Planning for Retirement and Your Estate Plan
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  • 1. Planning for Retirement andYour Estate PlanOctober 24, 2012Presented by:Gregory M. Wirt, Esq.Fox Rothschild LLP
  • 2. Estate Planning Objectives Plan for disability or incapacity  Financial decisions  Medical decisions Develop a plan for distribution of your assets  Who, What, When and How  Minimize exposure to estate, inheritance and income tax liability
  • 3. Estate Planning Considerations Consider who should handle your medical and financial decisions if you are not able to act Provide for your family members – spouse, children, grandchildren, step-children, parents and siblings Coordinate your estate plan among your Will, beneficiary designations and the titling of your assets
  • 4. Effect of a Lack of Estate Planning Statutory or Court appointment of agents for medical and financial decisions Intestacy = State imposed plan Estate may be required to pay unnecessary taxes and expenses
  • 5. Estate Planning Documents Durable General Power of Attorney Living Will and Health Care Power of Attorney (Advance Health Care Directive) Will
  • 6. Planning for Incapacity Durable General Power of Attorney  Appointment of agent  Power to manage your finances  Indicate powers granted to your agent  Name a successor agent  Durable v. Springing Power of Attorney
  • 7. Planning for Incapacity Living Will  Instruct your health care providers and family members regarding life sustaining treatment Health Care Power of Attorney  Appoint an agent to make health care decisions on your behalf
  • 8. Distribution of Assets at Your Death Probate v. Non-Probate Assets  Direct transfer  Beneficiary Designations (401(k), IRAs and other retirement accounts)  Life Insurance  Joint ownership  Tenants by the Entireties  Joint Tenants with Right of Survivorship  Tenants in Common  Trusts
  • 9. Will Appoint your Executor Distribution of Assets  Personal Property  Specific Bequests – Family or Charity  Residue Should a trust be a part of your plan? Estate and inheritance tax saving strategies
  • 10. Will Your Will is influenced by:  Personal circumstances and your goals  Type and value of assets  Tax planning considerations Review your estate plan every 3 to 5 years or upon the occurrence of certain events  Move to a different state  Marital status changes  Youngest child becomes an adult  Change executor, guardian or trustee  Changes to laws that affect your estate  Changes in the value of your estate
  • 11. Federal Estate Tax  Tax imposed at the time of death based on the value of the estate  Assets left to a charity or spouse (U.S. citizen) are exempt  Life insurance is included in the value of the estate
  • 12. Federal Estate TaxTax Exemption Limits & Maximum Tax Rates Estate tax Maximum estate and Year of death exemption gift tax rate 2009 $3,500,000 45% 2010 No limit/ 45% $3,500,000 2011 $5,000,000 35% 2012 $5,120,000 35% 2013 $1,000,000* 55%*
  • 13. State Taxes Pennsylvania Inheritance Tax  Spouse – exempt  Parents, children, grandchildren – 4.5%  Siblings – 12%  Others (nieces, nephews, friends, etc.) – 15%  Charities – exempt New Jersey Estate and Inheritance Tax  Estate tax imposed on estates above $675,000 – variable rate  Inheritance Tax  Class A beneficiaries (spouse, civil union partners, children and grandchildren) – exempt  Siblings – 11% - 16%  Others – 15% - 16%
  • 14. Goals of Estate Planning Completes your financial plan Plan for your incapacity and health care decisions Plan for your incapacity and financial decisions Develop a plan to distribute your assets and provide for your family Minimize tax exposure
  • 15. Contact Information Gregory M. Wirt, Esquire Fox Rothschild LLP 747 Constitution Drive, Suite 100 Exton, PA 19341-0673 610-458-3113 gwirt@foxrothschild.com