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DEATH IS NOT THE END, THERE
REMAINS THE LITIGATION
OVER THE ESTATE.

              Ambrose Bierce
PRESENTED TO:        PRESENTED BY:

DR. MANISH SITLANI   ANJALI PATEL
                     MANASI KELKAR
                     NIKITA AURORA
Objective of Estate Planning


 Explain the use of a will…

 Describe estate taxes…

 Explain the use of trusts, gifts, and
 contributions…

 Introduce other aspects of estate planning…
ESTATE PLANNING



The act of planning for how your
 wealth will be allocated on or
  before your death is Estate
           Planning.
ESTATE


 An Estate represents a deceased person’s
      assets after all debts are paid.


At the time of a person’s death, the estate is
distributed according to that person’s wishes.
WILL

A legal request for how your estate should be
         distributed upon your death.

 It can also identify a preferred guardian for
            any surviving children.


   In will, you can specify the beneficiary.
WILL



To create a valid will, minimum age is 18 or 21

  One must also be mentally competent and
 should not be subject to undue influence or
              threats from other.
BENEFICIARY



   Beneficiaries are also regarded as Heirs.


The person specified in a will to receive a part
    in a estate of a person is beneficiary.
• Simple
TYPES OF
           • Traditional Marital
 WILLS       Share Will
TYPES OF WILLS

Simple Will: A will that specifies the entire
estate be distributed to a person’s spouse.

Traditional Marital Share Will: A will
suitable for larger estate that distributes half of
the estate to the spouse and other half to any
children or trust.
KEY COMPONENTS OF A WILL

           Executor


           Guardian


          Signature


   Letter of last instruction
KEY COMPONENTS OF A WILL

 Executor/personal representative – The
 person designated to execute the
 instructions of the will regarding distribution
 of assets.

 Guardian – Person assigned for caring of
 children and managing any estate left to the
 children.
KEY COMPONENTS OF A WILL

 Signature – Its needed to validate the will
 and ensure that its not a fake will.

 Letter of last instruction – A supplement to
 a will that can describe your preferences
 regarding funeral arrangements and indicate
 where you have stored any key financial
 documents.
SAMPLE WILL
1. Introduction of family

2. Payment of debt and taxes

3. Distribution of the Estate

4. Trust for Children

5. Executor

6. Guardian

7. Power of Executor

8. Power of Trustee
FOCUS ON ETHICS


If the court determines that there is a fraud
or unethical behavior or some form of undue
 influence on the creator of the will, it may
 prevent the person who used fraudulent or
    unethical behavior from receiving any
                  benefits.
CHANGING YOUR WILL

The will may be changed if the person :

 Move to a different state.

 Get married or divorced after creating the
 will.
 The person wants to change it because of
 any reason
CHANGING YOUR WILL

 The new will must specify that previous will was
 revoked to avoid multiple wills with conflicting
 instructions.

 For minor changes, a CODICIL can be added. This
 document specifying changes in the will. These are
 only minor revisions.
EXECUTING A WILL DURING PROBATE




 To adhere to the instructions of the will, probates
 are formed.

 Probate is a legal process that declares a will valid
 and ensures the orderly distribution of assets.
PROBATE PROCESS


 To start the probate process, the executor files
 forms in a local probate court, provides copy of the
 will, provides a list of the assets and debts of the
 deceased person, pays debts and sells any assets
 that need to be liquidated.

 Alternatively an attorney can be hired to complete
 the process.
TRUSTS



Trust is a legal document in which one
         person transfers assets to
     another who manages them for
         designated beneficiaries.
The two parties are:



             Grantor
Parties
             Trustee
TYPES OF TRUSTS


    Testament
       ary               Living



Standard
 Family
                              Revocable
           Irrevocable          Living
                Living
LIVING TRUSTS


 Assigning the management of your assets to
 a trustee while you are living.

 Managing the assets includes making
 decisions on how to invest or spend cash in
 terms of need.
REVOCABLE LIVING TRUST

 Dissolve or revoke the trust at any time you
 being the legal owner.
 The two reasons:
   To replace the trustee.
   To manage the trust yourself.

 By using a revocable living trust probate
 process is avoided but not the estate taxes.
IRREVOCABLE TRUST

 Living trust that cant be changed.

 Can provide income to the grantor but the
 assets in the trust are no longer legally
 yours.

 Not subject to estate taxes upon your death
 as assets are not the part of your estate.
STANDARD FAMILY TRUST


 Also called Credit-Shelter trust.


 Established for children in a family.


 It is a type of testamentary trust.
TESTAMENTARY TRUST


 Trust created by wills.


 Not structured as a living trust but it can be
 used to avoid estate taxes just as the
 irrevocable trust.
GIFTS


 GIFTS is a tax free distribution of funds from one
 person to another.

 Individuals receiving shares or jewelry, valuable
 artifacts, valuable drawings, paintings or sculptures
 or even property valued over Rs 50000 as gifts from
 non relatives have to pay taxes.
CONTRIBUTIONS

 CONTRIBUTION TO CHARITABLE
ORGANISATIONS:

 Any money donated from an estate to a
charitable org is not subject to estate taxes.
Many individuals plan to leave donations for
charitable orgs regardless of the tax
implications.
OTHER ASPECTS OF ESTATE PLANNING

 Living will – a legal document in which
 individuals specify their preferences if they
 become mentally or physically disabled.

 EXAMPLE:-Not keeping an individual on a
 life support when he falls ill to ensure that
 his assets are used in the way that he or
 she prefers.
OTHER ASPECTS OF ESTATE PLANNING

 Power of attorney – a legal document
 granting a person the power to make
 specific decisions for you in the event you
 are incapable.

 EXAMPLE:- Naming a family member or a
 close friend to make investment and
 housing decisions if one falls ill.
OTHER ASPECTS OF ESTATE PLANNING

 Durable POA for health care – a legal
 document granting a person the power to
 make specific health care decisions for you.

 It works in the circumstances when the
 situations is not covered by your living will.

 Necessary decisions will be made by
 someone who knows your preferences
MAINTAINING ESTATE PLAN DOCUMENTS


 Estate planning information such as will, living will
  and power of attorney.
 Life insurance and other insurance policies.

 Retirement account information.

 Home ownership and mortgage information.

 Ownership of other real estate.

 Personal property such as cars and jewelry.
MAINTAINING ESTATE PLAN DOCUMENTS


 Mortgage information

 Credit card debt information

 Ownership of businesses

 Personal legal documents

 Personal tax filing

 Bank account information

 Investment information
RISKS AND DRAWBACKS


 An individual's goals or wishes on how his
 assets are to be distributed may not be
 fulfilled.
 Huge costs of transfer and taxes.

 Time consuming legal procedures.
RISKS AND DRAWBACKS


 An individual's family may be in financial
 distress if the process is not properly
 planned.

 There may be insufficient liquidity to meet
 client's debts and taxes.
INHERITENCE LAWS


According to FEMA Regulation 2000, a non-
 resident who is a citizen of India can only
           transfer properties to:

 1.   A resident of India
 2.   A citizen but not a resident
 3.   A non-resident of Indian origin
What Inheritance Laws apply in India?


  No uniform codified laws apply. Different
 religious groups subscribe to different laws.

 Hindus have their own codified law (Hindu Succession
  Act) as well as a part uncodified.
 Muslims have their own Islamic Law on Succession.

 Parsees, Christians come under Indian Succession Act.
Taxation

 No inheritance or gift tax is levied in India.
Recipient of assets is subject to wealth tax.

 Net wealth tax is levied at 1% on a
taxpayer’s net assets if it exceeds INR3
million (US$60,599).

Income tax authorities are responsible for
assessing property value.
Financial
              Planning tools



Retirement                       Liquidity
 planning                       Management

                 Estate
                Planning
                Decisions



  Investing                      Financing


              Protecting your
                assets and
                  income
A man may keep a woman, but not
his estate.

               Samuel Richardson

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Estate planning

  • 1. DEATH IS NOT THE END, THERE REMAINS THE LITIGATION OVER THE ESTATE. Ambrose Bierce
  • 2. PRESENTED TO: PRESENTED BY: DR. MANISH SITLANI ANJALI PATEL MANASI KELKAR NIKITA AURORA
  • 3. Objective of Estate Planning  Explain the use of a will…  Describe estate taxes…  Explain the use of trusts, gifts, and contributions…  Introduce other aspects of estate planning…
  • 4. ESTATE PLANNING The act of planning for how your wealth will be allocated on or before your death is Estate Planning.
  • 5. ESTATE An Estate represents a deceased person’s assets after all debts are paid. At the time of a person’s death, the estate is distributed according to that person’s wishes.
  • 6. WILL A legal request for how your estate should be distributed upon your death. It can also identify a preferred guardian for any surviving children. In will, you can specify the beneficiary.
  • 7. WILL To create a valid will, minimum age is 18 or 21 One must also be mentally competent and should not be subject to undue influence or threats from other.
  • 8. BENEFICIARY Beneficiaries are also regarded as Heirs. The person specified in a will to receive a part in a estate of a person is beneficiary.
  • 9. • Simple TYPES OF • Traditional Marital WILLS Share Will
  • 10. TYPES OF WILLS Simple Will: A will that specifies the entire estate be distributed to a person’s spouse. Traditional Marital Share Will: A will suitable for larger estate that distributes half of the estate to the spouse and other half to any children or trust.
  • 11. KEY COMPONENTS OF A WILL Executor Guardian Signature Letter of last instruction
  • 12. KEY COMPONENTS OF A WILL  Executor/personal representative – The person designated to execute the instructions of the will regarding distribution of assets.  Guardian – Person assigned for caring of children and managing any estate left to the children.
  • 13. KEY COMPONENTS OF A WILL  Signature – Its needed to validate the will and ensure that its not a fake will.  Letter of last instruction – A supplement to a will that can describe your preferences regarding funeral arrangements and indicate where you have stored any key financial documents.
  • 14. SAMPLE WILL 1. Introduction of family 2. Payment of debt and taxes 3. Distribution of the Estate 4. Trust for Children 5. Executor 6. Guardian 7. Power of Executor 8. Power of Trustee
  • 15. FOCUS ON ETHICS If the court determines that there is a fraud or unethical behavior or some form of undue influence on the creator of the will, it may prevent the person who used fraudulent or unethical behavior from receiving any benefits.
  • 16. CHANGING YOUR WILL The will may be changed if the person :  Move to a different state.  Get married or divorced after creating the will.  The person wants to change it because of any reason
  • 17. CHANGING YOUR WILL  The new will must specify that previous will was revoked to avoid multiple wills with conflicting instructions.  For minor changes, a CODICIL can be added. This document specifying changes in the will. These are only minor revisions.
  • 18. EXECUTING A WILL DURING PROBATE  To adhere to the instructions of the will, probates are formed.  Probate is a legal process that declares a will valid and ensures the orderly distribution of assets.
  • 19. PROBATE PROCESS  To start the probate process, the executor files forms in a local probate court, provides copy of the will, provides a list of the assets and debts of the deceased person, pays debts and sells any assets that need to be liquidated.  Alternatively an attorney can be hired to complete the process.
  • 20. TRUSTS Trust is a legal document in which one person transfers assets to another who manages them for designated beneficiaries.
  • 21. The two parties are: Grantor Parties Trustee
  • 22. TYPES OF TRUSTS Testament ary Living Standard Family Revocable Irrevocable Living Living
  • 23. LIVING TRUSTS  Assigning the management of your assets to a trustee while you are living.  Managing the assets includes making decisions on how to invest or spend cash in terms of need.
  • 24. REVOCABLE LIVING TRUST  Dissolve or revoke the trust at any time you being the legal owner.  The two reasons: To replace the trustee. To manage the trust yourself.  By using a revocable living trust probate process is avoided but not the estate taxes.
  • 25. IRREVOCABLE TRUST  Living trust that cant be changed.  Can provide income to the grantor but the assets in the trust are no longer legally yours.  Not subject to estate taxes upon your death as assets are not the part of your estate.
  • 26. STANDARD FAMILY TRUST  Also called Credit-Shelter trust.  Established for children in a family.  It is a type of testamentary trust.
  • 27. TESTAMENTARY TRUST  Trust created by wills.  Not structured as a living trust but it can be used to avoid estate taxes just as the irrevocable trust.
  • 28. GIFTS  GIFTS is a tax free distribution of funds from one person to another.  Individuals receiving shares or jewelry, valuable artifacts, valuable drawings, paintings or sculptures or even property valued over Rs 50000 as gifts from non relatives have to pay taxes.
  • 29. CONTRIBUTIONS CONTRIBUTION TO CHARITABLE ORGANISATIONS: Any money donated from an estate to a charitable org is not subject to estate taxes. Many individuals plan to leave donations for charitable orgs regardless of the tax implications.
  • 30. OTHER ASPECTS OF ESTATE PLANNING  Living will – a legal document in which individuals specify their preferences if they become mentally or physically disabled.  EXAMPLE:-Not keeping an individual on a life support when he falls ill to ensure that his assets are used in the way that he or she prefers.
  • 31. OTHER ASPECTS OF ESTATE PLANNING  Power of attorney – a legal document granting a person the power to make specific decisions for you in the event you are incapable.  EXAMPLE:- Naming a family member or a close friend to make investment and housing decisions if one falls ill.
  • 32. OTHER ASPECTS OF ESTATE PLANNING  Durable POA for health care – a legal document granting a person the power to make specific health care decisions for you.  It works in the circumstances when the situations is not covered by your living will.  Necessary decisions will be made by someone who knows your preferences
  • 33. MAINTAINING ESTATE PLAN DOCUMENTS  Estate planning information such as will, living will and power of attorney.  Life insurance and other insurance policies.  Retirement account information.  Home ownership and mortgage information.  Ownership of other real estate.  Personal property such as cars and jewelry.
  • 34. MAINTAINING ESTATE PLAN DOCUMENTS  Mortgage information  Credit card debt information  Ownership of businesses  Personal legal documents  Personal tax filing  Bank account information  Investment information
  • 35. RISKS AND DRAWBACKS  An individual's goals or wishes on how his assets are to be distributed may not be fulfilled.  Huge costs of transfer and taxes.  Time consuming legal procedures.
  • 36. RISKS AND DRAWBACKS  An individual's family may be in financial distress if the process is not properly planned.  There may be insufficient liquidity to meet client's debts and taxes.
  • 37. INHERITENCE LAWS According to FEMA Regulation 2000, a non- resident who is a citizen of India can only transfer properties to: 1. A resident of India 2. A citizen but not a resident 3. A non-resident of Indian origin
  • 38. What Inheritance Laws apply in India? No uniform codified laws apply. Different religious groups subscribe to different laws.  Hindus have their own codified law (Hindu Succession Act) as well as a part uncodified.  Muslims have their own Islamic Law on Succession.  Parsees, Christians come under Indian Succession Act.
  • 39. Taxation No inheritance or gift tax is levied in India. Recipient of assets is subject to wealth tax. Net wealth tax is levied at 1% on a taxpayer’s net assets if it exceeds INR3 million (US$60,599). Income tax authorities are responsible for assessing property value.
  • 40. Financial Planning tools Retirement Liquidity planning Management Estate Planning Decisions Investing Financing Protecting your assets and income
  • 41. A man may keep a woman, but not his estate. Samuel Richardson