1. The Risley Law Firm Gary Risley 2800 N. Hutton Farmington, NM 87402 (505) 326-1776

2. Copyright 2006 The Risley Law Firm Who Needs an Estate Plan ? Anyone who has property in his name. Anyone who has property in his name. Anyone who is responsible for minor children. Anyone who is responsible for minor children. Anyone who stands to inherit any titled property. Anyone who stands to inherit any titled property.

3. Copyright 2006 The Risley Law Firm How Do I Transfer Property When I Die? Intestate Succession (State provided will.) Intestate Succession (State provided will.) Will Will Trust Trust Non-probate Transfers Non-probate Transfers

4. Copyright 2006 The Risley Law Firm Intestate Succession The State of New Mexico has written a will for you. The State of New Mexico has written a will for you. It may or may not match your desires with regard to your property. It may or may not match your desires with regard to your property. Issues with Administration can arise. Issues with Administration can arise. The State of New Mexico has written a will for you. The State of New Mexico has written a will for you. It may or may not match your desires with regard to your property. It may or may not match your desires with regard to your property. Issues with Administration can arise. Issues with Administration can arise.

5. Copyright 2006 The Risley Law Firm Wills A written document stating your desires concerning your property and/or minor children. A written document stating your desires concerning your property and/or minor children. It is a contract with the state to allow the transfer of property after you die. It is a contract with the state to allow the transfer of property after you die.

6. Copyright 2006 The Risley Law Firm Wills Wills are VERY technical and must be written and executed properly under the state law. Wills are VERY technical and must be written and executed properly under the state law. You get to pick the person who manages your affairs. (PR/Executor) You get to pick the person who manages your affairs. (PR/Executor)

7. Copyright 2006 The Risley Law Firm Wills Will can be used to name a Guardian/Conservator for minor children. Will can be used to name a Guardian/Conservator for minor children. A trust can be established. (Testamentary Trust.) A trust can be established. (Testamentary Trust.) Probate is not the problem in NM that it is in some other states. Probate is not the problem in NM that it is in some other states.

8. Copyright 2006 The Risley Law Firm Non-Probate Transfers Joint Tenancy Joint Tenancy Payable on Death Payable on Death Life Insurance Life Insurance Retirement Plans Retirement Plans Transfer on Death Deed Transfer on Death Deed

9. Copyright 2006 The Risley Law Firm Trusts Two types: Two types: Inter Vivos (Living) And Inter Vivos (Living) And Testamentary (Will) Testamentary (Will) Trust may be Revocable or Irrevocable. Trust may be Revocable or Irrevocable.

10. Copyright 2006 The Risley Law Firm Trusts Trust allows us to separate the two types of title to property: equitable and legal. Trust allows us to separate the two types of title to property: equitable and legal. The legal title holder is the Trustee. The legal title holder is the Trustee. The equitable: Beneficiary. The equitable: Beneficiary.

11. Copyright 2006 The Risley Law Firm Trusts The person who gives the property to the trust (corpus, principle) is the Grantor or Settlor. The person who gives the property to the trust (corpus, principle) is the Grantor or Settlor. The Grantor may be the Trustee and a Beneficiary. The Grantor may be the Trustee and a Beneficiary.

12. Copyright 2006 The Risley Law Firm Trusts Trusts are excellent tool for: Trusts are excellent tool for: Incapacity planning Incapacity planning Business Succession Planning Business Succession Planning Quick, private non-probate transfers Quick, private non-probate transfers

13. Copyright 2006 The Risley Law Firm Trusts Trusts allow some control from beyond the grave Trusts allow some control from beyond the grave Protect beneficiary from himself Protect beneficiary from himself Assure money used as Grantor wishes Assure money used as Grantor wishes

14. Copyright 2006 The Risley Law Firm Trusts Most Grantors are their own trustees Most Grantors are their own trustees Be sure to plan for a “backup quarterback” Be sure to plan for a “backup quarterback” I favor corporate trustees I favor corporate trustees

15. Copyright 2006 The Risley Law Firm Trusts Trusts are NOT a way to cheat creditors Trusts are NOT a way to cheat creditors Trusts must be funded to be effective Trusts must be funded to be effective Always have a “pour-over will” with a Living Trust Always have a “pour-over will” with a Living Trust

16. Copyright 2006 The Risley Law Firm Taxes Current limit: $2 million before taxes kick in Current limit: $2 million before taxes kick in Quickly takes 45% of the estate Quickly takes 45% of the estate Life insurance and retirement funds count towards valuation Life insurance and retirement funds count towards valuation

17. Copyright 2006 The Risley Law Firm Taxes Ways to Reduce Tax Exposure: Ways to Reduce Tax Exposure: Give it away Give it away Give up control Give up control Various Tools: A/B Trust, ILIT, GRAT, GRUT, other charitable gifts. Various Tools: A/B Trust, ILIT, GRAT, GRUT, other charitable gifts.

18. Copyright 2006 The Risley Law Firm Charitable Giving Money you give to charity does not count against your estate evaluation Money you give to charity does not count against your estate evaluation You can give while alive or at death You can give while alive or at death Can give away and still receive money. Can give away and still receive money.

19. Copyright 2006 The Risley Law Firm Charitable Giving Charitable Annuity – good for Medicade planning Charitable Annuity – good for Medicade planning GRAT, GRUT – Form of trust where property given to charity, but income steam reserved GRAT, GRUT – Form of trust where property given to charity, but income steam reserved

20. Copyright 2006 The Risley Law Firm Charitable Giving Use “extra” cash to purchase life insurance policy Use “extra” cash to purchase life insurance policy Make a straight gift Make a straight gift

21. Copyright 2006 The Risley Law Firm Summary Money to do an estate plan is cheap compared to costs of not doing it Money to do an estate plan is cheap compared to costs of not doing it Reduce or prevent family fights Reduce or prevent family fights Reduce or prevent litigation Reduce or prevent litigation

22. Copyright 2006 The Risley Law Firm Summary A good estate plan can provide a smooth transition for the transfer of property or a business A good estate plan can provide a smooth transition for the transfer of property or a business A good estate plan can minimize or eliminate probate costs A good estate plan can minimize or eliminate probate costs

23. Copyright 2006 The Risley Law Firm Summary A good estate plan gives you peace of mind and allows you to make sure that your money and property goes to those who you want to receive it, not where some Court says it should go A good estate plan gives you peace of mind and allows you to make sure that your money and property goes to those who you want to receive it, not where some Court says it should go

24. The Risley Law Firm Gary Risley 2800 N. Hutton Farmington, NM 87402 (505) 326-1776