Estate Planning Protecting your family’s future

Definitions  Your estate consists of what you own at your death  Your estate plan is a blueprint of how you want your financial and personal affairs handled at your death

Goals of Estate Planning  Control  To protect your family’s future –Financially –Emotionally

Estate Planning involves making decisions about  Your property  People who depend on you for support  Possible future incompetency  Long term nursing care  Health care you may or may not want  Funeral, cremation, or memorial arrangements

Key documents in an estate plan  Will  Durable power of attorney  Health care power of attorney  Living will  Trust

Wills  Witnessed will  Holographic will Anyone who dies without a will is subject to the law of intestate succession

Estate planning issues Things to think through before consulting a lawyer  Who gets your property  Who will serve as your personal representative  Who will raise your minor children  Will your estate have a tax problem  Will a minor inherit your property  Is a trust right for you

Who gets your property Give this some time and thought  Inventory assets and determine ownership  How do you want your property divided  What happens if a beneficiary dies before you  What is your spouses share

Type of property ownership  Joint tenants with right of survivorship  Tenants by entirety  Tenants in common  Sole ownership

Choosing a personal representative Three names for the same person  Executor-the person you name in your will  Administrator-court named  Personal representative-includes both the above

Duties of Personal Representative  Collects and inventories property  Distributes property according to will  Pays bills and collects debts  Files tax returns

Choose executor wisely Some factors to consider  Ability to do the job  Convenience  Willingness to do the job  Ability to keep peace with family members  Legal requirements

Who will raise your minor children? A minor is a child under 18 years of age  Use your will to recommend a guardian for minor children

Will your estate have a tax problem? A little planning can help the problem Estate includes the fair market value of all property owned at the date of death  Cash  Real estate  Stocks & bonds

Federal Estate Taxes  2009 rate is 45%  Unified credit exempts the first $3.5M  In 2010, no estate taxes will be collected  In 2011, only $1M exempt If your estate is greater than this consider transferring ownership by gifts, either cash or life insurance

Avoiding Taxes?  Give up to $13,000 per calendar year per recipient without paying gift tax.  Set up a trust -AB—in trust for children, but spouse can use it -QTIP—postpone taxes until second spouse dies -charitable trust

Families and Inheritance  Inheritance is not simply an economic and legal issue.  Complex emotional and family relationships impact decision making.  Inheritance decisions involve economic and emotional consequences. They can enhance or destroy family unity.

Plan Early—And Often Make sure your wishes are carried out by distributing property yourself—give it to who you want now. If you don’t give it now, leave clear instructions on what you want to happen.