BUS 206 CARISSA STOUT NICOLAS ASCANIO MATT JUDKINS Estate Planning

What is Estate Planning? - Defined as the legal process of accumulation, management, conservation, and transfer of wealth, considering legal, tax, and personal objectives. In short- it’s financial planning for death

It is Important to Remember… Estate planning can be difficult because of emotional issues. Objectives should include efficient transfer of assets (to minimize costs)  (costs include opportunity costs, transfer of taxes, documents, probate costs) Transfer of assets should go to desired beneficiary.  Survivorship rights eliminate conflicts between will and property title  Legal contracts can eliminate conflicts between will and named beneficiaries.

Who Needs Estate Planning? Persons who have-  Spouses  Children under 18 ( minors )  Dependents ( parents, handicapped individuals, children )  Substantial Assets  Charitable Objects  Specific items of worth (intend to go to someone in particular) (ex. Jewelry)  Post Death Issues  Pets  Businesses  Unrelated persons (life partners)

The Estate Planning Process Determine your need for an estate plan  Family Situation  If you have minor aged children  If you have disabled children  If you don’t have any children  If you’re in a second (or later) marriage and have a blended family  If you’re spouse has recently died  If you’ve recently divorced  Financial Situation  If you own one or more businesses  If you have significant assets in your 401(k)/IRAs  If you own a significant amount of life insurance  If you’ve, inherited or will be inheriting, a significant amount of assets

The Estate Planning Process Find a qualified estate planning attorney Build your Foundational Estate Plan  Will include 4 or 5 legal documents  Last Will and Testament  Revocable Living Trust  Medical Power of Attorney  Living Will  Financial Power of Attorney

The Estate Planning Process Assess your need for an Advanced Estate Plan  If you’re single and your net assets exceeds $2 million.  If you’re married and your combined net assets exceeds $4 million.  If you want to create an education fund for your grandchildren or children  If you desire to leave some or all of your estate to charity Maintain and Update your Estate Plan  Should be looked at every year or two to determine if changes are needed

The Estate Planning Team The Attorney  Should specialize in estate planning. They will be making drafts of the wills and trusts as well as providing legal advice The Accountant  Knows the most about your finances, can foresee and discuss the tax consequences of the plan The Insurance Agent  Provides expertise on ways to integrate insurance into the plan Trust Officer  Duties include conserving and managing estate assets. Helps set up and maintain trust arrangements.

Advantages and Types of Wills Advantages: An executor can be named Can transfer property to anyone desired Ensures the maximum marital deduction if decedent wants property to pass to spouse Can specify how estate taxes are apportioned Can designate guardians for minors Can contain provisions to establish trusts Charitable beneficiaries can be named Types of Wills Include: Holographic or handwritten will --this type of will is recognized by half of all states Nuncupative or oral will --recognized by less then half of all states Statutory or formal will (recommended) --is drawn up by an attorney and is universally recognized

Do I Really Need A Will? When a person dies without a will this person is said to have died Intestate. This persons assets now lie in the hands of the probate court who will divide property and assets according to certain set formulas. This may lead to an estate being divvied up in ways the deceased did not intend, as well as a host a legal fees for living relatives. If no surviving relatives exist (which is very rare) the estate will go to the state by Right of Escheat. Friends and charities will get nothing at all. The basic message here is that everyone should take the time to make a will and plan for the future of their estate.