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Well , I’ll Get Around to it. WHO NEEDS AN ESTATE PLAN?. EVERYONE!. PURPOSE OF PLANNING. Lifetime issues Family issues Wealth protection Tax avoidance. WHAT DOES AN ESTATE PLAN INCLUDE?. Will Statement of Disposition of Tangible Personal Property Revocable Trust - PowerPoint PPT Presentation
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Well , I’ll Get Well , I’ll Get Around to it . . .Around to it . . .
WHO NEEDS AN ESTATE PLAN?
EVERYONE!
PURPOSE OF PLANNING
Lifetime issues
Family issues
Wealth protection
Tax avoidance
WHAT DOES AN ESTATE PLAN INCLUDE?
Will Statement of
Disposition of Tangible Personal Property
Revocable Trust Life Insurance/
Irrevocable Trust Durable General
Power of Attorney
Durable Health Care Power of Attorney
Organ Donation / Cremation and Funeral Instructions
Beneficiary Designations
Re-titling of Assets
WHERE THERE IS NO WILL
No named beneficiaries
No named guardian
No named personal representative
No testamentary trust
THE WILL
The will is the instrument that directs how your assets are to be distributed after your death.
Personal representatives
Q-tip trust
Family trust
GUARDIANS
For people with minor children, this is the most important reason for establishing an estate plan.
REVOCABLE OR “LIVING TRUST”
Trust Agreement
Pour-Over Will
WILL VS. REVOCABLE TRUST
Tax planning
Organize now or later
Administration
BENEFICIARIES
THIS IS A BIG ISSUE Children
Charities
Other family members
IF YOU HAVE A REVOCABLE TRUST . . .
Is it funded?
GENERAL DURABLE POWER OF ATTORNEY
This document handles your financial matters.
Date of Document
When does it become effective
GENERAL DURABLE HEALTH CARE POWER OF ATTORNEY You appoint someone to make health care
decisions for you when you are unable
Includes the “living will”
Cremation/burial instruction
STATEMENT OF DISPOSITION OF TANGIBLE PERSONAL PROPERTY
BENEFICIARY DESIGNATIONS
Properly designating beneficiaries of Retirement Plans at death is an important part of the estate planning process
For many, this is the largest asset
Children as beneficiaries
LIFE INSURANCE
Liquidity – taxes, succession planning
Creating estates
Replace income
A lot of insurance
Not enough insurance
IRREVOCABLE TRUSTS for Life Insurance
TITLING OF ASSETS
TENANTS IN COMMON
JOINT TENANTS
BENEFICIARY DESIGNATIONS
IRAs
LIFE INSURANCE
401(k)s
WHAT IS A PROBATE?
The purpose of probate is to transfer assets and deal with the creditors of the decedent.
DIVORCE
Ownership of real property by a husband and a wife as joint tenants changes to ownership as tenants in common if the couple is divorced. After a divorce if one marriage partner dies before changing the title to the property, the decedent’s interest in the property automatically passes to his or her heirs rather than to the former spouse.
DIVORCE (continued)
A divorce terminates the right of a former spouse to inherit under the will.
A divorce or dissolution of marriage revokes bequests and devises to a former spouse – but not the will itself.
A divorce revokes the appointment of the former spouse as an executor or trustee under the will.
Watch out for insurance beneficiaries!
MINOR CHILDREN
Appointment of a guardian
Establishment of a trust – minor children cannot inherit outright
DISABLED CHILD
Supplemental Needs Trust
THE FIRST RULE IN ESTATE TAX PLANNING:
Fully utilize the Unified Credit
UNIFIED CREDIT
2014 $5,250,000
ENTITY CHOICES…
LIMITING LIABILITY
Entity Choice
Liability insurance
ENTITIES THAT LIMIT LIABILITY
Corporations
Limited Liability Companies
LIABILITY INSURANCE
• Look at your umbrella
• Pays for the lawyer
FACTORS TO CONSIDER IN CHOOSING ENTITY TYPE
Tax considerations
Operational flexibility/compliance
Ease of liquidity
Future fundings
C CORPORATIONS• annual compliance
• double taxation
• most familiarity
S CORP
LLCs• Flow through
• fewer formalities/operational flexibility
• operating agreement
• managers
• transfer of appreciable assets to members
FOR MORE INFORMATION REGARDING PLANNING, CONTACT:
Cristy J. Carbón-Gaul
505-899-5696
