Valerie & Brian

Valerie and Brian have met with you yesterday for their first appointment to seek financial advice for their situation.

Some of the key estate planning issues arising from the data collection process during the meeting are as follows:

• Brian is age 75 and has 4 adult children from a previous marriage
• Valerie is 65 and has 3 adult children from her first marriage
• Valerie and Brian own their home as joint tenants
• They have not issued Power of Attorney to anyone
• They each made a will about ten years ago which benefits each other however they are unsure as to what their wills state should happen if the other predeceases them
• Their primary assets are the house and around $600,000 of investment capital

Brian has been increasingly unwell with emphysema from his years as a smoker and has been hospitalised several times in recent years. Valerie said she is otherwise well, although she mentioned she has a heart pacemaker. At the first meeting, you asked them why the house had been bought as joint tenants? They didnt understand the significance of the question so you explained it to them.

The meeting ended well with your commitment to prepare a Statement of Advice and meet with them again to present it one month from now.

The next day Valerie called you when Brian was outside gardening. She opened the phone conversation by saying she wants to be sure her three children receive her share of the assets that she and Brian own. She went on to say that when their relationship commenced about 15 years earlier, Brian brought just $50,000 or so of investment capital to the relationship. Valerie also mentioned that the money from their current home had come from the sale of the house which she and her first husband (deceased) owned. In short, your explanation of the house ownership had kept her awake with worry last night.

Q1. You have had a long discussion with the couple. What concerns you hold for the clients situation and outline how you would look to address them to better achieve the clients wishes.

(10 marks)

Q2. It is important that the process and client meetings are well planned documented. It is also critical that sufficient information and evidence is gathered. With a good plan, it is possible that the information which comes to light the day after the first meeting, might have been gained during that first meeting? Discuss what should have happened during the first meeting?

(10 marks)

Q3. As you might have come across, one of the clients phones you the day after the meeting what liability might have arisen for you and your licensee if she had not phoned you with the information; where might the legal liability have arisen from?

(10 marks)

Q4. While talking to a friend who works for Public Truste, Valerie & Brian were told that everyone should review their Will frequently. What are some of the reasons why a Will should be reviewed?