The Importance of Boilerplate

Posted on: Monday, April 8th, 2019

What clients really care about is that their estate planning documents say who will be in charge, and where their property goes when they die.  That part of their document might take up only a page or two.

Then they go a lawyer and end up with a massive pile of lengthy documents to sign, and they really only understand a fraction of what it says. So they wonder:  why are my estate planning documents so confusing and so lengthy?  Can’t lawyers just write something clear and straightforward?

The answer is that much of the obscure, and seemingly unnecessary, provisions in their estate planning documents are so-called “boilerplate.”

So what does boilerplate add?

Theoretically, boilerplate provisions allow those portions of the document that clients understand to function, and for their documents to anticipate and address unexpected situations that could possibly arise in the future.  It might be fair to compare boilerplate provisions in an estate plan to the code in a computer software program.  Computer code allows the part of the program that a user interacts with to function.  When using a software program, the code is there, but the user doesn’t see it.  But with estate planning documents, clients have to see the boilerplate language.

Is all of it really necessary?  That depends.

For example, many trust agreements will say something about the “rule against perpetuities.”  The rule against perpetuities limits the length of time that assets can stay in trust.  It would be important to include a provision addressing the rule against perpetuities if the client is creating a “dynasty trust,” which is a trust that continues over many generations.  But if an estate plan is for the trust estate to be distributed expeditiously following the death of the settlor, it would be unnecessary to say anything about the rule against perpetuities.

Let’s look at another example.  Many trust agreements will include a provision that allows the trustee to “decant” a portion of the trust into a continuing trust for the benefit of a beneficiary who has creditor problems.  That is, a trust could say that if one of the trust beneficiaries is going through a bankruptcy when the time for distribution occurs, the trustee can elect to withhold the distribution so that it cannot be reached by the creditors of the bankrupt beneficiary.  The possibility that this would come about may be remote, but such a provision might seem more worthy of inclusion in the typical trust agreement than a provision about the rule against perpetuities.

Estate planning lawyers are all over the board on the use of boilerplate.  Some think it is best just to include everything they can think of, because including these provisions will presumably do no harm, and excluding it could, in an unusual case, come into play and prevent an unforeseen problem.  Other attorneys will want to keep their documents as simple as possible, only including provisions that this particular client might benefit from.

In the end, it is almost impossible to avoid some boilerplate language in your estate planning documents. And you should be comfortable asking your lawyer to explain any provisions that confuse you or that seem unnecessary.

mm By: Chalgian & Tripp
Chalgian & Tripp