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Estate Planning

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

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Estate Planning

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  1. Estate Planning Protecting your family’s future

  2. 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

  3. Goals of Estate Planning • Control • To protect your family’s future • Financially • Emotionally

  4. 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

  5. Key documents in an estate plan • Will • Durable power of attorney • Health care power of attorney • Living will • Trust

  6. Wills • Witnessed will • Holographic will Anyone who dies without a will is subject to the law of intestate succession

  7. 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

  8. 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

  9. Type of property ownership • Joint tenants with right of survivorship • Tenants by entirety • Tenants in common • Sole ownership

  10. 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

  11. Duties of Personal Representative • Collects and inventories property • Distributes property according to will • Pays bills and collects debts • Files tax returns

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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.

  18. 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.

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