case study and group questions for drafting an … · 2019-08-06 · grand rapids, mi 48892 b. mark...

© The Institute of Continuing Legal Education 2-1

CASE STUDY AND GROUP QUESTIONS FOR

DRAFTING AN ESTATE PLAN FOR AN ESTATE UNDER $5 MILLION

PROBATE CERTIFICATE LIMITED ENROLLMENT SEMINAR1

You have had an office conference with Mark and Nancy Andrews. They have provided

you with the information contained in the attached questionnaire.

This is a second marriage for Mark, and a first marriage for Nancy. They have no estate

planning documents. Their objectives are to avoid or minimize taxes, avoid probate,

protect assets from creditors’ claims (Mark is concerned about medical malpractice

exposure), and protect and provide assets for the benefit of their minor children. Mark

would like his daughter, Susan, to get something at the time of his death, even if Nancy is

surviving. Susan is developmentally disabled and receives SSI and Medicaid benefits.

Susan lives in a group home managed by Community Mental Health, and has a part-time

job at a local McDonald’s restaurant. Because of the age difference, Mark is also

concerned about protecting assets for his children in the event that Nancy were to remarry

following his death.

You should do the following:

Group 1:

1. Analyze the client's existing estate and make recommendations to carry out planning

objectives for Susan.

2. Determine and recommend what the clients should do about their existing life

insurance. Determine and recommend if they need additional life insurance; if they

do, how should it be structured for tax and planning purposes?

Group 2:


objectives regarding taxes, probate avoidance, and creditor protection. This would

include selecting marital deduction planning methods.

2. Analyze funding issues and recommend to clients how they should hold title to their

assets, including whether they should fund assets in their trusts; and if so, how those

assets should be handled.

Group 3:


objectives regarding their retirement assets.

1 This hypothetical case study was prepared by John E. Bos, Chalgian & Tripp, PLLC.

Drafting an Estate Plan for an Estate Under $5 Million

2-2 © The Institute of Continuing Legal Education


objectives regarding their minor children. This would include recommendations

regarding selecting fiduciaries.


ESTATE PLANNING QUESTIONNAIRE ______________________________________________

Explanation

The purpose of this Questionnaire is to record information that will be used to

prepare your estate plan, including a Will and/or Trust Agreement. All of the

information is essential. Portions of it will also be helpful in the administration of the

estate or trust and in some cases, required for the preparation of tax returns.

Depending upon your desires, you may prefer to show only the basic

information in the belief that you have only a simple estate. However, it is generally true

that we can minimize certain expenses and save time in planning your estate if we are

furnished with as much information as possible. Your time spent in accurately

completing this Questionnaire will certainly save considerable time, effort and confusion

later.

In the event that insufficient space is provided in this Questionnaire in any

specific area, please use and attach additional sheets.

DOCUMENTS TO BE ATTACHED

Attached or N/A

1. Existing Wills

If so, is it on file? Where? _______________________

N/A

2. Life insurance policies and annuities

YES – SEE QUESTIONNAIRE

3. Income tax return for last year

_____________

4. Schedule of gifts and all Gift tax returns that have been

filed

N/A

5. Business agreements and documents regarding interests in

corporations, partnerships and sole proprietorships

_____________

6. Deeds and land contracts

_____________

7. Statements from Financial Institutions

_____________



Instructions

A. Attach additional sheets if necessary.

B. Mark "N/A" by those items which are not applicable.

C. When describing your assets, use "J" for assets jointly owned assets and state

the name of the joint owners; use 'C' for assets owned in your name alone; and

'S' for assets owned in your spouse's name alone.

General Information

YOU

Name: MARK ANDREWS, M.D.

Full Legal Name: MARK GREGORY ANDREWS

Address: 3864 HUMMINGBIRD DRIVE

GRAND RAPIDS, MI 48892

County: KENT

Home Phone:

United States Citizen: Yes X No___

Social Security Number: 824-11-9011

Date of Birth: AUGUST 13, 1974

Employer: KENT PHYSICIANS GROUP, P.C.

Business Address:

Business Telephone:

Marital Status: MARRIED (2ND MARRIAGE)

Have you and your spouse ever resided in the following states (please circle if

applicable):

Arizona California Idaho Louisiana New Mexico Nebraska Texas Washington

Case Study


SPOUSE

Name: NANCY ANDREWS

Full Legal Name: NANCY MARIE ANDREWS

United States Citizen: Yes X No

Social Security Number: 047-22-4722

Date of Birth: NOVEMBER 7, 1990

Employer: UNEMPLOYED

Business Address: N/A

Business Telephone: N/A

CHILDREN

Name, Address and Phone Number Birthdate

a. MICHAEL JOHN ANDREWS 5/13/2013

3864 HUMMINGBIRD DRIVE


b. MARK GREGORY ANDREWS, JR. 9/8/2015

3864 HUMMINGBIRD DRIVE


c. SUSAN ANNE ANDREWS* 7/7/2001

421 FAIRVIEW

LANSING, MI 48911

*MARK’S CHILD FROM 1ST MARRIAGE



GRANDCHILDREN

Their Parents Names of Grandchildren Birthdate

a. ____________ (1) NONE_______________________________________

____________ (2) _____________________________________________

(3) _____________________________________________

b. ____________ (1) _____________________________________________

____________ (2) _____________________________________________

(3) _____________________________________________

Parents

You Spouse

Father: _DECEASED__________________ _HAROLD SPRINGER ____64____

Name Birthdate Name Birthdate

___________________________ _______________________________

Address Address

___________________________ _PETOSKEY, MI_______________

City, State, Zip City, State, Zip

Mother: _MABLE ANDREWS____75____ _MARTHA SPRINGER____62____

Name Birthdate Name Birthdate

___________________________ _______________________________

Address Address

_OWOSSO, MI________________ __OWOSSO, MI _______________

City, State, Zip City, State, Zip

Other Relatives

Names, Addresses, Relationships:

PETE & LINDA TOTH (NANCY’S SISTER & HUSBAND)

GORDON & BARBARA SPRINGER (NANCY’S BROTHER & WIFE)

BETH ANDREWS (MARK’S SISTER)

JERRY & JANET ANDREWS (MARK’S BROTHER & WIFE)

Case Study


FINANCIAL INSTITUTIONS

Name of Financial Institution Account No. Ownership Amount

J/C/S

Checking

KENT COUNTY FEDERAL CU #467205-A J $3,100

________________________________________________________$_____________

________________________________________________________$_____________

Savings/Money Market

KENT COUNTY FEDERAL CU #467205-B J $ 6,800

FIRST NATIONAL BANK #22406 J $14,200

________________________________________________________$_____________

________________________________________________________$_____________

Certificates of Deposit

KENT COUNTY FEDERAL CU #467205-C C $50,000

________________________________________________________$_____________

________________________________________________________$_____________

TOTAL $74,100

Safety Deposit Box Number___________ Location__________________________



PERSONAL PROPERTY

Ownership

J/C/S

Value

AUTOMOBILES

(MAKE)

VOLVO XC70 J $28,000

LAND ROVER DISCOVERY J $25,000

VOLVO 240 C $6,000

HOUSEHOLD

FURNISHINGS

PIANO $5,000

FURNISHINGS $25,000

JEWELRY 18K YELLOW GOLD RING

W/.93 CT DIAMOND

S $4,800

CONCORD 14 CT. GOLD

QUARTZ WATCH

S $1,100

ROLEX WHITE GOLD C $4,500

COLLECTIONS KATE PALMER OIL PAINTINGS

(2)

J $1,500

OTHERS

(Describe)

MARTIN GUITAR C $4,000

MOTO GUZZI CALIFORNIA C $6,000

MOTO GUZZI QUOTA C $7,000

TOTAL $117,900.00

Case Study


Real Estate

PARCEL NO. 1

Address: 3864 HUMMINGBIRD DRIVE, GRAND RAPIDS, MI

Legal Description (PLEASE ATTACH COPY OF DEED AND OTHER INSTRUMENT OF

TITLE)

Ownership: _X__ Joint ___ You ___ Spouse

Name of Owner(s): MARK & NANCY ANDREWS

Date of Acquisition: SEPTEMBER 2004

Current Market Value: $410,000

Encumbrances (Name of Mortgagees, Lienors, etc.): ___________________________________

Amount of Debt: $280,000 Monthly Payments: $2,600

Have you conveyed any portion of the above real estate since March 1, 1997? NO

PARCEL NO. 2

Address: NORTHPORT, MI (VACANT LAND) 1 ACRE 300 FEET WATER FRONT


TITLE)

Ownership: ___ Joint _X You ___ Spouse

Name of Owner(s): MARK ANDREWS

Date of Acquisition: 1997

Current Market Value: $800,000


Amount of Debt: ______N/A__________ Monthly Payments: ________________




PARCEL NO. 3

Address: GRANDY COUNTY IOWA – 120 ACRES FARM LAND


TITLE)

Ownership: ___ Joint ___ You _X_ Spouse

Name of Owner(s): NANCY ANDREWS

Date of Acquisition: 2009 – INHERITED FROM GRANDMOTHER OWNS ½

INTEREST WITH SISTER

Current Market Value: $240,000 (NANCY’S ½)


Amount of Debt: ______N/A__________ Monthly Payments: _____________________


NOTE: RENTED – ANNUAL INCOME TO NANCY $7,000.

For each additional parcel of real estate attach additional sheets providing above

information.

Case Study


INVESTMENTS

Stocks and Mutual Funds

Investment Ownership

J/C/S

No. of Shares VALUE

VANGUARD MUTUAL FUNDS S $240,000

FIDELITY MUTUAL FUNDS C $410,000

TOTAL $650,000

Bonds and Treasury Notes

Investment Ownership

J/C/S

VALUE

SERIES EE BONDS

(COST: $4,250)

J (NANCY & MICHAEL) $4,360

SERIES EE BONDS

(COST $3,750)

J (MARK & MARK JR.) $3,800

$8,160.00

Other Investments

(Limited Partnerships, REIT, etc.)

Investment Ownership Value

J/C/S

____________________________________________________________$__________

____________________________________________________________$__________

____________________________________________________________$__________

____________________________________________________________$__________

TOTAL $ 658,160

For additional investments, please attach additional sheets.



BUSINESS INTERESTS

(Use Separate Sheet for Each Business Interest)

Name: KENT PHYSICIANS GROUP, P.C. Percentage Owned: 10%

Type of Entity:

Corporation __PC___ Partnership _____ Sole Proprietorship _____

Limited Liability Company _____

Your estimate of the fair market value of your interest: $100,000

Your Tax basis for your interest: $10,000

Do you have any plans to dispose of business interest(s) during your lifetime? If so,

please describe: NO

_______________________________________________________________________

_______________________________________________________________________

What are you wishes as to disposition of ownership after death:

1) Transfer to Family _____________________________________________________

2) Sale to Co-Owner of Business _YES_______________________________________

3) Sale to Key-Employee __________________________________________________

4) Other________________________________________________________________

Is there a buy/sell or redemption agreement? Yes ___X___ No ______

Please provide financial statements and tax returns for the previous year, a copy of any

buy/sell or redemption agreements, copies of stock certificates, partnership agreements

and LLC Operating Agreements.

Case Study


BUSINESS INTERESTS

(Use Separate Sheet for Each Business Interest)

Name: MED PROPERTIES, LLC Percentage Owned: 10%

Type of Entity:

Corporation _____ Partnership _____ Sole Proprietorship _____

Limited Liability Company __X__

Your estimate of the fair market value of your interest: $250,000

Your Tax basis for your interest: $48,000

Do you have any plans to dispose of business interest(s) during your lifetime? If so,

please describe: NO

_______________________________________________________________________

_______________________________________________________________________

What are you wishes as to disposition of ownership after death:

1) Transfer to Family _____________________________________________________

2) Sale to Co-Owner of Business _YES_______________________________________

3) Sale to Key-Employee __________________________________________________

4) Other________________________________________________________________

Is there a buy/sell or redemption agreement? Yes ___X___ No ______

Please provide financial statements and tax returns for the previous year, a copy of any

buy/sell or redemption agreements, copies of stock certificates, partnership agreements

and LLC Operating Agreements.

Please attach a separate sheet for each business entity.



RETIREMENT

If you have any interest in a 401(k), pension, profit sharing, stock bonus, self-employed

retirement plan, individual retirement account (traditional or Roth) or deferred compensation

plan, or any other similar type of benefits, complete the following:

Participant: NANCY

Employer/Sponsor of Plan: PIMCO FUNDS

Type of Plan: X IRA – Traditional IRA – Roth 401k 403B SEP

Deferred Compensation Defined Benefit Defined Contribution

Keogh Other

Custodian/Trustee/PlanAdministrator: PIMCO

Value: $23,572

Primary Beneficiary: MARK

Contingent Beneficiary: MARTHA SPRINGER

It is important that you provide a copy of the plan document, or summary plan

description. We must determine what type of payout options are available, does the

plan allow for minimum distributions and whether a trust can be named as

beneficiary of the plan.

**PLEASE PROVIDE A COPY OF YOUR MOST RECENT PLAN STATEMENT

OF ACCOUNT.

Participant: MARK

Employer/Sponsor of Plan: MTL EQUITY PRODUCTS

Type of Plan: X IRA – Traditional IRA – Roth 401k 403B SEP


Keogh Other

Custodian/Trustee/PlanAdministrator: MTL

Value: $26,069

Primary Beneficiary: NANCY

Contingent Beneficiary: NONE






OF ACCOUNT.

Case Study


If you have any interest in a 401(k), pension, profit sharing, stock bonus, self-employed

retirement plan, individual retirement account (traditional or Roth) or deferred compensation

plan, or any other similar type of benefits, complete the following:

Participant: MARK

Employer/Sponsor of Plan: YORK HOSPITAL GROUP

Type of Plan: IRA – Traditional IRA – Roth X 401k 403B SEP


Keogh Other

Custodian/Trustee/PlanAdministrator: FIFTH THIRD BANK

Value: $643,000

Primary Beneficiary: NANCY

Contingent Beneficiary: CHILDREN






OF ACCOUNT.



LIFE INSURANCE PROVIDED BY EMPLOYER

Policy #1 Policy #2

Company: CNA

Policy #: G-490

Type: GROUP

Insured: MARK

Owner: MARK

Beneficiary: NANCY

Contingent

Beneficiary:

CHILDREN

Face Value: $50,000

Loan Amount: 0

LIFE INSURANCE OWNED BY YOU OR SPOUSE

(attach additional pages if necessary)

Policy #1 Policy #2

Company: MTL Insurance Co. USAA

Policy #: 6772-A 46AL22

Type: 10-YEAR TERM LIFE BEGAN 2012 ANNUAL

RENEWABLE

Insured: MARK MARK

Owner: MARK MARK

Beneficiary: NANCY NANCY

Contingent

Beneficiary:

CHILDREN CHILDREN

Face Value: $1 MILLION $197,989

Loan Amount: 0 0

Annual

Premium

$1,250 $624

Case Study


LIFE INSURANCE OWNDED BY YOU OR SPOUSE

Policy #3 Policy #4

Company: MTL INSURANCE CO.

Policy #: 86791

Type: WHOLE LIFE

Insured: NANCY

Owner: NANCY

Beneficiary: MARK

Contingent

Beneficiary:

LINDA TOTH

Face Value: $334,211

Current Cash

Surrender

Value

$23,432 (DIVIDENDS BUY

ADDITIONAL PAID UP

INSURANCE)

Amount of

Loan:

$21,308

Annual

Premium:

$2,650

Annuities

Policy #1 Policy #2

Company: HARTFORD

Policy #: 74A621-14

Type: DEFERRED VARIABLE

Annuitant: MARK

Owner: MARK

Beneficiary: NANCY

Contingent

Beneficiary:

CHILDREN

Current Value: $229,310

Cost Basis $100,000



OTHER ASSETS

Please provide information on any other assets, including but not limited to Notes, Accounts

Receivable, Mortgages, Land Contracts, Patent and/or Copy Rights, Oil and Gas Rights, Mineral

Rights, interest in any Trust, any prospective gifts and prospective inheritances and please include

description, value, and any other relevant information.

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

MONTHLY INCOME

Client Spouse

Employment: $__18,000______________________$________________________________

Retirement

Plan: $______________________________$________________________________

Social

Security: $______________________________$________________________________

Other

(Explain): $______________________________$_7,000 (annual)___________________

LIABILITIES

(Not Previously Listed)

Creditor Secured By Due Date Current Balance

Secured by Due Date Current Balance

KENT COUNTY FCU 12,471

FIFTH THIRD $12,000

FIFTH THIRD $50,000

US DEPT OF EDUCATION $4,954

VOLVO FINANCE $19,500

Case Study


PLANNING AND DISTRIBUTION OBJECTIVES

1. Upon your death, how and to whom do you want your assets distributed?

SPOUSE 100%

2. Are there any people who should receive particular items? If so:

Name Item

MICHAEL_____________________ _MARTIN GUITAR___________________

MARK, JR.____________________ _ROLEX WATCH_____________________

_______________________________ _____________________________________

3. If you and your spouse die prematurely leaving minor children, should your

children receive property at:

__________ age of majority (18); or

____X______ held in trust and distributed at age _____?_____.

4. Do you want to make gifts to any charities? If so: (AFTER SECOND TO DIE)

Name and Address of Charities Amount of Gift

KENT CO. HUMANE SOCIETY $10,000

THE NATURE CONSERVANCY $10,000

5. If you die first and none of your children are living at the time of your spouse's death,

do you want your estate to go to: Your Family ___________

Spouse's Family? ___________ Elsewhere?_______________

Explain_______________________________________________________________

_______________________________________________________________________

6. If your estate is required to pay Federal Estate Tax, do you want the tax paid from

____?____The Residuary Estate ____?____Apportioned among all beneficiaries?



Wills

Personal Representative. Person responsible for administering your estate and probate

proceedings.

Name Address

1st Choice: __SPOUSE_______________ _________________________________

_________________________________

2nd Choice: ___DON’T KNOW________ _________________________________

_________________________________

Guardian. Person responsible for the well-being and daily care of your minor children,

until they attain age 18, if both parents are deceased.

Name Address

1st Choice: ____LINDA TOTH________ _________________________________

_________________________________

2nd Choice: ___BETH ANDREWS_____ _________________________________

_________________________________

Conservator. Person who will manage any minor child's finances and property, until

that child attains age 18, if both parents are deceased.

Name Address

1st Choice: _____LINDA TOTH_______ _________________________________

_________________________________

2nd Choice: ____BETH ANDREWS____ _________________________________

_________________________________

Case Study


Trustee. Person or bank that will manage your assets in a trust and distribute assets after

your death.

Name Address

1st Choice: ____DON’T KNOW_______ _________________________________

_________________________________

2nd Choice: ________________________ _________________________________

_________________________________



Financial Power of Attorney

Agent. Person responsible for financial decisions during your lifetime.

Name Address

1st Choice: ______SPOUSE___________ _________________________________

_________________________________

2nd Choice: MARK: JERRY ANDREWS

NANCY: GORDON SPRINGER

Health Care Power of Attorney

Agent. Person responsible for health care decisions during your lifetime, if you are

unable.

Name Address

1st Choice: _____SPOUSE____________ _________________________________

_________________________________

2nd Choice: MARK: BETH ANDREWS

NANCY: LINDA TOTH

case study and group questions for drafting an … · 2019-08-06 · grand rapids, mi 48892 b. mark...

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