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Educational seminar overview of the estate planning process and it's advantages over probate
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The Truth About Estate Planning
Presented by Suzanne M. GravesAttorney and Counsellor At Law
Estate Planning Overview
Most Estate PlansJust Don’t Work!
Estate Planning Overview
Smokescreens
• Will vs. Trust• Avoid Probate• Hourly vs. Percentage Billing• Funded vs. Unfunded Trust
Estate Planning Overview
• Personalized Counselling• Proper Asset Ownership• Formal Review Process• Controlled Transfer Process
• What to Do• How to Do It• How to Pay for It
Keys to an Effective Estate Plan
Estate Planning Overview
Definition of Estate Planning
I Want to Control My Property While I’m Alive and Well
Plan for Me and My Loved Ones if I Become Disabled
Estate Planning Overview
Definition of Estate Planning
Give What I Have• To Whom I Want• When I Want• The Way I Want
All While Assuring My Wisdom is Transferred Along with My Wealth
Estate Planning Overview
The Planning Pyramid™
• Focuses on Client Goals
• Solutions Make Planning Easier
• Exposes Traditional Planning as “Upside Down”
Estate Planning Overview
Contrasting the Traditional and Truth Approaches
• The Debate Has Centered on Documents
• “It’s Not About Documents, It’s About RESULTS!”
Estate Planning Overview
TraditionalDocuments Used
Will Trust (Testamentary) Powers of Attorney
– Financial– Health Care
Living Will
Living Trust
Documents Used
Will (Pour-over) Trust (Living) Powers of Attorney
– Financial– Health Care
Living Will
Estate Planning OverviewComparison
Traditional vs. Approach
Client Care™
Estate Planning Overview
Client Care Process
Meet with Attorney to Develop Goals
Design Plan
Sign Plan
Fund Trust
Successor Training Workshops
Other Educational Workshops for Client
Annual Updating of Trust
Estate Planning Overview
Three Step Strategy™• DEVELOP Your Plan with Counselling Oriented Planning Partners• COMMIT Yourself and Your Family to a
Continuing Maintenance and Education
Program • SECURE Appropriate Assistance for You and Your Family to Transfer Your Wisdom along With Your Wealth
Estate Planning Overview
Three Types of Estate Plans
• Married Couple Under $2,000,000
• Married Couple Over $2,000,000
• Unmarried Individual
Estate Planning Overview
Personal Planning Goals
• Catastrophic Illness Protection• Remarriage Protection• Creditor Protection• Divorce Protection• Values Promotion
Counselling Oriented Planning Partners
How Do YOU Spell Counselling?
Counselling Oriented Attorney
Counselling vs. Word Processing
Counselling vs. Communication
Communication
No or Low Additional Cost
Plain English
Use of Stories
Estate Planning Overview
Three Step Strategy™• DEVELOP Your Plan with Counselling Oriented Planning Partners• COMMIT Yourself and Your Family to a
Continuing Maintenance and Education
Program • SECURE Appropriate Assistance for You and Your Family to Transfer Your Wisdom along With Your Wealth
Estate Planning Overview
Three Types of Change An Estate Plan Faces
• Changes in Your Personal Situation
• Personal• Financial
Estate Planning Overview
Three Types of Change An Estate Plan Faces
• Changes in the Legal Environment
• Tax• Non-Tax (Personal Protections)
Estate Planning Overview
Three Types of Change An Estate Plan Faces
• Changes in Your Attorney’s Experience• Changes in Your OWN Experience
• Static vs. Continuous Improvement?
• Add Earned and Learned Wisdom!
Estate Planning Overview
Three Step Strategy™• DEVELOP Your Plan with Counselling Oriented Planning Partners• COMMIT Yourself and Your Family to a
Continuing Maintenance and Education
Program • SECURE Appropriate Assistance for You and Your Family to Transfer Your Wisdom along With Your Wealth
“Appropriate Assistance”
Full Disclosure
Controlled Cost
True Peace of Mind
“Appropriate Assistance”
Are We The Ones?
• Age • Experience• Personality• Values
Controlled Cost
Successor Trustees Hire Assistance
Proactive Engagement Approach
Full Funding
Proactive Trustee (&Beneficiary) Training
Estate Planning Overview
Three Factors of Overall Cost
• The Cost of the Documents
• The Cost of Updating (Or Failing to Update)
• The Cost After Death• Transfer of Assets• Death Tax Return Preparation
Estate Planning Overview
“The Rest” of the Fees
• Trust Settlement Administration• Disability• Death
• Death Tax Return Preparation
• Probate Services
Estate Planning OverviewFees
Traditional Probate
– 2 to 3% “Standard” Living Trust Planning
– 1.5 to 2.5% Client Care Process™
– .5 to 1%
Without Counselling Approach• Reduced Initial Planning Options
• Outdated Plans Technical Personal
• Little Education For Yourself For Your Family
Estate Planning Overview
EVERYTHING IN ESTATE PLANNING COMES DOWN TO TITLE!
• Tax Savings
• Personal Protections• Catastrophic Illness Protection• Catastrophic Creditor Protection• Remarriage Protection• Divorce Protection
Estate Planning Overview
Three Types of Title
• Individual Name• Joint Name• Contract
• Beneficiary Designation• Trust
Estate Planning Overview
INDIVIDUAL NAME
equals
WILL
equals
PROBATE!
Estate Planning Options
• No Documents (Joint Tenancy)• Simple Will & Power of Attorney• Will with Testamentary Trust & Power of Attorney• Bare Bones Living Trust• Client Care Process™
Estate Planning Overview
Estate Planning Overview
Estate Planning Challenges
• Mental Disability
• Asset Transfer Upon Death
• Taxation
• Personal Planning Goals
Mental Disability Planning
Guardianship
• Loss of Control (to Judge)
• When I’m Disabled• Who Takes over Control (Guardian) • What the Guardian Can Do
Mental Disability Planning
Guardianship• Expensive
• Attorney’s Fees• Accounting Fees
• Time Consuming• Record-Keeping• Court Reports
• Public
Mental Disability Planning
General Durable Power of Attorney
• Blank Check
• Effective Immediately
• No Instructions
• No Reporting Requirements
Mental Disability Planning
Bare Bones Trusts
• Contain Standard Definitions of Disability and No Personal Instructions;
• Rely on General Durable Powers of Attorney; or
• Rely on Funding Only Power of Attorney
Mental Disability Planning
Client Care Process™
• Personalized Definition of Disability
• Private Transfer to Personally Selected Disability Trustees
• Personalized Disability Instructions
Mental Disability Planning
Planning for Retirement Plans
Contact Financial Institutions (or Human Resources) in advance
– Use their own power of attorney; or
– Get advance approval of your personalized document
Federal Estate Tax Reduction
Key Tax Savings Provisions
Unlimited Marital Deduction
$2,000,000 Exemption Equivalent
Federal Estate Tax Reduction
Trip to the IRS Supermarket
Federal Estate Tax Reduction
Property in The Supermarket Is Subject to Federal Estate Tax
Property out in The Parking Lot Is Not Subject to Federal Estate Tax
Federal Estate Tax Reduction
Family Trust
also called: B Trust Credit Shelter Trust By Pass Trust
FamilyTrust
Trustee Instructions:
Split Trusts Into Two Sub-Trusts
Family
Federal Estate Tax Reduction
Marital
Survivor May Be Trustee and Beneficiary of Both!
Federal Estate Tax Reduction
Trustee Instructions:
Transfer up to Exemption Equivalent to Family Trust, Put Any Excess in Marital Trust
Marital
Excess 1st $2,000,000(Today)
Family
Federal Estate Tax Reduction Marital Trust
Trustee Instructions:
Income to Spouse
Marital
Federal Estate Tax ReductionMarital Trust
Trustee Instructions:
Principal Full Control Full Use; Limited
Control on Death Full Use Marital
Federal Estate Tax ReturnFamily Trust
Trustee Instructions:
Income to Spouse Mandatory Discretionary
Family
Federal Estate Tax ReductionFamily Trust
Trustee Instructions:
Principal For “Needs” Health Education Maintenance Support
Family
Federal Estate Tax Reduction
The “Rule of 72”Dividing 72 by the rate of return on your investment roughly equals the number of years it takes to double
your account balance.
Federal Estate Tax Reduction
Effect of Growth
Excess
To LaterBeneficiaries But
Included in Survivor’s Estate
1st $2,000,000
8,000,000To Later Beneficiaries
WITHOUT Federal Estate Tax
FamilyMarital
Federal Estate Tax Reduction
Tax Savings Determined By:
Applicable Exclusion Amount
(Determined by Congress)
Funding of Family Trust
Federal Estate Tax Reduction
Available
Individual Name Assets Living Trust Assets Beneficiary Designations
Payable to Trust
Not Available
Joint Assets
Beneficiary Designations Payable to Individuals
Funding The Family Trust