Why is this Attorney Asking for all my Personal Information?

     When meeting a potential estate-planning client for the first time, it is a normal practice for an attorney to request substantial amounts of personal information prior to agreeing to represent the potential client. This information often includes details about the client’s employment, the client's children and their spouses, real property holdings, bank accounts, investment accounts, retirement benefits, and life insurance. Prior to the first meeting with a client at our office, we request the client complete checklist that requests this information, and ask the client to consider whom they might designate to act on their behalf for administrative purposes if something should happen to them. Occasionally a client will complete the checklist providing us with detailed information, but more often, the client has not taken the time to collect the needed information. Today's blog addresses the question of why an attorney requires so much information prior to an initial consultation and why a potential client should not be concerned about providing the attorney with that information.

     Contrary to what some potential clients think, the purpose of having full asset information is not to determine how much a client can afford to pay for estate planning. Generally, estate planning attorneys need much of the information they request from a potential client for the initial meeting because it is difficult, if not impossible, to analyze a client's situation in a vacuum. With full information, and input from the client during the meeting, a proposed estate plan can be crafted that meets the client's needs. This will save the client both time and money. As most professionals know, it is also a good idea to get as much information immediately as possible in order that planning is not delayed because clients "get busy with life" and delay providing information needed to complete the planning process. The sooner information is available and client decisions are made, the sooner documents can be drafted and executed for protection of the client and the loved ones. In addition to the documents themselves, a major goal of the estate planning process is ensuring the smooth transition of the client’s assets to their loved ones with as little delay as possible. When a client fails to inform their estate planning attorney of the full extent of those assets, it becomes impossible to achieve this goal. During the initial consultation with a potential client, the attorney is attempting to educate the client regarding the goals of estate planning and the purpose of the assorted documents involved, while ensuring that the client has provided the attorney with sufficient information to implement a plan that achieves the client's goals. Let us consider some of the information requested by an attorney and the purpose behind the request.

• Information about Children and Children's Spouses: Frequently children are primary beneficiaries of a client's estate plan, therefore it is important to know the ages of those children, their marital status, whether there are any concerns about the stability of that marriage, whether those children have any children of their own, and whether the client has any concerns regarding their children's ability to manage assets. This information allows the attorney to make recommendations regarding distributions to the children that take advantage of the benefits of a living trust in order to achieve the client’s goals
• Property holdings: Property holdings can substantially increase the value of an estate while at the same time presenting a variety of liability and credit protection issues. By knowing the full extent of a client's property, the attorney is able to determine if more than one type of trust is needed and whether it is appropriate to fund that property to a client’s trust. It may be more beneficial to establish an L.L.C. to act as a holding company for the property, thus limiting personal liability in the event an accident occurs on the property.
• Bank and Investment Accounts: This information is important both because it is the most transparent valuation of a client’s assets and because such accounts are representative of the client’s level of planning. By evaluating the distribution of a client’s assets between such accounts, an estate planning attorney is able to evaluate the potential for future developments that may necessitate more complex planning.
• Retirement Benefits: Retirement benefits are often a large part of a client's assets, and it is especially important for estate planning attorney to have an awareness of the retirement benefits, because of the substantial regulation that exists surrounding the inheritance of such benefits. By providing the estate planning attorney with the complete scope of such assets, it is possible to ensure that potential beneficiaries can take advantage of more beneficial distribution provisions as well as ensure that assets are available over a longer period for beneficiaries who may be unable to manage an inheritance effectively.

     Looking at the list of information we have discussed it is understandable that a client may be reluctant to provide a relative stranger with so much detailed personal information. It is important to know however, that by agreeing to meet with a potential client for a consultation, whether paid or free, and attorney creates and attorney-client relationship that provides the potential client with attorney-client privilege. This attorney-client privilege creates a fiduciary duty for the attorney and limits the information and attorney is legally allowed to provide to others regarding the client. If an attorney violates this fiduciary duty or inappropriately provides information to other parties without a client's approval, the potential client has substantial legal remedies against the attorney. Due to the attorney-client relationship created during the initial consultation, attorneys go to great lengths to ensure that they do not retain extraneous information regarding potential clients who do not engage their services, including sending follow-up letters to those potential clients who opt not to retain their services returning any personal information to their possession.

     An attorney's goal is to provide the best service for clients. Having as much information as possible about a client's situation makes meeting that goal easier. With a better understanding of why an attorney requests information, it becomes much easier for a potential client to disclose that information in a timely manner, thus ensuring that the attorney is able to craft an estate plan that takes into account both the scope of the client assets and the state of potential beneficiaries in order to achieve the client's goals for their assets. As with many other matters, an experienced estate-planning attorney is willing to answer a potential client's questions regarding the information the attorney is requesting. While it is important for an attorney to have adequate information, each potential client must feel comfortable with providing information and should never feel pressured to do so. The client should recognize, however, that without sufficient information the attorney will be unable to provide proper services and may refuse to represent a client who is overly reluctant to provide needed information.