A W E A L T H C O U N S E L C O M P A N Y What Is Estate Planning? Lew Dymond, Jr., Esq.

A W E A L T H C O U N S E L C O M P A N Y Control my property while I’m alive and well. Provide for myself and my loved ones if I become disabled. Give what I have: – To whom I want; – The way I want; – When I want. Minimize the impact of taxes, professional fees, and court costs. Definition of Estate Planning 2

A W E A L T H C O U N S E L C O M P A N Y Common Estate Planning Mechanisms Owning property jointly. Designating a beneficiary. Signing a will or revocable living trust. 3

A W E A L T H C O U N S E L C O M P A N Y Traditional Estate Planning 4 Gross Estate Client’s Will or RLT Non-probate transfers Jointly-owned property Life Insurance IRAs 401(k)s Annuities Planned Distributions Property titled in client’s name Probate Process

A W E A L T H C O U N S E L C O M P A N Y Traditional Estate Planning Often Falls Short of Goals Doesn’t provide for your disability. Doesn’t necessarily give what you have: – to whom you want; – the way you want; – when you want. Certainly won’t avoid probate. 5

A W E A L T H C O U N S E L C O M P A N Y Proper Estate Planning It is not a transaction. It is a process. Involves not only your client; Can influence many generations. 6

A W E A L T H C O U N S E L C O M P A N Y Proper Estate Planning It is not a transaction. It is a process. Involves not only your client; Can influence many generations. WealthCounseling. 7

A W E A L T H C O U N S E L C O M P A N Y Proper Estate Planning Cares for loved ones as if you were still there: With your resource. With your love. With your wisdom. 8

A W E A L T H C O U N S E L C O M P A N Y The Estate Planning Process Education. Design. Drafting Documents. Implementation. 9

A W E A L T H C O U N S E L C O M P A N Y The Estate Planning Process Planning for disability. – Medical Directives. Health Care Power of Attorney. Living Will. HIPPA authorization. – Durable Power of Attorney. – Revocable Living Trust. 10

A W E A L T H C O U N S E L C O M P A N Y The Living Trust A trust is a fiduciary relationship with respect to property subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it. Restatement of Trusts 2nd 11

A W E A L T H C O U N S E L C O M P A N Y The Living Trust Plans for your disability. Provides for your loved ones. Contains your caring instructions. Addresses your fears. Reflects your love and values. 12

A W E A L T H C O U N S E L C O M P A N Y The Living Trust Planning for disability. – Superior to relying solely on a durable power of attorney. Acceptance by third parties. Lack of guidelines. – Less likely to need a guardianship/conservatorship. 13

A W E A L T H C O U N S E L C O M P A N Y The Living Trust Plans for your disability. Provides for your loved ones. Contains your caring instructions. Addresses your fears. Reflects your love and values. Can avoid probate Valid in every state. 14

A W E A L T H C O U N S E L C O M P A N Y The Living Trust Avoiding probate. – Probate administration is very state specific. – Wills do not avoid probate. However, many assets do avoid probate. Clients, attorneys and professionals fail to understanding the importance of asset titling and beneficiary designations. – Ancillary probate needed for out of state property. – Living trust centered estate plans more likely to achieve client’s goals. 15

A W E A L T H C O U N S E L C O M P A N Y Avoiding the Traps of Traditional Estate Planning 16 Gross Estate Client’s Will or RLT Non-probate transfers Jointly-owned property Life Insurance IRAs 401(k)s Annuities Planned Distributions Property titled in client’s name Probate Process

A W E A L T H C O U N S E L C O M P A N Y Avoiding the Traps of Traditional Estate Planning 17 WealthCounsel, LLC

A W E A L T H C O U N S E L C O M P A N Y The Living Trust Plans for your disability. Provides for your loved ones. Contains your caring instructions. Addresses your fears. Reflects your love and values. Can avoid probate Valid in every state. Private and confidential 18

A W E A L T H C O U N S E L C O M P A N Y Last Will of Jackie K. Onassis 19

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A W E A L T H C O U N S E L C O M P A N Y The Living Trust Maintaining privacy. – Upon death, wills become a public document. Many states have a statutory requirement to file a will even if there is no probate. With rare exceptions, probate files are open to the public. – Private information has become a commodity. – Do clients really want the planning they have put in place for their loved ones to become public information? 22

A W E A L T H C O U N S E L C O M P A N Y How to Distribute to Your Heirs No protection. Creditor protection. Predator protection. “Self” protection. Estate tax protection. 23 Outright In Trust

A W E A L T H C O U N S E L C O M P A N Y Basic Estate and Gift Tax Rules It’s a transfer tax on everything you own.* Estate and gift taxes are a flat 35%.** $13,000 annual exclusion.*** Unlimited marital deduction. $5,120,000 unified credit.**** Unlimited charitable deduction. Use it or lose it. 24 *All of this is subject to change. ** Under current legislation in 2013 graduated rates up to 55% ***Indexed for inflation. ****Under current legislation becomes $1M in 2013.

A W E A L T H C O U N S E L C O M P A N Y Basic Federal Estate Tax and Gift Tax Rules Rules of the Game Going Forward: – What can we expect between now and 2013? Definitely a political football. The one aspect of TRUIRJCA targeted by House Democrats. – Possibilities: Permanent extension of TRUIRJCA - $5M and 35% rate. Permanent extension of EGTRRA $3.5M and 45% rate. Permanent repeal. Sunset - $1M exemption graduated rates up to 55%. – Temporary or long-term. Temporary extension of TRUIRJCA – 2 years. 25

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