Estate Planning

Protecting your family’s future

Definitions

Your estate consists of what you own at your death

Your estate plan is a blueprint of how you want your financial and personal affairs handled at your death

Goals of Estate Planning

Control To protect your family’s future

– Financially– Emotionally

Estate Planning involves making decisions about

Your property People who depend on you for support Possible future incompetency Long term nursing care Health care you may or may not want Funeral, cremation, or memorial

arrangements

Key documents in an estate plan

Will Durable power of attorney Health care power of attorney Living will Trust

Wills

Witnessed will Holographic will

Anyone who dies without a will is subject to the law of intestate succession

Estate planning issues

Things to think through before consulting a lawyer Who gets your property Who will serve as your personal representative Who will raise your minor children Will your estate have a tax problem Will a minor inherit your property Is a trust right for you

Who gets your property

Give this some time and thought Inventory assets and determine ownership How do you want your property divided What happens if a beneficiary dies before

you What is your spouses share

Type of property ownership

Joint tenants with right of survivorship Tenants by entirety Tenants in common Sole ownership

Choosing a personal representative

Three names for the same person Executor-the person you name in your will Administrator-court named Personal representative-includes both the

above

Duties of Personal Representative

Collects and inventories property Distributes property according to will Pays bills and collects debts Files tax returns

Choose executor wisely

Some factors to consider Ability to do the job Convenience Willingness to do the job Ability to keep peace with family members Legal requirements

Who will raise your minor children?

A minor is a child under 18 years of age Use your will to recommend a guardian for

minor children

Will your estate have a tax problem?

A little planning can help the problem

Estate includes the fair market value of all property owned at the date of death

Cash Real estate Stocks & bonds

Federal Estate Taxes

2009 rate is 45% Unified credit exempts the first $3.5M In 2010, no estate taxes will be collected In 2011, only $1M exempt

If your estate is greater than this consider transferring ownership by gifts, either cash or life insurance

Avoiding Taxes?

Give up to $13,000 per calendar year per recipient without paying gift tax.

Set up a trust -AB—in trust for children, but spouse can use it -QTIP—postpone taxes until second spouse dies-charitable trust

Families and Inheritance

Inheritance is not simply an economic and legal issue.

Complex emotional and family relationships impact decision making.

Inheritance decisions involve economic and emotional consequences. They can enhance or destroy family unity.

Plan Early—And Often

Make sure your wishes are carried out by distributing property yourself—give it to who you want now.

If you don’t give it now, leave clear instructions on what you want to happen.