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A W E A L T H C O U N S E L C O M P A N Y A W E A L T H C O U N S E L C O M P A N Y What Is Estate Planning? Lew Dymond, Jr., Esq.
A W E A L T H C O U N S E L C O M P A N Y A W E A L T H C O U N S E L C O M P A N Y
What Is Estate Planning?
Lew Dymond, Jr., Esq.
A W E A L T H C O U N S E L C O M P A N Y
• Control my property while I’m alive and well.• Provide for myself and my loved ones if I
become disabled.• Give what I have:
– To whom I want;
– The way I want;
– When I want.• Minimize the impact of taxes, professional fees,
and court costs.
Definition of Estate Planning
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A W E A L T H C O U N S E L C O M P A N Y3
Common Estate Planning Mechanisms• Owning property jointly.
• Designating a beneficiary.
• Signing a will or revocable living trust.
A W E A L T H C O U N S E L C O M P A N Y
Traditional Estate Planning
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Gross Estate
Client’s Will or RLT
Non-probate transfers
Jointly-owned propertyLife InsuranceIRAs401(k)sAnnuities
Planned Distributions
Property titled in client’s name
ProbateProcess
A W E A L T H C O U N S E L C O M P A N Y5
Traditional Estate Planning Often Falls Short of Goals
• Doesn’t provide for your disability.• Doesn’t necessarily give what you have:
– to whom you want;– the way you want;– when you want.
• Certainly won’t avoid probate.
A W E A L T H C O U N S E L C O M P A N Y6
Proper Estate PlanningIt is not a transaction.It is a process.Involves not only your client;Can influence many generations.
A W E A L T H C O U N S E L C O M P A N Y7
Proper Estate PlanningIt is not a transaction.It is a process.Involves not only your client;Can influence many generations.WealthCounseling.
A W E A L T H C O U N S E L C O M P A N Y8
Proper Estate PlanningCares for loved ones as if you were still there:
• With your resource.
• With your love.
• With your wisdom.
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The Estate Planning Process
• Education.• Design.
• Drafting Documents.• Implementation.
A W E A L T H C O U N S E L C O M P A N Y10
The Estate Planning Process
• Planning for disability.– Medical Directives.
• Health Care Power of Attorney.• Living Will.• HIPPA authorization.
– Durable Power of Attorney.– Revocable Living Trust.
A W E A L T H C O U N S E L C O M P A N Y11
The Living TrustA trust is a fiduciary relationshipwith respect to propertysubjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it.
Restatement of Trusts 2nd
A W E A L T H C O U N S E L C O M P A N Y12
The Living Trust• Plans for your disability.• Provides for your loved ones.• Contains your caring instructions.• Addresses your fears.• Reflects your love and values.
A W E A L T H C O U N S E L C O M P A N Y
The Living Trust• Planning for disability.
– Superior to relying solely on a durable power of attorney.
• Acceptance by third parties.• Lack of guidelines.
– Less likely to need a guardianship/conservatorship.
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A W E A L T H C O U N S E L C O M P A N Y14
The Living Trust• Plans for your disability.• Provides for your loved ones.• Contains your caring instructions.• Addresses your fears.• Reflects your love and values.• Can avoid probate• Valid in every state.
A W E A L T H C O U N S E L C O M P A N Y
The Living Trust• Avoiding probate.
– Probate administration is very state specific.– Wills do not avoid probate.
• However, many assets do avoid probate.• Clients, attorneys and professionals fail to
understanding the importance of asset titling and beneficiary designations.
– Ancillary probate needed for out of state property.– Living trust centered estate plans more likely to
achieve client’s goals.
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A W E A L T H C O U N S E L C O M P A N Y
Avoiding the Traps ofTraditional Estate Planning
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Gross Estate
Client’s Will or RLT
Non-probate transfers
Jointly-owned propertyLife InsuranceIRAs401(k)sAnnuities
Planned Distributions
Property titled in client’s name
ProbateProcess
A W E A L T H C O U N S E L C O M P A N Y
Avoiding the Traps ofTraditional Estate Planning
17WealthCounsel, LLC
A W E A L T H C O U N S E L C O M P A N Y18
The Living Trust• Plans for your disability.• Provides for your loved ones.• Contains your caring instructions.• Addresses your fears.• Reflects your love and values.• Can avoid probate• Valid in every state.• Private and confidential
A W E A L T H C O U N S E L C O M P A N Y
Last Will of Jackie K. Onassis
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A W E A L T H C O U N S E L C O M P A N Y20
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A W E A L T H C O U N S E L C O M P A N Y
The Living Trust• Maintaining privacy.
– Upon death, wills become a public document.• Many states have a statutory requirement to file a will
even if there is no probate.• With rare exceptions, probate files are open to the
public.– Private information has become a commodity.– Do clients really want the planning they have put
in place for their loved ones to become public information?
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A W E A L T H C O U N S E L C O M P A N Y23
How to Distribute to Your Heirs
• No protection.
• Creditor protection.• Predator protection.• “Self” protection.• Estate tax protection.
• Outright
• In Trust
A W E A L T H C O U N S E L C O M P A N Y24
Basic Estate and Gift Tax Rules• It’s a transfer tax on everything you own.*• Estate and gift taxes are a flat 35%.**• $13,000 annual exclusion.***• Unlimited marital deduction.• $5,120,000 unified credit.****• Unlimited charitable deduction.• Use it or lose it.
* All of this is subject to change. ** Under current legislation in 2013 graduated rates up to
55% *** Indexed for inflation.**** Under current legislation becomes $1M in 2013.
A W E A L T H C O U N S E L C O M P A N Y
Basic Federal Estate Tax and Gift Tax RulesRules of the Game Going Forward:– What can we expect between now and 2013?
• Definitely a political football.• The one aspect of TRUIRJCA targeted by House Democrats.
– Possibilities:• Permanent extension of TRUIRJCA - $5M and 35% rate.• Permanent extension of EGTRRA 2009 - $3.5M and 45% rate.• Permanent repeal.• Sunset - $1M exemption graduated rates up to 55%.
– Temporary or long-term.• Temporary extension of TRUIRJCA – 2 years.
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