ESTATE PLANNING SEMINAR Harley K. Look, Jr. Katz, Look & Moison, P.C Lincoln Street, Suite 1100 Denver, CO

No Legal Advice These seminar materials and the seminar presentation are intended to educate, and are provided for informational purposes, only. The materials and the comments made by the presenter do not constitute legal advice and may not be relied upon in any particular fact pattern. The seminar host, presenter, and their employers and employees do not assume any responsibility for any reliance on the information presented in association with this seminar. Each seminar attendee should independently verify all statements made in this seminar and seek independent advice before using any seminar information.

Four Ws WWWWWWWW

Who - Who receives the benefits? W

WHO ? Attorneys Funeral/Burial/Cremation IRS Creditors Family

WHO ? Family ½ Spouse½ Children

CHOICE  What happens if you do not have a Will? Guardians for minor children. Foster home? Minors are legally incapacitated. Inflexibility. Courts. Intestacy. Attorneys. Children are adults at 18.

WHO? No Spouse or Children Parents

WHO? No Parents SiblingsNieces & Nephews ChildrenParents Laughing Heirs State

CHOICE What is your choice?  Who do you want as your beneficiaries?  Who do you want to handle your estate?

CHOICE  Escheat - State of Colorado.  Personal Representative - Creditors?  Where do we find friends or charities? NOWHERE!

Four Ws  Who  What  W

WHAT ?  What is the nature of the property? –One farm, ranch or business.  Where is the property located? –All in Colorado ( Uniform Probate Code) –Other than Colorado (Ancillary Probate)  Do you have a personal property memorandum?

Four Ws  Who  What  When  W

CHOICE  Timing is important. EXAMPLE  You have a wife and two children.  Your son is through college but your daughter is not.  What ages do you want for distribution to your children?

CHOICE  TRUST = PROTECTION  Protection from: – The courts –Themselves TRUST

CHOICE  You get to pick whom you trust = TRUSTEE

CHOICE TRUST DISTRIBUTION* Two Children SonDaughter 1/3 rd at 25 1/3 rd at 30 & 1/3 rd at 35 * This is determined in your discretion.

Four Ws  Who  What  When  Way

CHOICE  A WILL IS A WAY  The Will is a tool –It disburses only on death  A Trust to control beyond death  Gift $13K per year per beneficiary  A seminar focuses on the WAY –A planner doesn’t know the other three Ws until the planner meets with the client.

CHOICE  There are thousands of ways. We will organize them into three categories: 2. Direct Transfer- Beneficiary Insurance Retirement Benefits 401(k) IRAs Annuities Payable on Death Beneficiary Deed 3. Probate 1. Title- Joint Tenancy (WROS)

What is Probate  Probate is to prove the validity of the Will, whether it’s yours or the state’s.  Colorado has the Uniform Probate Code II –Simplified process

Typical Situation It usually passes from husband to the wife to the children.

Unlimited Marital Deduction If it goes from husband to wife*, there is an unlimited marital deduction and there is no estate tax. * A U.S. Citizen

CHOICE  Non-probate transfers. If the property is in joint tenancy or directly transferred, then there is no probate.  No Probate = No Problem?

PROBLEM New Husband/ New Wife Attorneys IRS $500,000 estate Step Children Creditors Courts Third Parties

EXAMPLE  Estate worth: $2.0 Million  The tentative tax in 2011:$ 780,800  Applicable Credit in 2011; tax on $1.0 Million= $ 345,800 $ 435,000  Net Tax due= $ 435,000 9 months after death

SOLUTION ESTATE PLANNING TABLE Financial Planning Legal Planning No Planning Income Health Long Term Care Life Insurance WillMess Living Will 15 years in court HCPOA* +HIPAA Attorney appointed by court DGFPOA*Court - $650,000

SOLUTION ESTATE PLANNING TABLE Legal forms vs. legal services DGFPOA- Durable General Financial Power of Attorney HCPOA- Health Care Power of Attorney plus HIPAA Authorization and Release These two documents, along with the Living Will are legal seatbelts.

Trust Protection It usually passes from husband to the wife. NO TAX Shelter $250,000 Don’t leave assets to each other, leave assets for each other. TRUST Then to the children. Potential TAX

PROBLEM New Husband/ New Wife Attorneys IRS $500,000 estate Step Children Creditors Courts Third Parties

CHOICE  Ways: –1.Title- Owner –2.Direct Transfer- Beneficiary Insurance Retirement Benefits 401(k) IRAs Annuities Payable on Death Revocable Living TrustRevocable Living Trust –3.Probate Testamentary Trust

CHOICE  Trust = Protection Husband & Wife - Trustees Survivor - Trustee Survivor + Children Co-Trustees Children- Unlimited Growth- No Estate Tax Less than or equal to $3.5 Million - exemption $3.5 Million exemption Age $7, 000,000.00

Four Elements of a Trust 1. Owner 2. Trustee 3. Beneficiaries 4. Assets

CHOICE  There are thousands of ways  We will break it into three categories: –1.Title - Owner –2.Beneficiary Insurance Retirement Benefits 401(k) IRAs Annuities Payable on Death –3.Probate FUNDING* * Funding is important!

FUNDING  Put Assets in the Trust –Retirement –Insurance –Investments –Deeds

WHERE DO YOU GO NOW ?  Review current documents  Research internet –Martindale Hubbell –Lawyers.com  Review their grading system AV BV CV

SUMMARY  4 Ws  Benefit of planning  Choices  Four legs  Powers of Attorney  Probate  Trusts  Funding  Advanced Planning

THANK YOU Harley K. Look, Jr. Katz, Look & Moison, P.C Lincoln Street, Suite 1100 Denver, CO