I recently met with a potential client and asked if they had completed the intake worksheet I use to gather information on their life situation, asset picture, and desired beneficiaries of an estate plan.  The potential clients informed me that they were not sure they needed to fill out such an intake worksheet.  Filling out the intake helps me gather the necessary information to help you properly set up you estate plan.  The importance of answering those questions and giving me the information I need is the topic of today’s blog.

 

Your Information Matters

One spouse angrily demanded to know why I needed such information, when my only job was to put together a will, and I didn’t need to know about their assets, and I just needed to write the will and do my job.

I was not prepared for the anger and distrust with which this potential client greeted me.  I thought I was trying to get up to speed on what the potential clients had in the way of assets, who they wanted to leave in charge, and to whom they wanted to leave in charge of things.  I am not sure if they thought telling me what their assets were violated some sort of protected information, or if they thought I was being too invasive with asking what they had and what they wanted to do with the things they had.   When I explained that I needed a full asset picture and I needed to understand their life situation to properly advise them and prepare an estate plan, the angry spouse told me that the angry spouse’s parents had their will done and did not need to provide the information I asked for, so I needed to just do things the way the angry spouse’s parents’ attorney had done them.

At that point I politely declined the chance to represent them in any capacity and encouraged them to go seek out the angry spouse’s parents’ attorney, who clearly did things the way the angry spouse envisioned, as I could quickly see I was not going to be on the same page as this potential client, who, incidentally, did not become a client.

I am not sure if the angry spouse did not understand client confidentiality and attorney-client privilege, so their information was not going anywhere besides to me, or if they just wanted things done the way they wanted, and not how I tried to request the information.  I also don’t know if the angry spouse realized that I need to know about assets because different types of assets are treated differently for tax and other estate planning purposes.  I also am not sure if the angry spouse realized that I do not know their family situation, and that I need to inquire about family situations from the expert on the family – the client themselves.

All of these things are vital to creating a correct, comprehensive, effective estate plan, and I need the information so nobody becomes an angry spouse when it is time to carry out an estate plan.

 

Your Information is Confidential

Whenever I ask for information, I try to impress upon you, the client, that whatever you tell me is protected by attorney-client privilege, and is subject to client confidentiality.  This means that what you tell me will not be relayed to anyone besides me, and I am legally bound to keep your information confidential.  I take this responsibility to keep your information confidential seriously, and I do not reveal anything to someone who is not authorized by the client to receive information from me.

Many times, this can frustrate family members who want me to tell them all about what their parents, or other family members, set up in an estate plan.  I am not at liberty to reveal such things, unless I have explicit permission from a client, or I am under a court order to reveal information, or some other exception applies.  Some family members have told me that I obviously have something to hide, but I do remind them that keeping information confidential is a requirement for me to keep my law license and practice law.

Not only is client confidentiality the right thing to do, but it is required of me as an attorney, so any information shared with me remains confidential.

 

Different Types of Assets are Treated Differently in Estate Planning

In my intake worksheet, I ask about what types of assets a client has, and the value of the assets.  This type of information helps inform me as to how to structure an estate plan.  I have had clients who possess dozens of pieces of real property, and clients who have millions in retirement accounts, like an IRA or 401(k), and others who have significant assets in a life insurance policy.  Each type of asset can be treated differently in an estate plan.

Real estate assets can pass through a will that goes through probate, or can be put into a trust to transfer ownership at your death, or you can even use a beneficiary’s deed for each piece of property to transfer the real estate assets without needing to go through probate.  Retirement accounts and life insurance policies have beneficiary designations that can transfer ownership to named beneficiaries without going through probate, but retirement accounts and life insurance accounts have different tax treatments.  An IRA will be taxed as income when money is taken out of the IRA, when payments are made to the beneficiaries after you die, so IRAs need to be considered carefully.  In order to properly plan for IRAs in an estate plan, I need to know what assets are kept in an IRA or other retirement account and I need to know the value of retirement accounts, so that we can plan for the payout and the tax consequences for the named beneficiaries.

Life insurance can also affect the taxable estate, since the payout from a life insurance policy is counted as part of a taxable estate.  Many life insurance payouts are not taxed as income, but if a large enough life insurance payout is made, then the payouts count as part of the taxable estate.  For 2023, the federal estate tax limit is $12.92 Million per person, of $25.84 Million per couple.  Most people do not approach these numbers, but the amounts are scheduled to be cut roughly in half in 2025.

With the increase in the value of real estate, and other increased value of assets, there may likely be more people who fall into the category of taxable estates in 2025 and beyond.  The total value of an estate is important for me to know.  I recently had a potential client couple worth approximately $18 Million.  I told them I could write an estate plan that would work for the next year and a half, and then they would need to re-do their estate plan, but I also gave them the name and phone number of a friend of mine who handles taxable estates, and encouraged them to talk to him to set up an estate plan that would last much longer for them and protect their assets from being subject to estate taxes.

For most clients, I look at their assets and see they are well below the estate tax limits, so it gives me great joy to tell them that they will not have any estate tax due when they pass away, and their kids will not need to pay tax on the inheritance they receive.  Who doesn’t love to hear they don’t have to pay taxes?

 

You Know Your Family and I Don’t, So I Need to Ask About Your Family

Not everyone’s family and life situation looks the same.  I came from a family of four children, and my parents have only been married to each other.  My wife and I have three children, and we have only been married to each other.  My youngest brother is not married and has no children.  My brother-in-law recently divorced and has four young children.  My other brother has a child who is definitely on the autism spectrum, if not full blown autistic. My nephew would definitely benefit from some sort of special needs trust.  Each family situation is unique, and I need to know about your family situation to be able to properly advise you.

If you have young children, we need to plan for what happens to your assets before they are old enough to handle the money.  If you have special needs, or disabled children, then we need to plan for their care and financial well-being.  If you have been married more than once, we need to plan for children from the different marriages, and do so in a way that is fair to your current spouse.  If you have no children, we need to plan for who will receive your assets – other relatives, some sort of charity or non-profit – or someone else entirely?  Your family situation is unique, and so are your needs, so I ask about your family situation to learn more about what you want and need.  This allows me to give you correct advice about estate planning for your family.

I need to learn about your family from the expert on your family – YOU – so I ask about your family and let you tell me what is most important to you!

 

Not Every Piece of Information I Ask For Will Be Listed in the Estate Plan, but Everything is Important to Know

Not every piece of information I ask for corresponds to a particular sentence or clause in a will or trust, or other part of your estate plan, but all of the information combines to give me a correct picture of your life, so I can give you correct legal advice and direction.  I want you to be happy with the estate plan and how it works, not an angry person like the angry spouse from my first story.  I want your estate plan to reflect what you want and work in the way that is best for you, so I need information from you to make that happen.  We can work together to make your estate plan the best it can be.  You can find the information I need by going here – this is my intake worksheet, and you can make an appointment to meet with me and discuss your needs by clicking below.