Banks Can Thwart Estate Plans, Too

There was a very nice article, “Ripe for Abuse: How Joint Accounts Thwart Estate Plans,” in the May 2021 Wisconsin Lawyer dealing with the possible problems our clients might face in having joint or payable on death accounts at banks and other institutions. My only problem with the article was that it did not cover the contribution banks make to this problem.

I drafted a will several years ago for an individual. It was a simple will, but did provide some unusual percentages to about four or five beneficiaries. That individual recently passed away. The personal representative of the will came in for a probate conference. She received the highest percentage under the will. She told me the story that she and the decedent, who remained very competent until her death, went to the decedent’s bank.

One of the bank’s employees told both of them that my client could avoid probate by simply placing beneficiaries on the accounts. My client did not bring up the fact that she had an existing estate plan. However, the bank employee never asked whether there was an existing estate plan. Naming beneficiaries on all the accounts essentially destroyed the intent of the will.

It was very clear to me that the bank employee was very careless in giving legal advice without a proper understanding of background information. I’m also confident she was not qualified to give estate planning advice. Upon being informed that the property would not pass under the will, the personal representative, after our conference, was most upset that the bank employee gave such legal advice and ruined the intent of the will. While some of the beneficiaries under the will may retain legal counsel, what a shame that this had to happen. In my experience, laypersons normally do not understand that the provisions of their will are trumped by naming beneficiaries in the form of nonprobate assets.

Aside from the above issue, I am of the strong opinion that banks do not wish to deal with powers of attorney. Too many of my clients have told me stories of going into a bank for purposes of having a child assist them in their older age with their financial affairs, with there being no discussion of the use of a power of attorney, even if one is already in existence. I do not believe this is innocent error on the part of the bank. Banks simply do not like powers of attorney or the time required to read those prepared by attorneys for their clients. Inevitably, under the above circumstances, there is no discussion of the propriety of using a power of attorney under such circumstances, and the bank’s solution is establishing a joint account with the child. As the article pointed out, the estate plan is then ruined or at least seriously compromised.

James J. Winiarski
James Winiarski Law Office, Milwaukee

When Are You Obligated to Correct a Court Error?

In “Is There a Duty to Correct an Error by a Court?” (Ethical Dilemma, InsideTrack, June 16, 2021), State Bar ethics counsel Timothy Pierce explored whether, when you spot an error made by the court in your client’s case, you must inform the court of the error even if the error helps your client.

Pierce noted that most lawyers rightly realize that, if an opposing party makes a mistake, it is appropriate to capitalize on that mistake. He also said most lawyers rightly realize that they have heightened duties to courts. His opinion, by necessity, depends on the facts presented (see the article).

A reader posted a comment:

Reader: I’m not sure I see the court error. Since the court is not bound by the terms of a plea agreement, and is free to impose any sentence it sees fit within the statutory maximum, there is nothing inappropriate, let alone erroneous, about a court imposing a sentence shorter than either party’s recommendation. I would argue that a criminal defense attorney who “corrects” the court in this situation has provided ineffective assistance of counsel, that is, deficient performance that prejudices the client. 

Jeffrey J. Szczewski
Szczewski Law LLC, Waukesha