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The Importance Of An Estate Plan
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The Importance Of An Estate Plan

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  • 1. The Importance of an Estate Plan (In Ten Minutes or Less) Jeffrey O’Brien Attorney at Law Mansfield Tanick & Cohen, P.A.
  • 2. Why Do You Need an Estate Plan?
    • If you don’t create one, the State does it for you (intestate succession laws are the “default estate plan”); this can lead to results you don’t want
    • Probate avoidance and estate tax minimization
    • Avoid family disputes
    • Appoint guardians for minor children
  • 3. The Basic Estate Plan
    • Last Will and Testament
    • General Durable Power of Attorney (very broad powers)
    • “Statutory Short Form” Power of Attorney (for financial matters)
    • Health Care Directive (your wishes on health care matters, especially treatment of terminal conditions)
  • 4. What to do with the dogs (or cats)
    • MN does not allow trusts for pets
    • Your will requires special language if you want to provide for someone to take care of your pets upon your death
  • 5. What About Trusts?
    • Use of a revocable trust takes away the need to probate your estate
    • BUT: make sure to fund the trust (i.e., re-title your assets in the name of the trust)
    • Easy to transfer assets to beneficiaries of a trust upon death of grantor
    • Private (probate – public proceeding through a court)
    • No tax benefit to a revocable trust
  • 6. Irrevocable Life Insurance Trusts
    • Life insurance proceeds are non-probate assets
    • BUT: life insurance proceeds are included in your taxable estate for estate tax purposes
    • Solution: irrevocable life insurance trust (ILIT); after the policy/policies have been in the trust for three (3) years, the death benefits will be excluded from your taxable estate
  • 7. Planning for Business Owners
    • Nothing specific in intestacy statutes regarding transfers of businesses or real estate
    • Buy-sell agreements funded with life insurance; owner dies, other owner(s) buy his interest with life insurance proceeds
    • Real estate: family limited partnerships (FLPs) with gifting program (and use of valuation discounts) allow transfers to children/grandchildren free of gift tax
  • 8. Reviewing & Updating Your Estate Plan
    • Marriage/Divorce
    • Death of a spouse
    • Children
    • Change in financial circumstances
    • Regular review and updating of your plan is a must in order to avoid unintended consequences!
  • 9. Our Process
    • We give you a “homework assignment” – asset information, family information, your desires as to who gets what, etc.
    • We review this information at no cost and give you a recommended plan and a fee quote for implementation of the plan
    • We work in tandem with, not exclusive of, your advisors (financial advisor, CPA)
    • In most circumstances, we charge flat fees for our estate plan work
  • 10. Average Fees
    • Will for single person: $750.00
    • Wills for married couple which create trusts for children on parents’ death: $1,000.00
    • Revocable trust for single person: $1,500.00
    • Revocable trusts for married couple: $2,500.00
    • Irrevocable Life Insurance Trusts: $1,000.00 for 1 set (husband & wife)
    • More complicated trusts: fees vary
    • COMPARED WITH:
    • AVERAGE COST OF PROBATE: $10,000.00
    • Any estate plan costs less than not having one at all!
  • 11. Ideal Referral
    • Mom & Dad
    • Yourselves
    • Family, friends
  • 12. Questions? Thank You! [email_address] http://www.linkedin.com/in/jeffreycobrien http://www.facebook.com/obrienjeffrey http://twitter.com/jeffobrien http://www.mansfieldtanick.com http://blog.jeffreyobrienesq.com 612.341.1263

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