A Writing Assignment for FINA 448 – Estate Planning                 04/11/05

     

 

      Consider the following situation:  Mary Poppins is a 70 year-old widow whose husband left her with an

      adequate inheritance consisting of a home, a portfolio of financial assets and a small pension for life.  She

      has approached you (a well respected estate planner) and asked that you “take over” her financial affairs

      because it would be in everyone’s best interest.  For your trouble, she offers to pay you a flat hourly rate, a

      modest commission on the “vehicles” you select to better manage her financial affairs plus reimbursement

      for any additional associated expenses.  Furthermore, she wants her son (a licensed insurance and stock

      broker) to handle the associated financial transactions.  Unknown to Mary, her son has a relationship with

      you in that he pays you a referral fee for business sent his way through your recommendations.  Also,

      Mary has two daughters.  Both are unaware that Mary has approached you and they are generally

      uninformed of Mary’s financial affairs.

 

a)      Please discuss how the ACDs of estate planning relate to the above situation.  For each principle, first describe the principle, then discuss how it applies to the situation. 

                       

                        i) A _ _ _ _ _ _ _ _ _ _ _

 

 

 

 

 

 

 

 

                        ii) C _ _ _ _ _ _ _ _ _ _ _

 

 

 

 

 

 

 

 

 

 

                        iii) D _ _ _ _ _ _ _ _ _ _ _

 

 

 

 

 

 

 

 

 

 

 

 

 

b)      How do the two basic obligations of the estate planner each relate to the above situation?

 

                        i)

 

 

 

 

 

 

 

 

 

 

 

                        ii)

 

 

 

 

 

 

 

 

 

 

 

 

c)      Please describe and briefly discuss two issues of confidentiality within the context of the situation above.

 

                        i)

 

 

 

 

 

 

 

 

 

                        ii)

 

 

 

 

 

 

 

 

 

 

 

d)      Please describe and briefly discuss two issues that concern compensation in the situation above.

 

                        i)

 

 

 

 

 

 

 

 

 

 

 

                        ii)

 

           

 

 

 

 

 

 

 

 

           

            e)  Please describe and discuss potential conflicts of interest that are present in the above situation.