Well , I’ll Get Around
to it . . .
WHO NEEDS AN
ESTATE PLAN?
EVERYONE!
PURPOSE OF PLANNING
Lifetime issues
Family issues
Wealth protection
Tax avoidance
WHAT DOES AN ESTATE PLAN
INCLUDE?
Will
Statement of
Disposition of Tangible
Personal Property
Revocable Trust
Life Insurance/
Irrevocable Trust
Durable General Power
of Attorney
Durable Health Care
Power of Attorney
Organ Donation /
Cremation and Funeral
Instructions
Beneficiary
Designations
Re-titling of Assets
WHERE THERE IS NO WILL
No named beneficiaries
No named guardian
No named personal representative
No testamentary trust
THE WILL
The will is the instrument that directs how your assets
are to be distributed after your death.
Personal representatives
Q-tip trust
Family trust
GUARDIANS
For people with minor children, this is the most important reason for
establishing an estate plan.
REVOCABLE OR “LIVING
TRUST”
Trust Agreement
Pour-Over Will
WILL VS. REVOCABLE TRUST
Tax planning
Organize now or later
Administration
BENEFICIARIES
THIS IS A BIG ISSUE
Children
Charities
Other family members
IF YOU HAVE A REVOCABLE
TRUST . . .
Is it funded?
GENERAL DURABLE POWER OF
ATTORNEY
This document handles your financial matters.
Date of Document
When does it become effective
GENERAL DURABLE HEALTH
CARE POWER OF ATTORNEY
You appoint someone to make health care decisions for
you when you are unable
Includes the “living will”
Cremation/burial instruction
STATEMENT OF DISPOSITION OF
TANGIBLE PERSONAL PROPERTY
BENEFICIARY DESIGNATIONS
Properly designating beneficiaries of Retirement Plans
at death is an important part of the estate planning
process
For many, this is the largest asset
Children as beneficiaries
LIFE INSURANCE
Liquidity – taxes, succession planning
Creating estates
Replace income
A lot of insurance
Not enough insurance
IRREVOCABLE TRUSTS for Life
Insurance
TITLING OF ASSETS
TENANTS IN COMMON
JOINT TENANTS
BENEFICIARY DESIGNATIONS
IRAs
LIFE INSURANCE
401(k)s
WHAT IS A PROBATE?
The purpose of probate is to transfer assets and deal with the creditors
of the decedent.
DIVORCE
Ownership of real property by a husband and a wife as joint
tenants changes to ownership as tenants in common if the
couple is divorced. After a divorce if one marriage partner
dies before changing the title to the property, the
decedent’s interest in the property automatically passes to
his or her heirs rather than to the former spouse.
DIVORCE (continued)
A divorce terminates the right of a
former spouse to inherit under the will.
A divorce or dissolution of marriage
revokes bequests and devises to a former
spouse – but not the will itself.
A divorce revokes the appointment of the
former spouse as an executor or trustee
under the will.
Watch out for insurance beneficiaries!
MINOR CHILDREN
Appointment of a guardian
Establishment of a trust – minor children cannot inherit
outright
DISABLED CHILD
Supplemental Needs Trust
THE FIRST RULE IN ESTATE
TAX PLANNING:
Fully utilize the Unified Credit
UNIFIED CREDIT
2014
$5,250,000
ENTITY CHOICES…
LIMITING LIABILITY
Entity Choice
Liability insurance
ENTITIES THAT LIMIT LIABILITY
Corporations
Limited Liability Companies
LIABILITY INSURANCE
•
Look at your umbrella
•
Pays for the lawyer
FACTORS TO CONSIDER IN CHOOSING
ENTITY TYPE
Tax considerations
Operational flexibility/compliance
Ease of liquidity
Future fundings
C CORPORATIONS
•
annual compliance
•
double taxation
•
most familiarity
S CORP
•
special election
•
•
•US
•Tax
flow through
limited to 75 shareholders/
residents
liability even if no cash from corp.
LLCs
•
•
Flow through
fewer formalities/operational flexibility
•
operating agreement
•
•
managers
transfer of appreciable assets to members
FOR MORE INFORMATION
REGARDING PLANNING, CONTACT:
Cristy J. Carbón-Gaul
505-899-5696
cristy@carbon-gaul.com
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