Posts Tagged ‘questionnaire’

Getting Ready for Your Appointment With the Lawyer

JULY 20, 2015 VOLUME 22 NUMBER 26

It was really hard to find the right estate planning attorney, but you’re confident you’ve made a good choice (and we’re glad it’s us). You’ve made the first appointment — it’s set for two weeks from today. You’ve gotten the questionnaire from the lawyer’s office, and it looks a little daunting, but you’re determined to get this project done. What can you do to make the appointment more productive (and possibly make the entire experience less expensive)?

The first step might seem obvious, but we’re surprised how often new clients don’t do this: fill out the questionnaire. There’s a reason we’ve sent it to you. Having at least basic information (your name and date of birth, your children’s names, the rough outlines of your assets) speeds up the process immeasurably, and makes us think you’re serious about getting your estate planning done.

But, you ask, why should you have to fill out all that information when you haven’t even decided if you like the lawyer or want to pursue the project at all? For the same reason you have to give your doctor medical information, your dentist information about your teeth, and your financial planner information about your finances. It’s what we’re going to work with, and we know from experience that if you just dictate information to us in the first appointment you’ll forget some of it, we’ll write some of it down wrong, and the whole project will take longer, cost you more and have a higher likelihood of needing changes along the way.

What else can you do in advance? How about if you give a little thought to who you want to put in charge of your affairs? We generally ask you for at least four names: who will handle your finances, and who will handle your health care decisions — and who will be backup for both of those people? You might know perfectly well who you want for those jobs, but we’re surprised how many new clients haven’t really given these critical questions much thought. You don’t have to have final answers for our first meeting, but at least have some first reactions that we can work with.

Can you bring us some paperwork? Lawyers just love paper. We like to see a recent bank statement, and one from your brokerage account, and one from your retirement plan. We don’t worry too much about the precise value of any of those assets (we know those values have changed since your statement was issued) — we just want to see the rough value, the kinds of holdings, the account number and the name and address of your broker/banker/financial planner. That way if we end up creating a living trust for you, or adjusting your beneficiary designations, we have a running start on getting the information we need.

Lawyers do love paper, but we don’t need copies of everything. Your income tax returns are surprisingly unhelpful (though the listing of income sources might help you remember that small brokerage account you hardly ever deal with but haven’t gotten around to folding into your main account). If you own real estate in Arizona (remember — we’re writing this for an Arizona audience), we probably can get all the information about the real estate directly from the county recorder — besides, you’d be surprised how often people don’t actually have the most recent deed to their property at hand (and don’t panic if that’s you, since you don’t actually need a copy of your deed in Arizona).

What else can you do to prepare? Sketch out an informal list of personal property you want to leave to particular people. No need for you to make it official, or complete — it will be a discussion point for us to talk about. If you don’t have any particular items that go to special people, or you don’t get around to this project, don’t worry — it’s probably just not important to you, and that’s fine.

Here’s another item you can think about in advance: we’ll be talking with you about powers of attorney, and whether your agent (particularly the one you name to handle finances) should be given authority to act right away or only if you become incapacitated later. If you’re like most people, you likely default to not giving them authority unless someone can prove you’ve become incapacitated. But think about it: the primary reason we’re creating a power of attorney is to avoid the necessity of a formal, official declaration that you are incapacitated, and if you make your agent go through that process you necessarily put yourself through it, too.

We’ve seen an awful lot of people who really ought to be getting help from their chosen family members, but who aren’t easily categorized as “incapacitated.” We’ve seen many others who are incapacitated, but whose physicians won’t sign any documents to that effect. We’ve seen a few powers of attorney made ineffective by the need to go through a court process to secure a declaration of incapacity. We’ll want to talk with you about that, and it would be great if you’ve thought about it a little bit in advance.

Please read the letter we sent you. Not only does it have the date and time of your appointment (did you think it was a different day or time? Let us know — we can work out the differences), but also some instructions and a heads-up about our office process. It explains that we’ll be taking your picture, copying your driver’s license or identification card, and asking your family members to wait in the front office while we talk first with you alone. We’d like you not to be surprised by any of that.

Finally, here’s what we’d love to have you do in advance of your first estate planning appointment: relax. The process isn’t actually scary or overpowering or threatening. In fact, we think many of our clients actually enjoy the process, and learn a few things about themselves while going through it. Our staff is friendly, helpful and happy to answer your questions. You’ll be fine, regardless of how much preparation you’ve managed to work in before getting to our office.

The Myth of the Simple Will

JUNE 15, 2015 VOLUME 22 NUMBER 22

“I don’t want anything complicated,” said our new client. “I just want a simple will.”

For almost four decades, we’ve been waiting for the client who wants a complicated will. We’re still waiting.

We hear the “I only want a simple will” request often. What clients really mean, of course, is “I want a cheap will.” That is, they don’t want to pay a lot for the legal advice or preparation of elaborate documents.

Our favorite variation is the client who wants a simple will, then tells us their assets are straightforward and their family situation ordinary. You know — the half-interest in a summer cabin in another state, the oil and gas interests in two other states and the closely-held family corporation that is worth somewhere between $1,000 and $10,000,000. And family situation? You know — one child has a developmental disability, another a drinking problem and the third is married to a spendthrift. But we’re just going to disinherit one, split things between the other two and trust them to work everything out.

We send a questionnaire to our prospective estate planning clients, so that we can figure out at least some of the possible issues during our first meeting — which is much more productive if we have the information at hand. Clients sometimes show up without having filled out the questionnaire, since they aren’t sure they want to hire us (hah! who wouldn’t want to hire us?) and they don’t want to go through the trouble of collecting information. More dangerous, though, are the clients who intentionally leave some of their assets off the questionnaire — in a misguided attempt, we suspect, to minimize the cost of their estate planning. That’s a little like not mentioning to the dentist that you have a persistent and painful temperature sensitivity on one tooth, hoping that it won’t need any expensive work.

Why do we even care about what assets you own? Isn’t it because we can charge you more if we know how wealthy you are?

No.

We need to know about your assets to figure out whether you have an estate tax issue. Are you pretty sure you aren’t worth the $5 million that is required before federal estate tax concerns? OK — but what about state estate taxes? Though Arizona doesn’t have one, the state where you have that summer cabin might impose one. And have you added in the face value of your life insurance policies? Also the trust your grandfather left for you, which you don’t think of as “yours”? Also the possible inheritance from your parents? Those questions are all on the questionnaire, so that we can discuss them with you.

One of the principal questions we are going to talk about with you is whether you should have a living trust. Don’t worry — we’re not going to order you to do anything. But we do want to be able to give you a realistic estimate of the cost of probating your estate, and what you might reasonably do to avoid or minimize that cost. Without good information, we can’t give you either estimate.

There are real costs associated with choosing a “simple” will. We want to be able to estimate those for you, so that you can make informed decisions. By the end of our initial conversation, we will almost certainly be able to give you a flat-fee estimate of the cost of preparing your estate plan, with at least a couple variations for you to consider. Then you can decide how much simplicity you can afford.

How often do our clients end up with what might be called a simple will? If we get to define “simple,” our estimate is about half the time — or perhaps slightly less often than that. But even clients with those simple wills also have financial powers of attorney, health care powers of attorney (with living will provisions) and an instruction letter; the entire product of our representation will almost always amount to at least a dozen pages of lawyer language. We’ll also provide a translation/guide to the documents, and we are very interested in helping you to understand the options, your choices and the documents themselves; we don’t charge more for answering questions, and we like to get the opportunity.

A word about flat fees: almost all of our estate planning is done on a “flat-fee” basis. We will quote you a fee in our initial consultation, and that’s what we will charge. Do you need four drafts and extensive revisions? No additional cost. Do you love the first draft, and need no changes? Great — we got it right. But we don’t reduce our fee for doing a good job on the first pass, either. We think that arrangement makes it easy and comfortable for both of us. You get as many appointments, revisions and discussions as you need. We get the comfort of knowing that we heard all your concerns and questions, and that we’ve had an opportunity to address everything.

Even a short, inexpensive will is not simple. It is a profound document, and it isn’t even possible to figure out what it ought to say until we’ve talked through some of the issues.

Oh, and whether your estate plan is simple or complex, inexpensive or less inexpensive, it needs to be reviewed and (probably) revised every five years or so. But that’s a different concern we need to grapple with.

Why Do I Have To Complete That Darned Questionnaire?

MAY 31, 2010  VOLUME 17, NUMBER 18
You have made your appointment to discuss estate planning. Our office has sent you a reminder letter, an explanation of what will happen when you get here, a map with parking instructions — and an 8-page questionnaire, asking for all sorts of details about your family, your assets and your wishes. Why do we make you do all that work just to have an initial estate planning appointment? Because of William Bruinsma.

Mr. Bruinsma lived in a subsidized senior housing facility in Massachusetts. He visited his lawyer in 1993 and asked for help in preparing a “simple will.” He was very secretive, and did not want to tell his lawyer about his assets. He did insist that he didn’t want to spend too much money in legal fees, and he wanted his will to be simple.

Estate planning lawyers are very familiar with the type of client. In fact, no estate planning attorney we know has ever heard a client ask for a “complicated” will — everyone thinks their wills should be simple.

What Mr. Bruinsma wanted sounded simple enough. He wanted the income from his assets (whatever they might be) to go to his sister and his long-time friend. After both of them died, the remaining money should go to a group of charities. The simple will his lawyer prepared was just two pages long.

Five years later Mr. Bruinsma died, and it turned out that his estate was about $1.7 million. The will was so simple that his estate did not qualify for a charitable deduction — meaning his estate would pay about $466,733 in federal and state estate taxes that could have been easily avoided if the lawyer had known he needed to prepare a slightly more complex will.

Was that the result Mr. Bruinsma wanted? If he had known that the investment of a few hundred dollars during his life could have dramatically increased the income stream to his sister and friend, would he have made the investment? We will never know, because his lawyer did not know to ask those questions — Mr. Bruinsma had not provided enough information to allow the lawyer to give comprehensive legal advice.

Admittedly, the facts in Mr. Bruinsma’s case are relatively extreme. OK, you’re right — the same thing would not happen today and in Arizona, because there is no federal or Arizona state estate tax in place. But our point is still valid: if we do not have a fairly complete picture of your assets, your family and your intentions, we will not be able to prepare a good will, whether or not it is a simple will. Besides, the estate tax might just return next year at the $1 million level, in which case an Arizona version of Mr. Bruinsma would be making only a $350,000 mistake.

And now you know: if you really want to surprise your estate planning lawyer, just sit down in the first conference and insist that what you are hoping for is a complex will.

Incidentally, the charities in Mr. Bruinsma’s simple will ultimately joined forces with the sister, the friend and even the state Attorney General to ask the courts to reform the will so that the estate tax effect could be eliminated. After spending, presumably, thousands of dollars in legal fees to seek that result, they were all turned down by the Supreme Judicial Court of Massachusetts (the state’s highest court). That court ruled that there is no law permitting reformation of a will to correct an alleged error on the part of the person signing the will. Mr. Bruinsma’s secrecy — and his thrift — ended up costing nearly half a million dollars. Pellegrini v. Breitenbach, May 25, 2010.

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