Thursday, April 12, 2007

"Survey Says...": The Answers

"How savvy are you about the views or status of Americans on matters of taxes and their personal & estate planning?"

That was the question posed in my previous posting.

Did you take The Test -- consisting of twelve multiple-choice questions, which I drew from the results of recent national surveys -- as set forth in "Survey Says...": The Test?

To determine the correct answers, I relied upon the reported results of these recent national polls:

Here are the correct answers (subject to a disclaimer similar to the one quoted at the end of this posting), determined according to the survey results, as explained in excerpts from the press releases. (I highlighted some text for emphasis.)

Question #1: What percentage of U.S. adults believe that the federal tax system is somewhat or very complex?
A. 58%
B. 78%
C. 83%
D. 92%

The answer is: C.

"An overwhelming 83 percent of U.S. adults believe the current federal income tax is somewhat or very complex. Nearly six in ten (58 percent) consider the amount of federal income tax they have to pay as too high. In addition, 78 percent believe the federal tax system needs major changes or a complete overhaul."

Source: 2007 Tax Survey.

Question #2: Which federal tax is considered to be the least fair?
A. Estate tax
B. Gasoline tax
C. Income tax
D. Payroll tax

The answer is: A.

"At the federal level, estate taxes edged out income, payroll and other taxes to be labeled the least fair. On a scale from one to five, with five being the least fair, estate taxes were rated higher (3.9) than federal gas taxes (3.8), income taxes (3.5) and payroll taxes (3.3). Forty-two percent of U.S. adults believe estate taxes are 'not at all fair'."


Source: 2007 Tax Survey.

Question #3: Which state & local taxes are considered to be the least fair?
A. Gasoline tax
B. Income tax
C. Motor vehicle tax
D. Property tax

The answer is: A.


"At the state and local level, the least fair tax was the gas tax (3.8). It was followed closely by property taxes (3.6), motor vehicle taxes (3.5) and state income taxes (3.4)."


Source: 2007 Tax Survey.

Question #4: In 2007, what percentage of people favor repeal of the federal estate tax?
A. 32%
B. 42%
C. 58%
D. 66%

The answer is: D.

"The number of people who favor estate tax repeal was 66 percent in 2007, down slightly from 68 percent in 2006. Less than one in five opposes estate tax repeal."


Source: 2007 Tax Survey.

Question #5: What percentage of adult Americans do not have a Will?
A. 45%
B. 55%
C. 65%
D. 75%

The answer is: B.

"[O]ver half (55 percent) of all adult Americans do not have a will, a new survey shows, a percent that has remained virtually unchanged over the past three years."


Source: 2007 Estate Planning Survey

Question #6: Which group of American citizens has the lowest percentage of adults who have a Will?
A. African-Americans
B. Companion Animals
C. Hispanic Americans
D. White Americans

The answer is: C.

"Among non-white adults, the lack of wills is even more pronounced. Only one in three African American adults (32 percent) and one in four Hispanic American adults (26 percent) have wills, compared to more than half (52 percent) of white American adults."


Source: 2007 Estate Planning Survey.


Note: If you chose B., you failed to read the question completely. It is true that "companion animals", a/k/a "pets", do indeed have the lowest percentage among the listed groups who have executed estate planning documents (we don't need a survey to tell us that). But, they are not "citizens".

Question #7: What percentage of American adults have a "living will" (also known as a medical directive) document?
A. 21%
B. 31%
C. 41%
D. 51%

The answer is: C.

"Living wills (also known as medical directives) have jumped in popularity since 2004. Two in five adults (41 percent) now have living wills in place, a full ten percent more than those who had one just three years ago. Living wills dictate individuals’ directions for receiving life-sustaining medical intervention in the event of grave illness or injury."


Source: 2007 Estate Planning Survey

Question #8: What percentage of Americans adults have a health care power of attorney document?
A. 27%
B. 38%
C. 45%
D. 55%

The answer is: B.

"Additionally, two in five (38 percent) American adults report assigning a power of attorney for healthcare purposes, compared to 27 percent in 2004. A power of attorney for healthcare legally delegates authority to another to make medical decisions for that individual, if he or she is incapacitated."


Source: 2007 Estate Planning Survey.

Question #9: What is the reason most cited by Americans who do not have any elements of an estate plan in place?
A. Cost is High -- They believe it is expensive to hire professional advisors.
B. Ignorance is Bliss -- They don't want to think about being incapacitated or dying.
C. Lack of Need -- They perceive their assets insufficient to justify advance planning.
D. Starting is Difficult -- They don't know who should prepare such plans or documents.

The answer is: C.

"Ignorance is bliss: One in ten (10 percent) American adults who do not have any elements of an estate plan say it’s because they don’t want to think about dying or becoming incapacitated.

"Where to begin?: Similarly, nearly one in ten (9 percent) adults say they don’t have an estate plan in place because they don’t know who to talk to about creating such documents. This percentage nearly doubled from 2004 (5 percent).

"But I don’t need a will: Nearly one in four (24 percent) of adults say their biggest reason for not having an estate plan is a lack of sufficient assets. This was also the top reason cited in the 2004 survey (21 percent)."


Source: 2007 Estate Planning Survey.
Question #10: What is the biggest source for legal information utilized by consumers regarding estate planning matters?
A. Books & articles
B. Family & friends
C. Internet
D. Lawyers

The answer is: D. (I think, I hope); Otherwise B.

Note: This answer could be disputed for technical reasons with reference to the 2006 Estate Planning Survey. Those results were based upon an assumption -- which is the answer -- in the way the question was posed to the individuals polled. See: U.S. Adults More Likely to Turn to the Web for Legal Information, New Survey from Lawyers.com Reveals (PDF).

Those participants were asked, "Besides a lawyer, where do you obtain advice and information regarding legal matters?" Given the answer to the Question #11 below, I think that D. would be -- and always should be -- the correct answer. However, I would give credit -- based on a strict limitation in answering the question to survey results only -- to an answer of B.

"Besides lawyers, traditional sources of legal advice, such as friends and family, are on the decline today as consumers increasingly turn to widely-available online resources to become better informed about their legal rights and responsibilities. 'The challenge is knowing what information is trustworthy,' said attorney Alan Kopit, legal editor of lawyers.com. 'Consumers need to look to reputable web sites and investigate the source of legal information they find online before they rely on it'."

"Other than family and friends (31%), and aside from asking a lawyer, the Internet [27%] is now the single biggest source for legal information, outpacing books and newspaper/magazine articles, which came in at just 12%. In fact, the percentage of consumers who rely on the Internet for legal counsel has nearly tripled in recent years (10% in 2000 vs. 27% in 2006), while the percentage that rely on friends and family has declined by about a third (49% in 2000 vs. 31% in 2006)."

Source: 2007 Estate Planning Survey.
Question #11: What percentage of U.S. adult Americans have utilized a lawyer at least once in their lives?
A. 46%
B. 51%
C. 65%
D. 68%

The answer is: C.

"Two out of three U.S. adults today have used a lawyer at least once in their lives, about the same percent as in 2000 (65% in 2006 vs. 68% in 2000). As was the case six years ago, the single biggest reason lawyers are hired today is to handle estate planning, like creating wills. Forty-six percent of those U.S. adults who have hired a lawyer say that is what drove them there, a similar percent as in 2000 (51%)."


Source: 2007 Estate Planning Survey.

Question #12: What percentage of Americans said, in 2005, that they crossed a border to shop in a neighboring area in part because it meant that they would pay less in taxes?
A. 14%
B. 19%
C. 25%
D. 28%

The answer is: A.

"28 percent said they had bought something over the Internet rather than from a local store, 25 percent said they gave more to charity, and 14 percent said they crossed a border to shop in a neighboring area with lower taxes in part because it meant that they would pay less in taxes."

Source: 2005 Tax Survey.
* * *

Disclaimer: "All questions used on "Whad'ya Know?" have been painstakingly researched, although the answers have not. Ambiguous, misleading, or poorly worded questions are par for the course. Listeners who are sticklers for the truth should get their own shows."


-- Michael Feldman, Host, "Whad'ya Know?" radio show on National Public Radio

* * *
Update: 04/12/07:

Well, call me "Michael Feldman", indeed. I just received this email from someone who took The Test seriously. He scrutinized the form of the question formerly posed in Question #6, which had been stated "Which group of American citizens has the lowest percentage of adults who do not have a Will?":
I enjoyed your Test and appreciate all the efforts you put in to keeping the rest of us informed.

As to question #6, maybe you mentioned this and I did not see it, but in addition to the trick part about the animals, did you not trick yourself by misstating the question.

If Hispanics have the lowest percentage of adults with Wills (26%), then the question should use either "highest" for "lowest" OR use "not" or not.

Keep up the good work.

James Jacquette, Esq., Ft. Washington, PA
Well, James, I did trick myself. So (it being my "show"), I rewrote & just reposted the question by deleting "DO NOT" in the last phrase. It now reads, both in the prior & this present post: "Which group of American citizens has the lowest percentage of adults who have a Will?"

There's one more reason to be an "optimist" always, even in framing questions -- it avoids any use of the double-negative.

Update: 04/12/07:

Professor Gerry Beyer, author of the Wills, Trusts & Estates Law Prof Blog, noted the "Test" in his posting entitled "What Lay Individuals Really Think About Estate Planning and Related Topics" (04/11/07), and also the "Answers" in his follow-up posting entitled Answers to "What Lay Individuals Really Think About Estate Planning and Related Topics" (04/12/07).

Due to professional confidentiality (and a whole lot of sympathy), I will not reveal his score.

This post regarding "The Answers" was also was noted, with some further comments, by the The Dreams of a Solo blog in an entry entitled "Estate Planning Survey Answers".

Update: 04/14/07:

This post was noted by attorney Michael W. Troutman, who authors the Lexington Lawyers blog, on April 14, 2007. See: "Intriguing statistics regarding estate planning" -- "I found this post by Pennsylvania attorney, Neil Hendershot, to be give an intriguing insight into how people approach (or fail to approach) estate planning." He then comments specifically on the answer to Question #9, from his experience in Kentucky.

Posted by Unknown on Thursday, April 12, 2007

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