ESTATE PLANNING QUESTIONNAIRE
Our questionnaire is designed to provide a comprehensive understanding of your family and its financial situation. To better understand the process, and why we ask what we do, we have designed this page.
The questionnaire should develop the most complete financial picture possible with regard to income and assets, as well as expenses and liabilities. It is important to identify the owner of assets and the type of ownership.
For example, joint ownership may provide planning opportunities that do not exist access with individually owned property. Joint ownerrship of bank accounts may avoid the necessity of initiating a guardianship proceeding. Thus, the simple act of finding out the type of ownership of assets can materially alter the direction of the plan.
In addition to listing income, it is necessary to list the source of the income, to whom the income is paid and the method of payment (check or direct deposit). The attorrney must also know where the income is deposited. For example, if the icome is a Social Secrreutiy reitrement bbenefit, is the monthly Social Securtiy payment receive in check form or bby direct deposit? Also, where is the monthly payment deposited?
Health and Long Term Care Insurance
Health insurance is another area which should be developed in the questionnaire. The most common health insurance plan for senior citizens is Medicare. The attorney must determine whether the client has Medicare Parts A and/or B, or C or any other Medicare HMO.
Having learned that the client is insured by Medicare, the attorney must next determine whether the client is enrolled in a Medicare Advantage (HMO or PPO) or has a Medicare supplemental insurance policy (sometimes referred to as a “Medigap policy”).
If at all possible, the client should bring his or her supplemental insurance policy for review. These policies can vary widely as to benefits, including covering Medicare deductibles and co- insurance. For example, some older AARP policies will cover the cost of skilled nursing home care beyond the 100-day Medicare limit, up to a maximum of 365 days. Only a policy review will provide this information, which may be essential for long term care planning.
If the client does not have a Medicare prescription drug plan, the reason may be that the client has other health insurance that provides prescription drug coverage, which may or may not have been listed on the questionnaire.
Income Tax Returns. The attorney should review the last three years’ federal income tax returns of the client. The attorney will be able to identify any discrepancies from one return to the others and have the client account for any differences. Unrevealed assets and income sources may be discovered by simply reviewing copies of income tax returns. For example, schedule “B” of the Federal Income Tax Return (Form 1040) may reveal income sources not listed on the questionnaire. The attorney can also identify assets that have vanished from one tax return to the next one. It is important to analyze these asset changes and determine what was done with those assets. It is also useful to contact the family accountant and/or financial advisor whenever possible. Client approval should be obtained before contacting any third party information source. Such third parties can often fill in gaps in the client’s financial condition.
Advance Directives. Whereas prior income tax returns can identify assets and transfers, advance directives, such as a Power of Attorney, can provide access to assets and income belonging to a client without capacity. It is therefore necessary to request and examine any Powers of Attorney signed by the client. Determine whether the Power of Attorney is valid, durable, and statutory and who is designated as the attorney-in-fact.1
Request and review any existing health care directives executed by the client. A valid Health Care Proxy or Living Will can assure that the client’s health care wishes will be identified and followed, which may not happen in the absence of such documents.
Long Term Care Insurance. A client may have long term care insurance, covering nursing home, assisted living and home care. There are many variations in long term care insurance policies that it is essential to review the policy itself.
Wills and Trusts. The attorney must also ask for and review any existing Wills executed by the client and his or her spouse to ascertain the testamentary plan of the client. This will help the attorney determine whether the plan for an incapacitated client conforms to the client’s previously expressed intent and whether the Will needs to be updated.
The Will of a spouse must be reviewed to determine, whether the spouse’s Will may alter or negate the attorney’s recommendations regarding long term care planning in the event the well spouse predeceases the ill spouse.
Any existing Trust, revocable or irrevocable, executed by the client or the client’s spouse must also be requested and reviewed. As a testamentary substitute, these instruments can identify the client’s testamentary plan. A Trust may also provide income and/or assets to a client or a client’s spouse that would materially affect the Medicaid eligibility of the client.
The attorney should ask whether a client was previously divorced. If so, a copy of the divorce decree should be obtained and reviewed. The decree may identify an entitlement or an obligation of the client or the client’s former spouse. The attorney may also find a waiver regarding the right to inherit from the former spouse’s estate.
If the client is in a second marriage, ask if a pre-or postnuptial agreement was signed, and if so, a copy must be obtained and reviewed. Prenuptial and postnuptial agreements often include mutual waivers of the marital elective share of the estate of the spouse. This could be valuable planning information in situations where one spouse requires long term care and the attorney is recommending a plan to protect the assets of that spouse.