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Estate Planning Presentation

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This is a general estate planning and estate tax presentation that was held in 2009, and may be construed as Attorney Advertising.

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Estate Planning Presentation

  1. 1.    Timins & Durante, LLP    PRESENT   Estate Planning in a Nutshell:  Living Documents, Effective Estate Transfers,  and How to Properly Use Trusts      Seminar held on September 24, 2009  ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 1 of 14 
  2. 2. BIOGRAPHY OF SPEAKER   Daniel A. Timins  Timins & Durante, LLP  800 Central Park Avenue, Suite 207  Scarsdale, New York 10583  Phone: (914) 819‐0663  Fax: (914) 372‐1491  www.tdlawoffices.com       Daniel Timins is a Founding Partner of Timins & Durante, LLP, where he practices estate planning,taxation, and elder law. After receiving his Bachelor of Arts Degree from Washington University, hereceived his Certified Financial Planner designation and worked at the financial firms of MerrillLynch, American Express Financial Advisors and Alliance Bernstein Investments. Daniel received hisJuris Doctorate from Pace Law School and during his schooling worked as a legal intern at the LawOffices of Eugenia Vecchio and Associates in Harrison, New York, and the Pace Investors’ RightsProject.Between 2006 and 2009 Daniel was a member of the New York City Bar Associations Trusts, Estatesand Surrogates Committee, where he helped to draft proposed state legislation for Insurable Interests ofLife Insurance Trusts, New York Insurance Law Section 3205, and participated in submitting proposedlegislation for the Revocatory Effects of Divorce, EPTL 5-1.4. He is a currently Co-Chair of theWestchester County Bar Association’s Continuing Legal Education Committee and Co-Chair of theWestchester Women’s Bar Association’s Taxation Committee. He is also currently a member of theNominating Committee for the Board of the Pace Law School Alumni Association, a Board Member ofthe Westchester Women’s Bar Association Foundation, and a former Co-Chair of the WestchesterCounty Bar Association’s Membership and Member Benefits Committee. In 2009 Daniel was named asa recipient of the “40 Under 40 Rising Stars Award” by the Business Council of Westchester.Daniel is currently a member of the Justice Brandeis Westchester Law Society, the Financial PlanningAssociation’s Greater Hudson Valley chapter, and a former member of the Westchester County Bar andNew York State Bar Associations’ Estate Planning and Real Property Committees. Daniel is licensed topractice law in the state of New York. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 2 of 14 
  3. 3. The Estate Planning Process INTRODUCTION DATA GATHERING STRATEGY SESSION EXECUTION CEREMONY Discuss general  Review financial  Discuss options that  Execute all legal  estate planning;  statements and  are available;  documents; update  review client’s  property; further  review drafts of  beneficiary designation  desires, priorities  discuss the client’s  documents and  forms and deeds; discuss  and concerns desires explain significance future contact  THE THREE CORNERSTONES OF AN ESTATE PLAN LEGAL DOCUMENTS “Living Documents” Wills & Trusts Deeds to Real EstateACCOUNTS & BENEFICIARY  GIFTING DURING LIFE DESIGNATION FORMS Giving Outright or in TrustJoint & Individual Accounts 529 Plans & UTMAs Life Insurance Policies Health & Education Expenses Retirement Plans ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 3 of 14 
  4. 4. “LIVING” DOCUMENTSEstate Planning begins with preparing for issues that may arise during your life. This is because aperson never knows when they will need help with his or her daily legal requirements. Who will makehealth decisions for a person with advanced stages of dementia? If a family member is physicallydisabled? Who will have the discretion to make financial transactions for them? A comprehensive estateplan begins with the following documents; if these documents do not exist a family member (or worse,the state) will have to commence a Guardianship Proceeding on behalf of the affected individual,which can be expensive, time-consuming and intrusive on the individual’s privacy.A Power of Attorney [“POA”] is a form thatallows you, as the principal, to name anagent of your choice to assist you withfinancial affairs. Despite the title, an agentdoes not need to be an actual lawyer. A POAcan be extremely helpful during times you arenot available to deal with your own finances,either due to health, not being available to doso yourself, or even if you are not interestedin maintaining your own financial affairs.Your POA can either be durable, meaningyour agent has control immediately, limited,meaning effective for a limited amount oftime, or springing, meaning it is effectiveonly after some stated event (such as beingdisabled). You can revoke a POA at any time,provided you are mentally competent to doso. Because, hypothetically, your agent canabscond with your funds, your agent shouldbe someone you place great Trust in, such asa spouse or trusted child with adequate personal finances and some degree of financial accumen.A Health Care Proxy is a document that allows a named agent to make health care decisions for youwhen you are unable to do so yourself. An example is when a person is having a surgery and will beundergoing general anesthesia and the attending surgeon would like to do unexpected additional work,or when a person is no longer mentally fit to choose how to take care of themselves. Health care proxiesonly apply when a person is unable to make decisions for themselves, and is revocable at any time. If aperson will be having surgery a hospital will require a person to sign that hospital’s standard health careproxy; however, once the hospital stay is completed the proxy ceases to be effective.A Living Will provides instructions to your health care agent as to whether or not you would like toremain alive if you are dependent on hydration, feeding or respiratory mechanisms and in a “brain dead”state. Additionally, it will provide instructions as to whether you want “maximum pain and relief” in theform of painkillers even if the necessary dosage may inadvertently cease cardiac functions. Living willseffectively “pull the plug,” but ONLY if the attending physician believes the principal will not recovercognitive brain functions. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 4 of 14 
  5. 5. An Advanced Guardianship Directive is a document that names a guardian for minor children whentheir parents remain alive but are unable to continue caring for those children. A person can name both aguardian of custodianship and guardian of finances. It should be noted that these are mere preferences:The state is always primarily concerned with what is in the “best interests of the child,” so some AGDsmay only encompass a desire as opposed to anything that can be legally enforced. Additionally, oneparent cannot divest the minor’s other parent of custodial rights (only a court can do that). Howeverparticularly where parents are divorced and one spouse becomes unable to take care of his or her child, itmay be possible to name an individual other than the remaining parent as guardian of finances.A Disposition of Remains is a document that states a person’s instructions for administering to his orher remains. Many people have added this preference to their Wills, but since a Will is not admitted toProbate until several weeks after death (at a minimum) these instructions are ineffective for practicalpurposes. Without a DORA a loved one, already bereaved and facing a multitude of important post-mortem decisions that must be made in rapid succession, may feel pressured to handle your remains asthey see fit. Instructions in a DORA include information on purchased burial plots, and can be anywherefrom very simple (“I desire to have a traditional Catholic funeral and burial”) to highly detailed (“Iwould like my remains to be cremated, and have my ashes scattered into the East River on a warmspring day in front of a marching band playing “The Sound of Music”).WHEN YOU DON’T HAVE LIVING DOCUMENTSSome people, particularly those who do not have close friends or relatives, or people who choose toavoid addressing the very serious issues mentioned above are particularly vulnerable when they have aproblem that a Living Document would address.Guardianship Proceedings are legal proceedings that take place in the county Surrogate’s Court, andare conducted to handle legal matters for people who cannot do so themselves: Minor children in needof a guardian of custodianship or finances typically must go before the court. Seriously disabled adultswhom a physician declares incapable of handling his or her health or financial affairs are also the focusof these proceedings. In the case of disabled adults the Court will tailor a specific guardianshipapplicable to the diminished skills of that adult. A former physician suffering from dementia who maystill be able to make his own rational health care decisions may only have a guardian appointed for hisfinancial affairs. The opposite may be true of a former accountant or financial planner.Guardianship Proceedings can be gut-wrenching events to watch! Not only does the proposedguardian have to take care of the disabled adult (which is difficult enough), but the proposed GuardianAND the disabled individual actually have to plead their case to a judge in person, file papers, paylegal fees, AND in the interim the adult’s funds cannot be used for these costs AND his or her healthcare decisions are somewhat in limbo AND the Court may or may not choose the guardian whom theadult would have wanted. Guardianship Proceedings can be avoided by having the proper LivingDocuments, since these documents address the exact affairs these proceedings intend to deal with. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 5 of 14 
  6. 6. GIFT & ESTATE TAXES and EFFECTIVE TRANSFERSFEDERAL ESTATE AND GIFT TAXATION The “Unified” Credit Annual  Exclusion Gifts:  “Annual Exclusion Gifts” have no impact on a person’s $13,000 in 2009  lifetime “Gift Tax Exemption” or post-mortem “Estate Tax Exemption” • A person can gift Annual Exclusion Gifts to any and every US citizen every year Estate Tax  Exemption  “Gifts” are given during life; any transfer of an amount $3,500,000 in 2009 over the annual exclusion decreases a person’s Gift Tax Exemption • When this amount is depleted Federal Gift Taxes are Gift Tax  assessed on future gifts Exemption  $1,000,000     “Bequests” are given after life and decrease a person’s Estate Tax Exemption in 2009 • Any use of the Gift Tax Exemption during life decreases the amount that can be given free of Estate Taxes after lifeNEW YORK STATE ESTATE TAXES MYTH: The Federal Estate Tax affects millions of Americans. FACT: The Federal Estate Tax currently affects only about 1% of Americans. However, if left unchanged, the New York Estate Tax will affect a much larger percentage of households! Fortunately, there are no New York state gift taxes. Hypothetically, a citizen of New York can gift an Federal Estate  unlimited amount of property without assessing state gift Tax Exemption  taxes. = $3,500,000 New York currently begins assessing a state estate tax starting at $1,000,000; the approximate rate of taxation is ~9.9% on every dollar over this amount. Additionally, New York  since the passage of EGTRRA, these taxes are now merely Estate Tax  a deduction against federal estate taxes (whereas they used Exemption =  to be a credit). $1,000,000 Think about that for a moment: If a person in Westchester County owns a home and a life insurance policy, has a modest retirement plan, and a modest amount of personal property (such as a car and some jewelry) his or her estate MAY BE TAXABLE!!! ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 6 of 14 
  7. 7. TRANSFERRING PROPERTY AFTER LIFE There are several ways that property is transferred after life. Many people believe having only a Will is enough to accomplish one’s testamentary desires. However, for many people a Will only transfers a very small portion of their property. Effective estate plans include the proper planning of (1) assets that pass by Operation of Law, (2) individually-owned assets that pass by a Will through Testamentary Transfers, and (3) avoiding relying on Statutory Transfers. Operation of Law is the preferred method of transferring property (because distributions are private, inexpensive and fast), but ONLY if proper thought and preparation has been made to handle these assets.“OPERATION OF LAW” The “Beneficiary Designation Form”Assets which are transferred by operation of law are automatically transferred to the Beneficiary bymerely giving a death certificate to the administering institution (a bank where a joint account is held,life insurance company for a life insurance policy, or a financial institution for an IRA). The operativetransferring document is the Beneficiary Designation Form or a Deed to real estate, NOT a Will. In thecase of joint property (financial or real estate) instructions in a Will are ineffective; the surviving jointowner only needs to produce a death certificate to client the property. RULE: Assets that are transferred by operation of law are NOT affected by ANY language in a Will (except revocation of Totten Trusts); the joint owner of the property or the Beneficiary Designation Form are the sole means of transferring the asset unless there is a judgment awarded by a court or an agreement among all of the estate Beneficiaries. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 7 of 14 
  8. 8. JOINTLY OWNED PROPERTY Avoid Using It Too Much!!!Joint property between spouses is considered to be contributed equally by each spouse regardless ofwho actually provided the funds.Joint property between non-spouses is considered to be given entirely by both parties. EXAMPLE: Martin and Charlie, father and son, have a joint bank account worth $100,000. Because they are not spouses it doesn’t matter who actually funded the account: Unless they can prove otherwise through thorough documentation, the IRS assumes that if Martin dies first he contributed all $100,000. If Charlie dies before his father the IRS assumes Charlie contributed the entire amount. Then, because the funds are transferred in full to the survivor, when the survivor passes away the same money can be taxed again! In other words, the IRS has the opportunity to assess estate taxes on the same funds twice over this non-spousal joint property!RETIREMENT PLANSBecause retirement plans, such as 401(k)s and IRAs, grow tax deferred income taxes will be owed ondistributions, either during the life of the account Owner or after life based on the lives of theBeneficiaries in the form of required minimum distributions [“RMDs”]. The amount that must bedistributed is determined by a standard factor set out in IRS life expectancy tables. The younger thedesignated beneficiary, the lower the required minimum distribution Retirement Plans Requirement Minimum Distribution Rules for Non-Spousal Beneficiaries RMDs: Death BEFORE RBD RMDs: Death AFTER RBDIf NO Designated First Year of • All QP & IRA money must be • RMDs over Owner’sBeneficiary Distributions distributed by 12/31 of year of remaining life expectancy th 5 anniversary of Owner’s w/out recalculation(on Beneficiary Subsequent death – this is an income tax RMD is calculated byDesignation form) Years nightmare! reducing Owner’s life expectancy by “1”If a Legitimate First Year of • RMDs made over bene’s life • RMDs may be made over“Individual” Distributions expectancy from the Single the longer of:Designated Bene Life Expectancy Table IF the (1) the Owner’sIS Named bene commences distributions remaining life by 12/31 of the year after the expectancy, or(on Beneficiary year of Owner’s death (2) the bene’s remainingDesignation form) • RMD for designated bene life expectancy uses bene’s life expectancy for his age on his birthday in the year following the year of the Owner’s death Subsequent • RMD calculated by reducing RMD calculated over bene’s Years bene’s life expectancy by “1” life expectancy from the from the IRS tables Single Life Expectancy Table ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 8 of 14 
  9. 9. PRACTITIONER’S NOTE – Always Name Your Spouse as Primary BeneficiaryIt is almost always preferable to name a spouse as Primary Beneficiary of a retirement plan, even ifestate tax issues are involved. Spouses receive preferential RMD treatment – unlike other beneficiaries,spouses do not have to take immediate RMDs unless they too are 70 ½. The spouse can either “rollover” the plan to his or her own IRA, create an “inherited” IRA, or Disclaim the funds and transfer themto the Contingent Beneficiaries. If the contingent beneficiaries are children it is preferrable to name aSee-Through Trust as the contingent beneficiary, and name the children as beneficiaries of the Trust.The children will receive the benefits of holding funds in Trust, such as creditor protection, whilesimultaneously maintaining a favorable RMD based on their longer life expectancies. Suggestions for Naming Children as Primary or Contingent Beneficiaries to a Retirement Plan1. Split up IRA accounts so each child is a contingent beneficiary of his or her own account for RMD purposes (this can be done instead of using See-Through Trusts, or can be done after life)2. Younger beneficiaries are able to “stretch” RMDs for longer periods of time due to their increased life expectancy, allowing for a longer period of tax deferral.3. If a child needs the funds now and the retirement plan does not have a Trust as the beneficiary RMD rules won’t matter – they need the money now, so they will take it.4. If the Owner’s estate shall be subject to income in respect of a Decedent consider (1) converting the plan to a Roth IRA to minimize future income taxes, and (2) having desired charitable legacies paid for out of the retirement plan.5. Name a “See-Through Trust” as the beneficiary of the plan. RULE: Even if the non-spousal “inherited” IRA is a Roth IRA the beneficiary MUST begin taking RMDs, even if they are under 70 1/2.LIFE INSURANCENaming the correct Beneficiary ona life insurance policy is veryimportant, particularly when therehas been a divorce. Unlike transfersto ex-spouses by a Will (which areinvalidated by divorce) insurancepass to the named individual in theBeneficiary designation form(because it transfers by “operationof law”). If you are concerned that achild may get divorced it is best tohave the policy pay to a Trust withthat child named Trust Beneficiary. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 9 of 14 
  10. 10. TESTAMENTARY ASSETSTestamentary Assets are those that pass by a Last Willand Testament. These include all assets that don’ttransfer by Operation of Law or Statutory Transfers.Unlike Operation of Law transfers, there is no need tocomplete Beneficiary designation forms: Any asset that isa Testamentary Asset is automatically considered part ofyour “Probate Estate,” and will be transferred by theterms of your Will. Testamentary assets include: Real Estate  Individually  (if not owned  by a trust and  owned bank and  brokerage  not jointly  accounts &  owned) Remember that Testamentary Assets are personal property Business  transferred by a Will. If you have a valid Interests  Will you die Testate and you are the (sometimes) Testator. If there is no Will these assets become “Statutory Transfers” under the laws of Intestacy (see below). If there is a valid Will it is submitted to Probate in the Surrogate’s Court, which then oversees the Probate process. Probate is public, meaning that anyone can view another person’s Will once it is admitted to Probate. For that reason (and many others) most estate planners recommend creating and funding Probate Trusts during lifetime.Testamentary Assets may or may not constitute a large amount of a person’s estate. For a person whojointly owns a house, holds a large amount of funds in jointly-owned bank and brokerage accounts, andhas a decent amount of money in retirement plans, Testamentary Assets may constitute a very smallpercentage of the gross estate.PROBATE (WILLS) v. TRUST ADMINISTRATIONContrary to public opinion, Probate isn’t a “bad thing.” However, Probate can be (1) expensive andtime-consuming. (2) Probate is a completely public affair – you can review everyone’s Will that hasbeen admitted to Probate by the Surrogate’s Court. (3) Probate also requires a substantial amount ofpaperwork to be submitted to the courts, and while court fees are quite reasonable, (4) the legal fees toprepare these documents can be substantial. (5) Probate requires court supervision and oversight.Even under ideal circumstances, (6) distributions of testamentary assets can take many months. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 10 of 14 
  11. 11. Trust Administration is (1) a completely private affair, thus disowned heirs have limited knowledge ofestate distributions. (2) No court paperwork is required, and (3) the court will not interfere unlessthere are formal legal proceedings. (4) Legal fees are substantially less than under Probate. TRUSTS – A SOLUTION FOR LIFE AND THEREAFTERPARTIES TO A TRUSTThere are three (3) parties to every Trust: the Creator (also known as the Grantor or Settlor), theTrustee (and often Co-Trustees or Successor Trustees) and Beneficiaries (and often ContingentBeneficiaries if there could be any remaining Trust assets after the death of the Primary Beneficiaries). Creator / Grantor / Settlor > Creates the Trust > Determines Terms of the Trust > Funds the Trust Trustee Beneficiaries > Manages the trust property > Entitled to the property under > Follows the Terms of the Trust the terms of the Trust > Entitled to a CommissionA person can serve as all three parties at the same time – they can create a Trust, name themselves aTrustee during his or her life, and also be the sole Beneficiary during that time. The largest benefits ofthis arrangement are that (1) if the Creator becomes disabled a Successor Trustee can continue to useTrust funds for the Creator’s benefit without requiring court approval, and (2) upon the Creator’s deaththe Successor Beneficiaries can receive the remaining estate without the need of going through Probateand the associated publicity and expenses of this process. EXAMPLE: Phil and Ruth create Revocable Trusts during their lifetimes and retitle all of their assets to either “The Phil Revocable Trust” as Owner or “The Ruth Revocable Trust” as Owner. They name each other as Co-Trustees and initial Beneficiaries of each other’s Trust. During this entire period either spouse can revoke his or her own Trust (perhaps there is a falling-out with a contingent Beneficiary, and they want to disinherit him). When Phil has a stroke and is in the hospital recovering Ruth is able to use funds from his or her Trust for his medical expenses and other affairs. When Ruth pre-deceases Phil he can (if he is capable) continue administering both his and her Trust for his benefit or have a Successor ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 11 of 14 
  12. 12. Trustee administer the Trust (again, for his own benefit). When the second spouse passes away the Trust can be distributed to the contingent Beneficiaries (here Phil and Ruth’s children) without having to go through Probate.BENEFITS OF TRUSTSWhereas a Creator cannot gain protection Additional Benefits of “Stand-Alone” Trustsfrom his own creditors by placing funds ina Trust, all Trusts, whether they are Stand- Decreased Estate Alone or Testamentary Trusts, allow for Administration costs Creditor Protection for Beneficiaries; just (Avoids Probate & make sure to choose an appropriate Trustee decreases attorney fees)and include the power for them to name a Continuity disinterested Co-Trustee. of control  Avoids the  over Potential Creditors of Your Beneficiaries publicity  property;  associated • The Internal Revenue Service and State with  faster  Tax authorities distributions  Probate• Standard Lenders: Mortgage Company, of estate  funds Credit Cards, etc.• Claimants of Lawsuits against the Minimizing or  Beneficiary completely avoiding • Spouses and Minor Children high Executor  CommissionsAVOIDING ANCILLARY PROBATESome people have to go through Probate in more than one state! A valid Will drafted for a New Yorkdomiciliary may cover a person’s financial and personal property as well as real estate in New York, butwill NOT affectively transfer real estate in another state, such as Florida. Probate or Intestacyproceedings have to take place in this second state for the real estate located there. This process isknown as Ancillary Probate, since the only piece of property being transferred by this second Probate isthe Real Estate. Ancillary Probate leads to a second-round of court filing fees, attorney fees, Beneficiaryinvolvement, etc. By having this second piece of real estate outside of New York owned by a Trust youcan AVOID Ancillary Probate (much like having your Trust own your New York real estate avoidshaving to have it pass through Probate in New York). The Deed to this property outside of New Yorkshould have the Trust named as its Owner to make this strategy affective.MAKING A TRUST “EFFECTIVE”RULE: An unfunded Trust is INEFFECTIVE!!! The most important aspect of having a Trust becomeeffective is both that (1) the Trust document is drafted, and (2) the Trust is named as the Owner of theproperty, which effectively “funds” the Trust, either in the form of a Deed for real estate or as thenamed Owner of a bank or brokerage account. Once these steps have been taken the Trust becomes theOwner of the property, and the Trustee now administers the property under the terms of the Trust. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 12 of 14 
  13. 13. PRACTITIONER’S NOTE: How to Name a Trust as Owner of Accounts and Real EstateThe title of a bank or brokerage account is no longer owned by Sam Smith, but is instead titled as TheRevocable Trust of Sam Smith. If Sam is the Trustee and the Trust names him as Beneficiary Sam canuse Trust funds however he desires. The Deed to your house or vacation home in Florida is no longer inthe name of Cindy Jones, but is instead owned by The Revocable Trust of Cindy Jones. Again, basedon the terms of the Trust, Cindy can live in the house as long as she wants, sell it, rent it out, etc., ANDthe Florida vacation home now avoids Ancillary Probate because it is transferred by a New York Trust.Make sure to fund your Trust! An estate plan that includes a Trust but has no property that isexplicitly owned by the Trust is an ineffective shell; all of the property the Creator thought was ownedby the Trust (and should have been distributed under Trust Administration) will be transferred via Will,Operation of Law or the laws of Intestacy.ESTATE TAX CONSIDERATIONS & “CREDIT SHELTER TRUSTS”A Credit Shelter Trust [“CST”] holds aside a pre-determined amount of money in Trust at the death ofthe Testator or Creator that qualifies up to the federal or state estate tax exemption. The surviving spousecontinues to spend his or her own funds and can invade the CST if needed. In the interim the funds inthe CST grow. Upon the death of the surviving spouse all of the funds in the CST, including investmentgains, pass to the contingent Beneficiaries (typically children or younger family members) estate taxfree. Most people with older estate planning documents have the federal estate tax exemption as thedefining amount of their CST. As already discussed, New York domiciliaries may want this amount tobe defined as the New York estate tax exemption. Also, since stating dollar amounts may lead to futureestate tax inefficiencies (due to ever-changing estate tax exemption amounts) using a Formula Provision(“I leave the then-applicable state estate tax exemption in a credit shelter trust”) will allow for theoptimum amount of desired funds to be transferred in a CST free of estate tax.           ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 13 of 14 
  14. 14. NAMING TRUSTEESCare must be given to the exact powers that fiduciaries can control: Giving complete discretion may leadto tax problems and lack of creditor protection. Due to the wide range of powers available to Trustees Spouses of  Children of  special attention must be given to determining these power the  the  to maintain Beneficiary creditor protections afforded to Beneficiary Beneficiary Trust asets. Since the Grantor will typically name himself as Trustee of his Revocable Trust and has no creditor Beholden  protection the focus should be on naming an appropriate Trustees Successor Trustee. In order to avoid creditors from having a valid, enforceable claim against a Beneficiary one should be careful to avoid people considered “Beholden Trustees” Employees of  Siblings who are  to the Beneficiary. Allowing a Trustee to name either a the  Trustees of each  Successor Trustee or a Disinterested Co-Trustee (I.e. a Beneficiary other’s Trust person or institution with no interest in the Trust other than Trustee commissions) should avoid this consequence. ATTORNEY ADVERTISING Timins & Durante, LLP Estate Planning in a Nutshell Page 14 of 14 

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