Fundamentals of estate planning


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Fundamentals of estate planning

  1. 1. Fundamentals ofEstate PlanningLaw Offices ofSteven M. Basche,
  2. 2. WHY YOU NEED A WILL?You choose: • Who gets your property • Who cares for your children (guardian) • Who is in charge of your estate (executor) Without a will, you get the government’s will, and you may not like it
  3. 3. WHY YOU MIGHT WANT A TESTAMENTARY TRUST• Manage assets for children or other dependents• Ensure that if you and your spouse die at the same time, your money will managed for your children’s or dependent’s benefit• Manage and protect the assets left to your children or dependents, even after they turn 18
  5. 5. Advance Directives• Living Will• Appointment of a health care representative• Designation of a conservator of the person for future incapacity• Document of anatomical gift
  6. 6. Living Will• A document that states what medical actions you would like taken if you can’t express your wishes• Generally, advance directives deal with end-of-life decisions, such as providing or withholding life support or medical care in the case of traumatic injury or advanced disease
  7. 7. Appointment of Health Care Representative• You choose who you want to make health care decisions if you can’t• Same person makes end of life decisions• Your physician’s role• Include consultation with other family members
  8. 8. Advance Designation of Conservator• Your choice of who you would want the probate court to appoint to as Conservator of the Person if a petition is filed in court Anatomical Gift• Expresses your wishes regarding organ donation
  9. 9. Why use advance directives?• Give you the power of choice.• Advance directives ensure that your wishes regarding end-of-life decisions are followed• End-of-life decisions are very emotional and difficult for family and friends, and you might want to alleviate this burden by using an advance directive• Eliminate any question about your specific wishes
  11. 11. What is a power of attorney?• A general power of attorney gives your agent (“attorney-in-fact”) the right to act on your behalf• You can tailor a power of attorney to provide that it only comes into effect upon disability (but there may be problems with that).
  12. 12. Why use powers of attorney?• Avoids the need for have a court appoint either a conservator of the person or a conservator of the estate in the case of disability• You designate the person you want to be responsible for making decisions regarding your assets, your residence, and financial affairs
  14. 14. What is a Living Trust?• A “legal box” that you create for the benefit of another• The Trustee is the boss of the box• You are usually both the “boss of the box” and the beneficiary during your lifetime• You can revoke or amend the trust• Any assets in the box do not go through probate• However, you still have to pay probate fees on those assets.
  15. 15. Tax implications• Living trusts do NOT avoid taxes• The income from the trust is included on your income tax returns during your lifetime, and the principal (assets of the trust) are included in your estate for federal estate tax purposes• The trust is treated as if it does not exist for Federal income tax purposes
  16. 16. Living trusts and probate• If you transfer all of your property to a living trust, you can potentially avoid probate*• However, living trusts are usually more expensive to prepare than a will
  17. 17. Asset protection?• During your lifetime, assets held in your living trust are still subject to claims by your creditors• You can add “spendthrift” provisions• You can include “bloodline” provisions
  18. 18. Privacy• Wills become part of the public record in probate• Living trusts do not
  19. 19. Disability Protection• A living trust is the best way to make sure that if you are disabled, your successor trustee (often your spouse) can take control of your assets quickly and easily• Banks are getting wary of accepting powers of attorney
  20. 20. Estate Taxes• Estates are potentially subject to a federal and Connecticut estate tax upon death of any individual• This year the Federal exemption amount is $5,000,000• Next year it goes down to $1,000,000 unless Congress acts• The Connecticut exemption amount is $2,000,000 per person• Unlimited exemption for assets passed to your spouse• Same sex couples need special estate planning
  21. 21. Law Offices of Steven M. Basche, LLC Fixed Fee Estate Planning• Wills• Trusts• Powers of Attorney• Advance Directives• Health Care Proxies• Special Needs TrustsMention code CEA8712 and save 10% 2389 Main Street, Glastonbury, CT 06033 860-659-5582