What You Need to Know About Estate Planning - Pt 2

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What You Need to Know About Estate Planning - Pt 2

  1. 1. WhatYou Need to Know About Estate Planning™ Jim Eagar Attorney & Counsellor at Law Part 2 Wednesday, October 9, 13
  2. 2. Quick Review 3 Step Process Wednesday, October 9, 13
  3. 3. People Are Different #1 - Base Your Plan on Counseling, not Word Processing Wednesday, October 9, 13
  4. 4. Things Change #2 - Be Part of a Formal Update & Education Program Wednesday, October 9, 13
  5. 5. We’re All Going to Die #3 - Plan for a Controlled Transfer Process Wednesday, October 9, 13
  6. 6. Estate Planning Problems to Solve 1. Mental Disability Planning 2. Transfer Assets at Death 3. Avoid Estate Taxes 4. Personal Planning Goals Wednesday, October 9, 13
  7. 7. Estate Planning Options • No Documents (Joint Tenancy) • Simple Will & Power of Attorney • Basic Living Trust & POA • Family Lifetime Planning Process™ Wednesday, October 9, 13
  8. 8. 1. Disability Protection Wednesday, October 9, 13
  9. 9. No Planning = “Living Probate” • Loss of Control to Judge • When I’m disabled • Who will control • What they can do • High Cost of Conservatorship Wednesday, October 9, 13
  10. 10. Problems with POAs • Blank Check • No Instructions • No Reporting Requirements • Springing or Immediate Wednesday, October 9, 13
  11. 11. Bare-Bones Trusts • Depend on POA • No Instructions • Basic Planning Wednesday, October 9, 13
  12. 12. • How/Who Makes the Decision • Private Transfer to WhoYou Select • Personalized Instructions forYour Care • Personalized Design Session Family Lifetime Planning Process™ Wednesday, October 9, 13
  13. 13. 2. How Assets Transfer • Contract • Operation of Law • Probate • Living Trust Wednesday, October 9, 13
  14. 14. Everything in Estate Planning Comes Down to Title! •Tax Savings • Personal Protections • Disability Protection • Remarriage Protection • Divorce Protection • Creditor Protection Wednesday, October 9, 13
  15. 15. • Two Things to Know: • Unlimited Marital Deduction “Bill Gates” • The “Coupon” Federal & State Exemptions 3. Estate Tax Reduction Wednesday, October 9, 13
  16. 16. A Trip to the IRS Supermarket Husband Wife Wednesday, October 9, 13
  17. 17. • Property in the supermarket is subject to Estate Tax • Property out in the parking lot is NOT subject to Estate Tax • Goal: Get Property out in the parking lot! Estate Tax Reduction Wednesday, October 9, 13
  18. 18. •Coupon Amount •Credit Shelter Trust •B Trust •Bypass Trust The Family Trust Family Trust Wednesday, October 9, 13
  19. 19. •Split Decedent’s Estate into Two Trusts •Transfer up to Coupon amount in Family Trust, put excess in Marital Trust Trustee Instructions Marital Trust (Tax Deferred) Family Trust (Tax Free) Wednesday, October 9, 13
  20. 20. •Things Change •Ability for limited change after 1st Death Limited Power of Appointment Wednesday, October 9, 13
  21. 21. Tax Savings Determined By: • The Amount of the Coupon (Applicable Exclusion Amount) • The Funding of the Family Trust Family Trust Wednesday, October 9, 13
  22. 22. Marital Trust Family Trust RLT Husband Wife Joint Insurance 401(k) IRA Wednesday, October 9, 13
  23. 23. Marital Trust Family Trust Will Husband Wife Joint Insurance 401(k) IRA Wednesday, October 9, 13
  24. 24. Personal Instructions for Clients • Easier to Edit than Create • Design Process: Education/Choices • Checklists for: • Health Care Decision-Making • Final Arrangements • Guardian Instructions Wednesday, October 9, 13
  25. 25. Personal Instructions for Beneficiaries •Protection Against Life Risks •Transfer ofValues: •Personal Guidance & Instructions •Family Legacy Wednesday, October 9, 13
  26. 26. Life Risks for Beneficiaries •Lack of Financial Discipline •Lack of Financial Experience •Failed Marriage •Remarriage of Surviving Spouse •Catastrophic Creditors Wednesday, October 9, 13
  27. 27. Inheritance Reception A formal process designed to assure you and your loved ones that your true wealth is realized, efficiently transferred and effectively received Wednesday, October 9, 13
  28. 28. Access & Control You WantYour Benficiaries to : •Access inheritance •Control inheritance Wednesday, October 9, 13
  29. 29. Trust Protection Mindset At What Age is it OK for: •Ex-Spouse to get 50% of inheritance? •Creditor to get all of the inheritance? Wednesday, October 9, 13
  30. 30. Trust Design •Access and Control by Beneficiary •Protections from Divorce & Creditors •Watching Both Ways When Crossing the Street •Balancing Access and Control Wednesday, October 9, 13
  31. 31. Trust Design •Access and Control by Beneficiary •Protections from Divorce & Creditors •Customized Instructions to Fit Beneficiary Leaving Inheritance Inside of Protective Trust Provides: Wednesday, October 9, 13
  32. 32. • Appropriate Trust Design Balances Access & Control with Personal Protections • After Education, Most Choose a Protective Trust (“school bus trust”) even for Adult Beneficiaries Wednesday, October 9, 13
  33. 33. •People are Different •Things Change •We’re all Going to Die Why Plans Don’t Work Wednesday, October 9, 13
  34. 34. Need A Process! Wednesday, October 9, 13
  35. 35. Three-Step Process #1 Counseling, not Word Processing Wednesday, October 9, 13
  36. 36. Three-Step Process #2 Formal Update & Education Program Wednesday, October 9, 13
  37. 37. Three-Step Process #3 Plan for a Controlled Transfer Process Wednesday, October 9, 13
  38. 38. 3 Levels of Service • Basics Plan • Foundational Plan • Family Protective Plan™ Wednesday, October 9, 13
  39. 39. The Next Step • Meeting • (541) 244-2157 Wednesday, October 9, 13

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