1. USC Office of Gift Planning
BASIC CALIFORNIA
ESTATE PLANNING
_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Lindsay Sellers, J.D.
USC Office of Gift Planning

2. TODAY’S TOPICS
Planning starts with goals & values – strategies & techniques follow
Everyone should have an estate plan
Planning for potential diminished capacity
Update on 2014 Estate and Gift Tax
Communicate with family and advisors

3. GOALS AND VALUES Set your goals Communicate your values –
in words, deeds and estate plan
Strategies and techniques follow goals and values

4. ESSENTIAL ESTATE PLAN Everyone needs an estate plan
Foundational documents:
A Will
Revocable Living Trust
Power of Attorney for Financial Matters
Power of Attorney for Health Care

5. LAST WILL AND TESTAMENT
Most Wills are “pour over” Wills used in conjunction with an existing revocable Living Trust
If a Will is used as the only estate planning document, it will have to be submitted to the local Probate Court at death for a supervised administration process (2-3 years)
Executor administers a Will and may have to post a “bond”

6. REVOCABLE LIVING TRUST
Living trusts can be individual or joint (spouses)
Living trusts may be changed at any time by a signed amendment made by the creator(s) of the trust
Joint living trusts generally become partially irrevocable (i.e. unchangeable) at the death of the first creator
Can be funded during life without altering ability to access , invest, and spend assets
Biggest advantage - fully funded living trusts avoid the need for probate at death of creator(s)
Protection for children of prior marriages
General Assignments

7. ORGANIZATION IS KEY Keep an updated inventory of assets
Keep important documents in a safe place – easy to remember and where others know
Give copies to your advisors

8. “TITLE” TO ASSETS – IMPORTANT
Know how title is held for every asset
“Funded” living trust
Real estate – joint tenancy, community property, tenants in common
Successor beneficiary designations:
Pensions/IRAs/retirement plans
Securities and bank accounts
Life insurance

9. UPDATE YOUR PLAN Tax laws change Your goals and values change
Your family changes
Your advisors change
Your estate planning documents may need to change too!

10. DIMINISHING CAPACITY
Risk of diminishing mental or physical capacity is a reality of aging.
How can you protect yourself?
How can powers of attorney help?
If you have a funded Living Trust, Successor Trustees have the power to continue to administer your assets while you are alive.

11. POWERS OF ATTORNEY Management of Non-Trust Assets During Life
Who should be your attorney-in-fact?
If more than one – must they act jointly?
What powers should they get?
When should they get them? Immediately (i.e. to be able to use it if you are unavailable) or only upon your incapacity?
Can be used to fund a Living Trust prior to death

12. HEALTH CARE POWERS
Communicate wishes with your doctors & person with the power
Fill out forms at hospitals/clinics
California Medical Association – Advanced Health Care Directive Kit
Options:
Organ donation
Life support preferences
Religious or other special directives

13. FIND TRUSTED ADVISORS
Accountant, attorney, financial planner, insurance agent
Select them carefully
Communicate honestly and openly with them
Estimated Legal Costs: $2K-$5K
Follow their advice!

14. 2014 ESTATE AND GIFT TAX Estate tax exemption:
$5,340,000 per person ($10.68M per couple)
“Portability” of spousal exemption
Tax rate – maximum rate of 40%
Gift tax exemption:
$5,340,000 for lifetime gifts
$14,000 annual exclusion amount per donor, per donee
Education and medical expenses

15. WE ALL LEAVE A LEGACY Avoiding Pitfalls from Bad Planning
Caveat - different treatment of relatives in estate plan sometimes alienates family members
California-specific issues - litigation, community property disputes, delays, administrative and probate court expenses
Prop 13 and Prop 58 – exceptions to avoid reassessment of real property for property tax purposes upon a transfer to someone other than your living trust or your spouse

16. WE ALL LEAVE A LEGACY Intangible Benefits of an Estate Plan
Your own peace of mind
Bring and keep family together
Provide for loved ones
Protect your heirs
If important, support philanthropy

17. USC Office of Gift Planning
(213)
usc.plannedgiving.org
Lindsay Sellers, J.D.
Director of Gift Planning