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1 National Risk Management Education Conference Phoenix, AZ April 17 & 18, 2007
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2 Marsha Goetting Ph.D., CFP ®, CFCS Professor & Extension Family Economics Specialist Department of Agricultural Economics & Economics
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3 Reveals interest level of audience Hint for time allocation for topics Topic Voting
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4 Special Request: Members of the Pre-conference Planning Committee
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5 Make your presentation!!!! Lively Interesting Exciting
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6 Don’t want to think about Death Dying
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7 Experiment Succession/Estate Planning Team Contest – Valuable prizes !!!
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8 3 - 5 people Divide into Groups
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9 First Decision Select Team Name –30 Seconds
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10 What I learned Opportunity to get acquainted Names reveal location etc.
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11 Second Decision – Select Team Runner Each time your team responds to a question òWrite team name & answer on sticky note John Baker Cyclones 50%
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12 Alternative approach Each time put sticky note on table when correct GoellerCornhuskers 50%
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13 Rewards –“Winning Team” Gets to select prizes at the end of the session
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14 –A word about professionals on the teams What I learned
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15 “ Who” Gets Your Property When You Die????
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16 Titled Real Property includes: Land Home
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17 Titled Personal Property includes: Savings & Checking Accounts Certificates of Deposits Motor Vehicles Stocks & Bonds
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18 Contract Law Beneficiary Designations –Life insurance –Annuities –IRAs –Keogh
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19 Life Insurance Bill Vere
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20 Beneficiary Bill has $100,000 life insurance policy Designates Vere –primary beneficiary
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21 Bill’s Will “I bequest all my life insurance proceeds to my son, Chris Shelton.”
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22 Who gets $100,000? Vere, wife? Chris, son?
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23 $100,000 Life Insurance Proceeds Vere Contractual arrangement – Designated Beneficiary
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24 What I learned About half of audiences guess incorrectly Most think a will controls
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25 Bob Parsons Divorced, former wife beneficiary Remarries, tells present wife she is beneficiary Writes will naming daughter as beneficiary
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26 Payable on Death Designation (POD) Accounts at financial institutions At death ownership passes to POD beneficiaries
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27 Transfers on Death (TOD) Registration Stocks Bonds Mutual funds
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28 What fraction (if any) will brother receive? No Written Will
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29 Team Question What share, if any, does Brother receive?
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30 What fraction (if any) will brother receive? No Written Will
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31 ? Right of Representation
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32 Married Couple John & Mary property titled John’s name only (sole proprietorship) No children
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33 Auto Accident John dies first Mary dies 3 days later
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34 Team Question Who receives the property?
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35 Who Receives? John dies first Mary dies 3 days later
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36 Whose relatives receive????? John dies first Mary dies 3rd Day John’s relatives receive property
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37 Montana Survival Requirement An heir must survive 120 hours Otherwise, treated as predeceasing the decedent
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38 What I learned About 90% of audiences miss this question
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39 Who Receives? John dies first Mary dies 6 days later
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40 Who receives??? John dies first Mary dies 6rd Day Mary’s relatives receive property
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41 Question: What fraction, if any does grandchild receive? ?
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42 Survivors : two children & grandchildren Right of Representation
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43 Survivors : one child & grandchildren Right of Representation
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44 Survivors : One child & grandchildren ? Right of Representation
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45 Survivors : Grandchildren
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46 Question What % of Americans die without a written will?
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47 7 out of 10 do not have a will
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48 “Being of sound mind I spent it all.” Here is your DAD’S will
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49 “To my son I leave the pleasure of earning a living. For 25 years he thought the pleasure was mine. He was mistaken.” Dad’s Will
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50 Heinrich Heine Made his wife sole beneficiary on the condition that she remarry because then “ there will be at least one man to regret my death ”
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51 Question What % of deceased persons’ estates paid a federal estate tax in 2003?
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52 Federal Estate Tax 2%
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53 Federal Estate Tax Exclusions & Credits
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54 Planning Technique Die in appropriate year!!!
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55 Marsh Trigger –Walk around listening –Address misconceptions
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56 Team Question Value of John’s gross estate for federal estate tax computation purposes? –$ 2,500,000 Living Trust –$ 100,000 Saving Bonds/POD Wife –$ 150,000 Joint Tenancy/Son –$ 250,000 Life Insurance Policy –$ 500,000 Tenancy in Common with spouse
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57 John’s Estate Value $3,500,000 Exemption 2007 $2,000,000 ***$690,500 due in tax
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58 Question What is the amount that can be gifted yearly without a federal gift tax?
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59 Annual Gifts $12,000 To as many people as you wish Tax free
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60 Gift-splitting Spouse may join in gift $24,000
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61 Question & Sticky note approach to teaching
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62 Rewards –Winning Team
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63 Marsha A. Goetting MSU Extension Family Economics Specialist goetting@montana.edu P. O. Box 172800 Montana State University Bozeman, MT 59717 406-994-5695
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