1. Estate Planning Annie’s Project February 6, 2007 Coweta Oklahoma

2. Estate Planning - Introduction A single correct answer does not exist. No perfect solution exists u Laws change u Family situations change Must evaluate the good points and bad points of each estate planning tool. The ultimate decision of what to do is yours.

3. Estate Planning -- Objectives Provide sufficient income to live comfortably and take care of emergencies. Make sure assets go to those you want to receive them. Minimize estate settlement costs.

4. Estate Planning - Things to Keep in Mind Keep it simple Maintain flexibility to change your plans Be sure to take care of yourself first You worked hard to accumulate your estate, so enjoy it.

5. Your Estate Everything you own at the time of your death. Real Estate Personal Property Investments Business Interests Savings Accounts Survivor Pension Benefits Life Insurance Proceeds

6. Gross Estate Appraised at Market Price Total real and personal property Full value of property owned in joint tenancy except that owned with spouse One-half value joint tenancy with spouse Insurance owned or controlled by decedent Taxable portion of gifts included in tax base

7. Taxable Estate Gross Estate = Value of All Property Owned Less Allowable Deductions

8. Federal Allowable Deductions Unified tax credit Marital deduction - unlimited Transfers to exempt charitable, religious, and similar institutions Claims against estate, administration costs, funeral expenses, etc.

9. Determining Basis of Property Purchased Property - purchase price, plus capital improvements, less depreciation. Gifts - Same as DONOR’S basis PLUS portion of any GIFT TAX paid. Inherited Property - DECEDENT’S BASIS  Usually appraised  Value for Estate Tax Purposes

10. Estate and Gift Tax Rules Federal  Unified Credit 2007 & 2008 - Can Transfer $2,000,000 2009 - $3,500,000 2010 - Estate Tax Repealed 2011 & beyond - $1,000,000 (revert back to 2002 rules)  100% Marital Deduction  Annual Gift Tax Exclusion $12,000 ($24,000 for Couple using gift splitting)

11. Estate and Gift Tax Rules Oklahoma  Unified Credit 2007 - Can Transfer $1,000,000 2008 - $2,000,000 2009 - $3,000,000 2010 & beyond – Estate Tax Repealed  No Gift Tax (3 year contemplation of death rule still applies)

12. Oklahoma Allowable Deduction $1,000,000 to lineal and collateral heirs as of 1/1/07 $1,000 burial lot or crypt $500 monument Debts of the estate, attorneys fees and others

13. Property Transfer Oklahoma law of descent Will Revocable living trust Irrevocable living trust

14. Wills -- Advantages Leaves control with owner until death. Can be changed easily. May select executor. May have executor serve without bond. May name guardian (recommendation). Covers all property not held in joint tenancy except insurance.

15. A Living Trust Is... The convenient way to pass your estate to your heirs eliminating the stress and financial burden of lawyers, courts, or the probate system.

16. Purpose Avoid probate Avoid guardianship Help to reduce estate taxes Reduce the emotional burden on loved ones by reducing estate settlement time and expenses

17. Other Important Estate Planning Documents Durable financial power of attorney Durable health care power of attorney Living will

18. General Principles and Conclusions All parents should retain enough assets to live comfortably and take care of any emergencies. Not only is the best estate plan different for each family, but the best plan may change with changes in the estate or family. Consult with a qualified estate planner.

19. Conclusion Not one correct answer Things change: Be aware of Oklahoma & Federal Estate Taxes We don’t want to subject Estate to taxes more than once If we have done a good job of Estate Planning, we will minimize estate settlement costs.

20. Conclusion Estate Taxes and Probate Be sure to take care of yourself first. Don’t run out of money or property. Make sure you make up your own mind and you feel comfortable with your decision. Realize you will want to change your mind at some point in the future, so keep things flexible.

21. References F-771 Trusts: Uses and Considerations F-773 Probate F-782 Wills: Uses and Considerations

22. Homework Assignment Determine if you have an Estate Plan and review the document(s).