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  • Transcript

    • 1. Estate Planning
      • A Matter of Choice
    • 2. What is Estate Planning?
      • Systematic approach for identifying problems and offering solutions.
    • 3. Who Needs Estate Planning?
      • People with:
        • Wealth
        • Minor Children
        • Special Needs Dependents
        • Closely-held Businesses
        • Charitable Objectives
    • 4. Estate Planning Team
      • Estate Planning Team
      • Attorney
      • Accountant
      • Insurance advisor
    • 5. Key Problems at Death
      • Care of minor children
      • Probate administration
      • Death taxes
    • 6. Care of Minor Children
      • How do you plan for the care of minor children?
      • Who should you nominate?
      • Alternative choices
    • 7. What Happens to Your Estate at Death
      • Without
      • Planning
      With Planning Depends on You!
    • 8. Without Proper Planning
      • Taxes
      • Fees
      • Expenses
      • Commissions
      These costs are paid first
    • 9. Your Heirs Get What’s Left Over
    • 10. Proper Estate Planning
      • Wills
      • Trusts
      • Gifting
      • Insurance
      • Business agreements
      • Other estate planning documents
    • 11. Reasons For a Will
      • Avoid Intestacy
      • Nominate guardians
      • Choose executor
      • Make specific bequests
      • Authorization to continue business
      • Peace of mind
    • 12. What is Probate?
      • Delay
      • Cost
      Court supervised transfer of assets at death
    • 13.
      • $ 300,000 $ 15,000
      • 500,000 25,000
      • 1,000,000 50,000
      • 1,500,000 75,000
      • 3,000,000 150,000
      • 5,000,000 250,000
      Cost of Probate Gross Estate Typical Fee 5%
    • 14. Probate Avoidance
      • Joint tenancy
      • Totten trusts
      • Life insurance
      • Lifetime gifts
      • Revocable living trusts
    • 15. Revocable Living Trust
      • Grantor
      • Trustee
      • Beneficiaries
      Legally created relationship
    • 16. Living Trust
      • Probate avoidance
      • Private document
      • Avoids conservatorship
      • Professional asset management
      • Orderly transfer of assets
      • Collect insurance immediately
      Advantages
    • 17. Living Trust
      • Effort to fund
      • Cost to establish
      Disadvantages
    • 18.
      • What Happens to Your Estate at Death?
    • 19. Federal Estate Taxes
      • $ 2,000,000 0
      • 3,000,000 368,100
      • 5,000,000 1,173,580
      • 10,000,000 3,119,580
      • 15,000,000 5,009,940
      Estate Size Estate Taxes
    • 20. Projected Estate Value
      • Assumes 8% growth rate
      $600,000 $881,597 $1,295,355 $1,903,301 Taxes 5 Years 10 Years 15 Years $544,485
    • 21. Projected Estate Value
      • Assumes 5% growth rate
      $600,000 $765,769 $977,337 $1,247,357 Taxes 5 Years 10 Years 15 Years $254,416
    • 22. Will There Be Enough Liquidity in Your Estate at Death?
      • Taxes
      • Fees
      • Income
      • Cash funds
    • 23. Estate Planning Techniques
      • $12,000 annual exclusion
      • $2,000,000 by-pass amount
      • Unlimited marital deduction
    • 24. Problems With “All to Spouse Will”
      • Unlimited Marital Deduction
      • Asset appreciation
      • Progressive tax rates
      • Wastes by-pass amount
    • 25.
      • Your Estate
      • $
      Survivors Trust By-Pass Trust Children’s Trust
    • 26.
      • Your Estate
      • $
      Survivors Trust By-Pass Trust Children’s Trust
      • All income
      • All principal
      • Revocable trust
      • All income
      • Principal
      Distribute outright or pursuant to trust document No tax Tax on estate over $2,000,000 No tax on balance No tax up to $2,000,000
    • 27.
      • How will your estate taxes be paid?
    • 28. Four Alternatives
      • Cost per $1.00 of funding
      1.6 1.4 1.2 1.0 .8 .6 .4 .2 0 Borrowed Funds 0 10 20 30 40 Years Liquidate Assets Cash Life Insurance
    • 29. Life Insurance
      • Liquidity for final expenses
      • Many uses
      • Tax-preferred
    • 30. Second-to-die Life Insurance “Survivorship life”
      • Pays on death of second spouse
      • Funds generally used to pay estate taxes
    • 31. Irrevocable Life Insurance Trust
      • Trust applies for and owns insurance policy
      • Money for premium is gifted to the trust
      • Annual gift tax exclusion or unified credit used to avoid gift taxes
      • Death benefit paid to
      • trust and trust controls
      • and distributes funds
    • 32. What About the Insurer’s Financial Strength? The insurer must be able to meet its obligations to policyholders many years in the future.
    • 33. Estate Planning
      • Benefits
      • Care of minors
      • Avoid probate
      • Reduce death taxes
      • Enhance lifetime income
      • Tax relief
      • More to heirs
      • Peace of mind
    • 34. Getting Started
      • Estate Planning Process
      • Estate analysis
      • Meet with estate planning team
      • Develop or update your estate plan
      • Periodic review