1 Farm Succession Planning. 2 Marsha Goetting Ph.D., CFP, CFCS èProfessor & Extension Family Economics Specialist èDepartment of Agricultural Economics.

Slides:



Advertisements
Similar presentations
The Federal Gift and Estate Tax And Financial Planning  Terminology  Outline of the Federal Estate and Gift Tax  Sample Problem  Life Insurance and.
Advertisements

1 American Indian Probate Reform Act of 2004 (AIPRA)
Legal Issues: Property Ownership. Property Ownership Two major or key points: 1. Degree of ownership interest. 2. Relationship between the co-owners if.
Private Annuity Chapter 36 Tools & Techniques of Estate Planning Copyright 2011, The National Underwriter Company1 An arrangement between two parties,
Overview of Estate/Gift Tax Unified Rate Schedule Single unified transfer tax applies to estates/gifts (post 12/76) – until 2003 why? Rates range from.
Living Wills, Health Care Proxies,
Preneed Preplanning Advance Funeral Planning. Terms Prearranged vs. Prefunded Guaranteed vs. Nonguaranteed Revocable vs. Irrevocable.
Overview of Estate/Gift Tax Unified Rate Schedule Single unified transfer tax applies to estates/gifts (post 12/76) why? Rates range from 18% to 40% -
22 Estate Planning Tools & Tips: Avoiding Probate with Beneficiary Deeds, PODs, TODs, and other Beneficiary Designations April 19, 2012.
1 MT200707HR Beneficiary Deeds in Montana. Marsha Goetting Professor & Extension Family Economics Specialist MSU Dept. of Agricultural Economics & Economics.
Montana Uniform Transfers to Minors Act (UTMA) Custodial Accounts for Children Under 21 years of age Revised May 2012 MontGuide
Managing for Today and Tomorrow Succession, Business, Estate, and Retirement Planning for Farm and Ranch Women Managing for Today and Tomorrow Estate Planning.
FOR BROKER/DEALER AND GENERAL AGENT USE ONLY.1 Basic Estate Planning Strategies Manulife Financial and the block design are registered service marks and.
1 American Indian Probate Reform Act of 2004 (AIPRA)
What is Estate Planning? Presented by: Daniela Lungu Attorney at Law.
© 2015 Barnes & Thornburg LLP. All Rights Reserved. This page may be freely copied and distributed if kept intact and the copyright notice appears. This.
Montana Common Law Marriages & Estate Planning 1 Marsha A. Goetting MSU Extension Family Economics Specialist.
Documents: Wills Duke Legal Project. Purposes of a will Transfer property Name an executor to handle transfer of property Name a guardian for minor children.
PART 5: LIFE CYCLE ISSUES Chapter 17 Estate Planning: Saving Your Heirs Money and Headaches.
1 Managing Property Title Risks for Montana Farm/ Ranch Operators Western Center for Risk Management Education.
1 Letter of Last Instruction December Marsha Goetting Professor & Extension Family Economics Specialist MSU Dept. of Agricultural Economics &
1 National Risk Management Education Conference Phoenix, AZ April 17 & 18, 2007.
1 Women in Agriculture Risk Management Education Conference Oklahoma City April 1 & 2, 2008.
1 Wealth Preservation Planning for Clients and their Families March 2009.
1 George Washington University Estate Planning Essentials October 2, 2010.
1 11 MSU Extension Estate Planning Publications Main Author: Marsha A. Goetting Ph.D., CFP ®, CFCS  Professor & Extension Family Economics Specialist.
Estate Planning Mark Ricklefs CLU ChFC CFP. Caveat This presentation is for informational purposes only. The speaker appearing at this meeting is solely.
Transfers at Death Wills February 14, 2008 Rachel Kirk.
1 11 MSU Extension Personal & Family Financial Management Publications.
1 American Indian Probate Reform Act of 2004 (AIPRA)
McGraw-Hill/Irwin Copyright (c) 2002 by the McGraw-Hill Companies Inc Principles of Taxation: Advanced Strategies Chapter 14 Chapter 14 The Transfer Tax.
Estate Planning A Guide to Understanding Estate Planning.
©2013, College for Financial Planning, all rights reserved. Module 11 Estate Planning Chartered Retirement Planning Counselor SM Professional Designation.
Trust Basics By Jingang Xu (internal training use for Anna Li’s team only)
Chapter 18 Estate Planning. Copyright © Houghton Mifflin Company. All rights reserved.18 | 2 Learning Objectives 1.Identify the ways that your estate.
1 Chapter 12 Estate Planning Ken Long New River Community College Dublin, VA 24084
© 2004 ME™ (Your Money Education Resource™) 1 Estate Planning Chapter 12: Special Elections and Post Mortem Planning.
©2015, College for Financial Planning, all rights reserved. Session 5 The Federal Estate Tax CERTIFIED FINANCIAL PLANNER CERTIFICATION PROFESSIONAL EDUCATION.
Estate Planning Parman R. Green University of Missouri Extension Ag Business Mgmt. Specialist
Who Gets Grandma’s Yellow Pie Plate?? MontGuide MT199701HR 1.
Co-ownership of Real Property Tenancy by the Entirety Joint Tenancy Tenancy in Common.
Wills and Trusts Ann Sanok, Instructor. The Journey Ahead.... Over the next ten weeks, you will study the laws of real property, wills, trusts, and estate.
Chapter Title Chapter # Tools & Techniques of Estate Planning Data Gathering and Analysis Chapter 2 Tools & Techniques of Estate Planning Copyright 2011,
1 National Risk Management Education Conference Phoenix, AZ April 17 & 18, 2007.
Estate Planning: Concepts and Strategies
Non U.S. Persons in the Estate Plan Chapter 20 Tools & Techniques of Estate Planning Copyright 2011, The National Underwriter Company1 What is it? Note:
Emerson Process Management 8100 West Florissant Avenue St. Louis, Missouri ESTATE PLANNING PRESENTATION May 22, Kimberly B. McDermott.
Survivorship Life  Characteristics  Also called second-to-die, last-to-die, joint life  Pays a death benefit upon the death of two or more insured’s.
McGraw-Hill© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
1 National Risk Management Education Conference Phoenix, AZ April 17 & 18, 2007.
Co-ownership of Real Property Tenancy by the Entirety Joint Tenancy Tenancy in Common.
Charitable Uses of Life Insurance Chapter 28 Tools & Techniques of Life Insurance Planning  What is it?  Transfer of cash, or other property to.
Charitable Contributions Chapter 32 Tools & Techniques of Estate Planning Copyright 2011, The National Underwriter Company1 Gratuitous transfers of property.
1 American Indian Probate Reform Act of 2004 (AIPRA)
Cash and Cash Equivalents Chapter 1 Tools & Techniques of Investment Planning Life Insurance and the Generation-Skipping Transfer Tax Chapter 25 Tools.
Marital Deduction and Bypass Trusts Chapter 24 Tools & Techniques of Estate Planning Copyright 2011, The National Underwriter Company1 Marital Deduction.
RETIREMENT AND ESTATE PLANNING Chapter 15. Defining Your Retirement Needs How much income do you need? Keep the house or move? What type of investment.
THE BASICS OF ESTATE PLANNING FOR FARMERS Connie S. Haden.
Joe & Mary Client April 11, Objectives To educate you on the Joe & Mary Client estate plan To measure the impact inheritance may have on your life.
Chapter © 2010 South-Western, Cengage Learning Retirement and Estate Planning Planning for Retirement Saving for Retirement 15.
Estate Planning Katherine O. VanZanten Cable Huston LLP Portland 1001 SW 5 th, Suite 2000 Portland, OR (503)
Estate Planning February 2016 Douglas A. Mielock Foster, Swift, Collins & Smith, P.C. Lansing, Michigan.
Estate Planning. Estate planning n Goals and objectives n Reviewing current plan n Passing property at death n Probate n Estate taxes (federal, state)
Estate Planning Kim Scouller
Types of Property Interests
By Jingang Xu (internal training use for Anna Li’s team only)
Co-ownership of Real Property
Presented by: Daniela Lungu Attorney at Law
MSU Extension Estate Planning Publications
MSU Extension Personal and Financial Management Publications
Presentation transcript:

1 Farm Succession Planning

2 Marsha Goetting Ph.D., CFP, CFCS èProfessor & Extension Family Economics Specialist èDepartment of Agricultural Economics & Economics

3 Special Request from: Members of Planning Committee

4 Make your estate planning presentation!!!!!! n Lively n Interesting n Exciting

5 Don’t want to think about  Death  Dying

6 Experiment Succession/Estate Planning Team Contest u Valuable prizes !!!

7 n people Divide into Groups

8 First Decision n Select Team Name u 30 Seconds

9 Second Decision – Select Team Runner n Each time your team responds to a question ò Write team name & answer on sticky note RavalliRaiders 50%

10 n Rewards u “Winning Team” F gets to select prizes at the end of the session

11 “Who” Gets Your Property When You Die????

12 State Law Determines

13 Titled Real Property includes: n Land n Home

14 Titled Personal Property includes: n Savings & Checking Accounts n Certificates of Deposits n Motor Vehicles n Stocks & Bonds

15 Property passes by: n Contract Law n Written Will n Law of Decent & Distribution n Trust Agreement

16 Contract Law n Beneficiary Designations u Life insurance u Annuities u IRAs u Keogh

17 Life Insurance n Bill n Vere

18 Beneficiary n Bill has $100,000 life insurance policy n Designates Vere as his primary beneficiary

19 Bill’s Will n “I bequest all my life insurance proceeds to my son, Chris Shelton.”

20 Who gets $100,000? n Vere, wife? n Chris, son?

21 $100,000 Life Insurance Proceeds n Vere n Contractual arrangement u Designated Beneficiary

22 Estate Planning Task n Determine who are the beneficiaries of your life insurance policy/policies

23 Payable on Death Designation (POD) n Accounts at financial institutions n At death ownership passes to POD beneficiaries

24 Transfers on Death (TOD) Registration n Stocks n Bonds n Mutual funds

25 Dying Without a Will: Who Receives Your Property?

26 PERSONAL PROPERTY No matter where located, distributed according to laws of state in which decedent had domicile at time of death.

27 REAL PROPERTY Located outside state of residence distributed according to that state’s intestacy laws.

28 Estate Planning Task n What & Where u Determine in whose name is on title of real & personal property u Location

29 Business Arrangements Census, Washington Sole proprietorship/family 85% Partnership 6% Corporation 8% Estates/trusts, other 1% 40,033 farms

30 Single Person Property in one person’s name only. Part of owner’s estate upon death.

31 Single Person Mother 1/2 Dad 1/2 Single Guy/Gal

32 What fraction (if any) will brother receive? No Written Will

33 Team Question n What share if any does Bother receive?

34 What fraction (if any) will brother receive? No Written Will

35 ? Right of Representation

36 Married Couple n John & Mary property titled John’s name only (sole proprietorship) No childrenNo children

37 Auto Accident n John dies first n Mary dies 3 days later

38 Team Question n Who receives the property?

39 Who Receives? n John dies first n Mary dies 3 days later

40 Who receives????? n John dies first n Mary dies 3rd Day n Mary’s relatives receive property

41 Need for will n John & Mary need a written will F if they want to control who receives their property

42 JOINT TENANCY Real Property

43 JOINT TENANCY n On death of either, survivor takes all

44 JOINT TENANCY

45 Husband dies: Survivors, wife surviving joint tenant; his children

46 Husband dies: Survivors, wife surviving joint tenant; his children

47 Wife dies with all property

48 Wife dies with all property

49 Remarriage with husband as joint tenant husband

50 Husband dies: Survivors, wife surviving joint tenant; his children

51 Life Estate Remaindermen

52 Estate Planning Task n Review titles on real property

53 Family Tree

54 Question: What fraction, if any does grandchild receive? ?

55 Survivors : 3 children

56 Survivors : two children & grandchildren Right of Representation

57 Survivors : one child & grandchildren Right of Representation

58 Survivors : One child & grandchildren ? Right of Representation

59 Survivors : Grandchildren

60 Written Will

61 Question n What % of Americans die without a written will?

62 7 out of 10 do not have a will

63 Requirement n Sound mind u Know nature of property u Know those to whom he/she would give property

64 “Being of sound mind I spent it all.” Here is your DAD’S will

65 MAKING A WILL n Undue Influence

66 Adopted Children á Have same rights as your biological children

67 MUST a parent leave his/her children anything? NO!

68 “To my son I leave the pleasure of earning a living. For 25 years he thought the pleasure was mine. He was mistaken.” Dad’s Will

69 Heinrich Heine Made his wife sole beneficiary on the condition that she remarry because then “ there will be at least one man to regret my death ”

70 Non-Titled Property Owner is not identified with a written document

71 Non-titled property: n Guns n Tools n Furniture n Dishes n Linens & needlework n Collections

72 Personal Belongings n Wedding photographs n Baseball glove n Books n Christmas decorations n Jewelry

73 Washington Separate Listing Tangible Personal Property

74 Separate ListingItem my Grandma Ray’s Opal Ring my niece, Bethany Buczinski my Montana Sapphire Ring my friend, Barbara Miller DateSignature

75 Where to keep a will?? n Clerk of Court office n Attorney’s office n Safe deposit box n Don’t store original at home

76 Where is the will? n Inform family members or personal representative

77 Wills ????

78 Question n What % of deceased persons’ estates paid a federal estate tax in 2003?

79 Federal Estate Tax n 2 %

80 Federal Estate Tax Exclusions & Credits

81 Planning Technique Die in appropriate year !!!

82 Single Person-- Applicable Credit

83 Spouse takes all n Surviving spouse who takes unlimited marital deduction

84 $4 Million Estate (2007)-- Unlimited Deduction

85 Wife: $4 Million 2007

86 Instead take: n Partial u equal to amount of exclusion/credit n Leave rest to family trust with spouse income

87 Use Dad’s Applicable Exclusion on 4M Estate

88 Mom’s Estate

89 Estate Size $4,000,000 n Tax Savings With Planning u $920,000

90 Concern n What if….. Mom marries the “hunk” down the road?

91 Concern n What if……… Dad marries the “floosie” down the road?

92 Another approach n Q-tip Trust u Amount of exclusion/credit

93 Use Dad’s Applicable Exclusion on 4M Estate

94 Mom’s Estate

95 Estate Size $4,000,000 n Tax Savings With Planning u $920,000

96 Team Question n Value of John’s gross estate for federal estate tax purposes? u $2,500,000 Living Trust u $ 100,000 Saving Bonds/POD Wife u $ 150,000 Joint Tenancy/Son u $ 250,000 Life Insurance Policy u $ 500,000 Tenancy in Common with spouse

97 Team Question n Value of John’s estate? u $2,500,000 Living Trust u Included

98 Team Question n Value of John’s estate? u $100,000 Saving Bonds/POD Wife u Included

99 Team Question n Value of John’s estate? u $150,000 Joint Tenancy/Son u All included, unless contribution shown

100 Team Question n Value of John’s estate? u $250,000 Life Insurance Policy u Included

101 Insurance Proceeds included in estate if: n Receivable by estate n Receivable by another for benefit of estate n Decedent had incidents of ownership

102 $2.75 Million Estate $250,000 Policy 2007 Parent Owned

103 Parent Owned Policy-2007

104 $2.75 Million Estate Child Owner of Policy

105 Federal Estate Taxes Saved on $250,000 policy n Adult child as owner of policy save $115,000

106 Team Question n Value of John’s estate? u $500,000 Tenancy in Common with spouse u ½ half included u $250,000

107 John’s Estate Value $3,500,000 Exemption 2007 $2,000,000 ***$690,500 due in tax

108 Federal Gift Tax

109 Question n What is the amount that can be gifted yearly without a federal gift tax?

110 Annual Gifts $12,000 n To as many people as you wish n Tax free

111 Gift-splitting n Spouse may join in gift $24,000

112 Federal Gift Tax Exclusions & Credits

113 n Rewards u Winning Team

114 Marsha A. Goetting MSU Extension Family Economics Specialist P. O. Box Montana State University Bozeman, MT

115 Marsha A. Goetting