writing, definitions… without advising whether or not a particular definition is applicable…” (PLEASE CAREFULLY NOTE THIS LEGAL OPINION).

It should be noted that financial advisors do not have to advise anyone as to the direct applicability or non-applicability of estate planning law for their clients.  However, any advisor can certainly discuss all the issues and options with his client to the extent of that advisor’s experience and knowledge base.  In other words, advisors can simply leave the ultimate applicability and suitability determinations up to the client’s legal counsel. A financial advisor does not have to (and must not) make those legal determinations to be helpful to a client establishing an estate plan.


Who is Filing UPL Complaints?

A Cato Institute study conducted years ago stated that ninety-eight percent (98%) of all UPL complaints were initiated by lawyers.  In other words, it was the lawyers, themselves, who filed 49 out of every 50 UPL complaints.  Yet, those in the legal profession who promote these UPL restrictions want everyone to believe that such kind of statutory law exists only to protect the general public.  A discriminating evaluation of UPL statutes reveals that a much different overall effect is created by this type of law making, rather than that of protecting the public.


A Common Sense Reversal

A 1961 Arizona state supreme court decision – prompted, of course, by the Arizona Bar Association – ruled that the preparation of realty deeds constituted the "practice of law" and it was therefore unlawful for any nonlawyers to be involved in such activity (State Bar of Arizona v. Arizona Land Title & Trust Co.). The Arizona realtors rigorously campaigned against that decision by eventually causing an amendment to the AZ Constitution be introduced. A public vote of nearly 4 to 1 in favor of the amendment reversed that “law” and also eventually led to the “sunset” laws that effectively removed UPL statutes from Arizona code entirely. And, the Arizona public has been getting along just fine ever since with nonlawyers drafting realty deeds and many other kinds of legal documents.

Clearly, there is a need for “common law” interpretations and the application of the same for UPL statutes. It would obviously be deemed as the unauthorized practice of law for someone to represent himself as a licensed attorney when he is not and to charge fees under that false pretense. That would clearly be deception and fraud. But, it’s an entirely different matter for someone to provide services for another with the patron’s full understanding of the nature and status of the service provider.


A Law Professor’s Candid Opinion About UPL Statutes

George C.  Leef, adjunct Professor of Law and Economics at Northwood University and later Director of Research of the John W. Pope Center for Higher Education Policy stated in his treatise The Case for a Free Market in Legal Services:

“We start with the fact that no U.S.  Supreme Court case has, after first identifying speech as fully protected, acquiesced in a regulatory system that forbade that speech to all but a handful of individuals who were licensed by the government to engage in it.  But this is precisely how UPL laws (attempt to) operate.  They (UPL laws) (try to) forbid everyone except licensed lawyers from imparting information about the law and about how to use and access a branch of government.  In this respect, current UPL laws achieve the exact opposite of narrow tailoring.  In fact UPL laws are specifically tailored to have all the subtlety of a blunderbuss”.


In Another Paper, Mr. Leef Also Wrote:

The practical case for permitting a free market in legal services is supported by several case studies. In England, for example, conveyancing services—that is, the legal work associated with transferring real estate titles—had been a legal monopoly for over a century. But in the 1970s, the public complained about the high cost of those services. Like bar associations in the United States, the English Law Society had restrained competition with recommended fee scales and a prohibition against advertising. As Avrom Sherr and Simon Domberger wrote in the International Review of Law and Economics (1989), "The conveyancing monopoly came to be viewed with increasing hostility by aspiring homeowners and by a government committed to greater competition."

Consequently, in 1984 Prime Minister Margaret Thatcher’s government announced that, beginning in 1987, the market would be opened to "licensed conveyancers" who were not members of the legal profession. That edict began what Sherr and Domberger call "a unique, controlled experiment in the liberalization of the supply of legal services." The result was that the market for conveyancing services was transformed even before conveyancers entered the market. The authors wrote:

Fees started to fall in 1984 . . . a full three years before licensed conveyancers entered the market. By 1986 the discriminatory element in the combined fees charged for sales and purchases of property had fallen by one-third. . . . The threat of competition has yielded significant welfare benefits. Price discrimination has been reduced, conveyancing costs have fallen in real terms, and there has been a measurable improvement in consumer satisfaction.


The Legitimacy/Lawfulness of Marketing

Another misdirected legal argument states that when a non-lawyer talks publicly about the benefits of estate planning with trusts, he is pursuing an unacceptable ulterior motive (and is also giving unauthorized legal advice at the same time) in trying to get in front of clients solely to sell more securities and/or insurance products.  Of course, if someone is trying to use estate planning (for example) to get in front of a client to sell a non-suitable, high commission product without substantive regard to the welfare of the client, then that is obviously a problem.  But non-lawyer CFPs, for example, are held to a standard that includes examining and discussing all planning issues with the client, including estate planning.  ChFCs, CLUs, CPAs (etc.) who hold themselves out as “planners” would seem to have the same responsibilities.  Everyone has a right to pursue the development of his own legitimate business in a free market.  If someone is doing a bad job then the marketplace itself will ultimately discard that person’s services; it works every time.

How about an insurance agent who believes in the benefits of life insurance?  Is talking to his clients about the benefits of irrevocable insurance trusts, for example, to be defined as unauthorized activity?  Is the information-gathering interview by that agent, or any other non-lawyer professional, concerning a client’s family planning goals and objectives permissible only if it has nothing to do with - and if there is no discussion about - estate planning?  Again, the attempt to impose a broad-based definition to the “practice of law” is ENTIRELY unrealistic in the real world.

There are many lawyers active in the “estate planning market” these days.  Part of that activity constitutes the lawyer presenting a free seminar on living trusts and then inviting all interested attendees to take advantage of a free, one-hour consultation (with the lawyer) to help determine if a client wants or needs a trust.  The laws of economics indicate that there must be an “ulterior” motive on the part of the lawyer since he or she cannot possibly operate a law practice for very long by providing only free seminars and interviews.  Notwithstanding, the seminar-giving lawyer’s ulterior motive in this case is neither wrong nor unethical (ever since the Supreme Court’s ruling allowing attorneys to market their own personal legal services) as long as he is performing proper due diligence in fitting his client with a proper and fully funded estate plan.


Clients Do Need Legal Representation

The underlying concerns involving UPL arguments accorded to activities within the circle of estate planning professionals can reduced to one or more of a few important doctrines – (i) proper disclosure, (ii) legal determination of “specified” applicability/suitability, and (iii) legal recourse.  If a lawyer is involved at some point in the process of providing the client a legal opinion as to the applicability and suitability of custom-drafted estate plan, then it would seem clear that the client has obtained legal representation.  Proper legal representation can be an important component in multi-disciplinary transactions involving asset-disposition and contracts such as trusts.

Professionals of various disciplines can and should work together for the common good of the estate planning public.  Let’s maintain common courtesy and respect for the client’s ability to use his own personal discretion concerning whom he chooses to rely on; let’s show the same respect for one another.  If someone – lawyer or non-lawyer alike – has slanted and/or misrepresented a particular product or service then, by all means, the problem needs to be addressed.


Attorneys Often Need an Advisor’s Assistance

Today there are many different types of assets that clients may possess in their financial portfolio.  These assets can vary in their specific uses and characteristics.  Therefore, the matter of how to properly manage and transfer certain assets may well be beyond the scope of the common lawyer’s experience.  The issue of estate planning has little meaning if the client had not first worked a plan to (a) accumulate property (investments) and then (b) preserve the property (risk management etc.); now he wants to set up a plan to (c) transfer the property.  These worthwhile planning objectives usually create the need for using a multi-faceted team.

Most of the living-trust estate plans that this author has reviewed which were not funded, or at least not fully funded, originated from law firms.  That pattern can be exemplified by the following quote from a publication offered several years ago by the Board of Regents of the California Continuing Education of the Bar (Second Edition, 1984); the book is titled Drafting California Revocable Living Trusts; viz:

“The attorney will have to charge for his or her time in funding the trust and should encourage (emphasis added) the client to use the services of a stockbroker, an insurance agent, and bank personnel to help transfer property to the trust, unless the client is prepared to incur additional (emphasis added) legal costs… the attorney may either personally oversee the transfer of assets to the trust or instruct… on how to accomplish the transfer of each asset.”

Most lawyers do not have a vested interest in getting the plan funded unless they charge a larger (sometimes much larger) fee to provide that service.  Therefore, most living trust plans provided by law firms generally do not get fully funded.  Lawyers usually don’t sell residual products such as insurance or securities, and therefore “don’t have the extra time” to work with the plan any further.  So, the full implementation/funding process is often left undone.


Final Analysis and Solutions

If you’re considered as a personal trusted advisor by your clients, you cannot ignore your responsibility to DIRECTLY assist them over these very important matters that involve establishing an estate plan. Unless you are working with an attorney whom (i) you fully trust, (ii) does not overcharge your client for his/her services, (iii) has the skills, knowledge & tools to get the job done right and in a timely manner, you should consider one or both of our service platforms to help you. So, in light of our forthright discussion about UPL matters, let’s briefly discuss why either of our services – (ITS) or (MLCP) – can be safely used by you, a financial advisor.

1) The ITS service platform is built entirely around software that supports and requires the use of what we call the ITS Interdisciplinary Networking Service Protocol (INSP). NOTE: A detailed description of the INSP is linked to the “Protocol” button in the upper right hand corner of the ITS homepage. ITS has designed a sophisticated but convenient system to function as a back office service entity for the attorney-of-record (AOR) who is participating in the estate plan setup process by providing independent legal representation for the client (that you bring to the platform). That processing event has safely occurred approximately 17,000 times in the past 28 years for clients in all 50 states. Moreover, we estimate that approximately 2-3 $billion of estate value has been transferred from one generation to the next through the ITS platforms as a result of client/grantors’ deaths. Here’s how it works:

    You should already realize by now that you, as a non-lawyer, have the absolute right to
        discuss estate planning options with your client and gather client information; you can
        even make suggestions. Not only is that activity your right and duty, it’s a service 
        model you should be performing both for the sake of your own business and your
        clients’ benefit.

     The ITS processing structure allows you, as the Associate Advisor, to retain full control
        of the client relationship; you’re the quarterback so to speak. Yet, the INSP processing
        protocol assures that your client can receive independent legal counsel (see the INSP
        white paper) who will ultimately make the important applicability and suitability
        determinations on behalf of your client concerning the estate plan. Your main job will
        be to deliver the plan to your client and, as importantly, make sure it gets fully
        implemented/funded through your DIRECT personal assistance

     UPL is not an issue here. You simply AVOID MAKING DETERMINATIONS OF THE
        SPECIFIED APPLICABILITY/SUITABILITY OF THE PLAN on behalf of your client during
        any part of the process. That is the job of your client’s legal counsel in providing
        independent legal representation services directly through the dynamics of the ITS

   ◆   A Licensed legal counselor – working as the “attorney-of-record” (AOR) (also referred
        to as the Network Attorney [NA]) – selected by your client, will perform the interview for
        your client after you have submitted the initial client data to the platform for the
        attorney review and attorney/client interview. Then, after the customized documents
        have been processed by the ITS back office service on behalf of the AOR’s directives
        and under his/her supervision, the AOR will review to approve (and submit for printing)
        the documents, or mandate further drafting modifications before final printing. If
        preferred, your clients may utilize their own family attorney on the ITS platform – in
        place of anyone on the Network Attorney list – to provide the independent legal
        counsel determination of applicability and suitability concerning the estate plan (the
        family attorney must first register, however, for attorney access to the platform).

2) The MLCP service platform features a much different operating mode. Unlike the initial attorney contact and customization process built into the ITS protocol, the MLCP system provides pre-formulated document templates that can be populated and individually crafted through “auto-generation” using data entries and check-the-box options selected SOLELY by the client.

   ◆  There is no stand-alone custom drafting on the part of ITS. The client may, however,
        request and receive help from the ITS support offices as needed; but any such
        assistance is NEVER to be deemed as, or take the form of (or a replacement for),
        independent legal counsel or legal assistance. The MLCP Contract and Purchase
        Agreement is very clear on that matter.

   ◆  There are several features built into the MLCP platform – including electronic
        signature (ESIGN) functionality and an online Funding Kit (for the trust packages) –  
        that make the MLCP “Do It Yourself” experience very easy and technologically 
        dynamic for your clients to use; and they will still need your Associate Advisor
        connection to the MLCP platform to make it all work.

   ◆  With MLCP, the process for your clients to bring in their attorney for providing
        independent legal counsel is different than the ITS method, but it is easy to do. With
        MLCP, clients have a convenient module called “Share Console”. The Share Console
        dynamic allows your client to send a platform-generated email to his/her attorney of
        choice that contains a “Share Console” login page to the Client Console with chosen
        limited access. Your client can fully choose the areas of the Client Console that he/she
        wants the attorney to see, or not see (including things like personal Medical Directives,

   ◆  Through the Share Console portal, the attorney can view the initial information base
        entered by the client and all the documents auto-generated therefrom. The Share
        Console user-attorney can also add, delete or modify client data to alter the
        documents per his/her own legal discretion on behalf of the client as many times as
        needed or desired. All of this can be done anytime (24/7) as long as your client has
        “contracted” access to the Client Console.

   ◆  With the powerful ESIGN and electronic Funding Kit dynamics built into the MLCP
        platform, your clients could effectively generate a fully funded living trust estate plan
        from the privacy of their home in about an hour! And, it can only be done under your
        MLCP Associate Console database.