Estate Planning Presentation

1. Estate Planning
Steven Cruz, CCEP
Certified Estate Planner
Life and Estate Planning
Serving the High Desert and San Bernardino
County Areas
(818) 939-1656
www.yourlifeandestateplanning.com

2. What does your estate consist of?
Money
Real Property
Personal
Property
Estate

3. Who benefits from estate planning?
• Just the rich?
• No… Estate planning is not just for the Rich.
The Rich benefit from advanced estate
planning, but simple estate planning can
benefit everyone, no matter their income
level.

4. What benefit come with an estate
plan?
• Maintain control of Property: You can
preserve assets to care for yourself or loved
ones, if you become incapacitated or die.
• Minimizes Disputes: Estates set out your
wishes, which are accomplished when you die
or when you say, thus avoids probate and
court, which avoid family disputes.

5. What happens if you become
incapacitated?
• Incapacity can happen at anytime, if you do
not have an estate plan, then the court will
take over your assets and a court appointed
guardian will have full control and will make
decision about your assets that might not be
what you want.

6. Ways to plan for incapacitation
Living Trust Places your wishes and
instructions in writing.
Allows trustee or
successor trustee to
manage assets.
Healthcare
Directive
Designates an agent to
act on your behalf,
regarding any medical or
health situations.
Power of
Attorney
Designates an agent to
act on your
behalf, regarding any
financial situations.

7. Real Property Management
• There are three ways to have property
transferred over without any court
interference.
• 1) Joint tenancy with the right of survivorship.
• 2) Community property with the right of
survivorship.
• 3) Place property in a trust and the successor
trustee or trustees gain the property or can
give the property.

8. What happens if you pass away
without an estate plan?
• Your assets will be frozen and placed in
probate court, whether married or not.
• Your property will be distributed by the Court
law, which may not be your wishes.
• Retirement Plans
(401(k), IRA’s, Pensions, Annuities) and Life
insurance will be distributed to your allocated
beneficiaries.

9. Basic estate plan
• Last Will & Testament:
• Allows you to direct how your assets are to be
distributed.
• Must be signed and witnessed by two non-
interested parties. Names an executor of your
will.
• Not flexible
• Subject to probate

10. Probate with a Will
• Executor is personally responsible for the
debts and distribution of property.
• Bank accounts/Real property are frozen
until probate is complete. Families can get
an allowance from the court in some cases.
• Requires accounting to the court (CPA Fees).
• Probate can take up to two (2) years to
complete.
• Probate can charge 8-10% of the assets and
will take their share before distributed.
• Attorney fees can add up.
• Executor can charge a fee.
• Death taxes

11. How to avoid probate?
• Make lifetime gifts to loved ones.
• Make sure all your Beneficiaries are
designated and updated (401(k), IRA’s,
Pensions, Stocks, Life insurance).
• Hold all real property with joint tenancy with
right of survivorship.
• Create and implement a revocable trust.

12. What is a Revocable trust?
• It is an agreement that determines how a
person’s assets are to be managed and
distributed during their lifetime and also upon
death.
• A revocable trust involves three parties:
– The Grantor: Creator
– The Trustee: Manager of the trust
– The Beneficiaries: Persons that receive property or
income from the trust.

13. Revocable Trust
• Flexible: Can be changed and amended.
• Controls property and assets.
• Protects against court interference when you
become incapacitated. Also, avoids probate, and
minimizes taxes and expenses of death (Probate
court cost, attorney fees, CPA fees etc…).
• Provides safeguards for yourself, your spouse,
your children, your parents and any other loved
one which you applied as a beneficiaries.

14. Lifetime Gifting
• Allows an individual to gift up to $14,000 in cash or
assets each year to each of as many individuals as they
want tax-free.
• Each individual has a maximum lifetime gift exclusion
of $5.34 million as of 2014, but will adjust each year to
inflation.
• For married couples the exclusion is $10.68 million.
• If one spouse dies, then the other spouse can use any
remaining gift tax exclusion that is left over from the
deceased spouse.
• Removes future appreciation of property from your
taxable estate.

15. Tax consideration
• $100,000 (Original Basis)
• $250,000 (Current Value)
• $150,000 (Appreciation)
• Gifting property during your
lifetime, the beneficiary is
obligated to pay capital gains
taxes on the full appreciated
value. In this example that
would be $150,000.

16. Estate tax consideration
• $100,000 (Original Basis)
• $250,000 (Current Value)
• $150,000 (Appreciation)
• Gifting property through a
trust, the beneficiary is obligated
to pay capital gains taxes on the
appreciated value that occurs after
death. In this example that would
be $0.

17. Many different types of strategies to
prepare for the future
• Estate planning has very easy simple strategies
and some very advanced strategies, most
people just need a simple one. Your needs
should to be assessed and evaluated by a
professional.
• Do not fail to plan, because when you fail to
plan, you plan to fail.

18. Ask yourself these questions
• Have I created a plan for my future?
• Have I created a plan for disability?
• Have I created a plan for incapacity?
• Have I created a proper plan to control my
assets after I pass?
• Does my current plan address all these
questions and how accurately do they reflect
my wishes?

19. We are profession and confidential
• Life & Estate Planning is a firm, that is focused on
educating individuals to the needs and risk of life
and the future.
• We offer free evaluations and options for all your
Life & Estate needs.
• We are a small firm and we focus on personability
& relationships.
• We wont just help you for a day, we will be here
for you for years and years.