What every financial planner

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What every financial planner

  1. 1.  The Purpose of Planning  Obstacles: Probate &Taxes  Basic Estate Planning 101  Complex Estate Planning 101  Asset Protection Planning 101 -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  2. 2.  …to manage assets during life;  …to manage responsibilities and assets during incapacity; and  …to properly care for and distribute estate upon death. -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  3. 3.  Probate ◦ …a court-supervised process to transfer assets from a deceased individual to a beneficiary. ◦ Extremely expensive. ◦ Extremely complicated / lengthy.  Case Studies: -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  4. 4.  Conservatorship / Guardianship Hearings (Probate Court) ◦ Without an estate plan, a court will determine if you are incapacitated, and if so, who is to care for you and your children.  Case Study: -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  5. 5.  Taxes ◦ Estate Taxes  …approximately 50% tax on net worth upon death. ◦ Capital Gains Taxes  …tax on profit upon sale of property. ◦ Income Taxes  …easily reduced through advanced planning opportunities. -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  6. 6.  Keep The Goals, and The Obstacles in Mind  Estate Planning Options ◦ …do nothing at all. ◦ …create a Will. ◦ …own property jointly with another. ◦ …create a living trust / comprehensive estate planning package. -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  7. 7.  Doing Nothing at All ◦ No tax planning opportunities; ◦ No protection upon incapacity; ◦ No asset protection after death; ◦ No decision on how to distribute estate; and ◦ Full probate (with associated fees and delays).  Create a Will ◦ Same results as if doing nothing at all, EXCEPT you can choose how estate is distributed. That is all. -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  8. 8.  Jointly Owning Property ◦ No tax planning opportunities; ◦ No protection upon incapacity; ◦ No asset protection after death; and ◦ Increased liability; BUT ◦ No probate (which is good). -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  9. 9.  Living Trust / Comprehensive Estate Plan ◦ Protection upon incapacity; ◦ Asset protection capabilities (limited); ◦ Ability to appoint individuals to act as agents upon incapacity and death; ◦ Complete authority to plan distribution. ◦ No probate. ◦ (SOLVES ALL OF THE ISSUES RELATING TO ESTATE PLANNING) -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  10. 10.  How a Comprehensive Plan Operates ◦ …Living Trust is at the core;  Separate entity to hold assets that survives your incapacity and death, upon which designated successors take over, and our bound to specified terms and conditions; ◦ …Powers of Attorney / Advance Healthcare Directives;  Documents to appoint agents to act on your behalf. ◦ …Pourover Will  Document which appoints guardians for your children (among other things). ◦ …Ancillary Documents (Supportive and Extra Protection). -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  11. 11.  Specific Situations ◦ …special needs beneficiaries; ◦ …business interests; and ◦ …investment properties, etc.  The Estate Tax ◦ …50% tax on one’s net worth upon death.  $1,000,000 exclusion ◦ …many vehicles exist which can structure assets in a manner which allows them to not meet the definition of “net worth.” -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101
  12. 12.  What Does Asset Protection Do? ◦ The effect is to essentially make it difficult for creditors to come after the client. ◦ Most plans take jurisdiction out of state or country, making it expensive for creditors. ◦ EXCEPTION: Creating an LLC or Corp. is almost always a sure bet (in limited circumstances).  Fraudulent Transfer Rule ◦ …cannot engage in asset protection for the sole purpose of defrauding creditors. ◦ …can do it ahead of time to protect yourself. -Purpose of Planning -Probate and Taxes -Basic Estate Planning 101 -Complex Planning 101 -Asset Protection 101

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