Download - The Truth About Estate Planning
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The Truth About Estate Planning
Presented by Suzanne M. GravesAttorney and Counsellor At Law
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Estate Planning Overview
Most Estate PlansJust Don’t Work!
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Estate Planning Overview
Smokescreens
• Will vs. Trust• Avoid Probate• Hourly vs. Percentage Billing• Funded vs. Unfunded Trust
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Estate Planning Overview
• Personalized Counselling• Proper Asset Ownership• Formal Review Process• Controlled Transfer Process
• What to Do• How to Do It• How to Pay for It
Keys to an Effective Estate Plan
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Estate Planning Overview
Definition of Estate Planning
I Want to Control My Property While I’m Alive and Well
Plan for Me and My Loved Ones if I Become Disabled
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Estate Planning Overview
Definition of Estate Planning
Give What I Have• To Whom I Want• When I Want• The Way I Want
All While Assuring My Wisdom is Transferred Along with My Wealth
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Estate Planning Overview
The Planning Pyramid™
• Focuses on Client Goals
• Solutions Make Planning Easier
• Exposes Traditional Planning as “Upside Down”
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Estate Planning Overview
Contrasting the Traditional and Truth Approaches
• The Debate Has Centered on Documents
• “It’s Not About Documents, It’s About RESULTS!”
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Estate Planning Overview
TraditionalDocuments Used
Will Trust (Testamentary) Powers of Attorney
– Financial– Health Care
Living Will
Living Trust
Documents Used
Will (Pour-over) Trust (Living) Powers of Attorney
– Financial– Health Care
Living Will
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Estate Planning OverviewComparison
Traditional vs. Approach
Client Care™
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Estate Planning Overview
Client Care Process
Meet with Attorney to Develop Goals
Design Plan
Sign Plan
Fund Trust
Successor Training Workshops
Other Educational Workshops for Client
Annual Updating of Trust
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Estate Planning Overview
Three Step Strategy™• DEVELOP Your Plan with Counselling Oriented Planning Partners• COMMIT Yourself and Your Family to a
Continuing Maintenance and Education
Program • SECURE Appropriate Assistance for You and Your Family to Transfer Your Wisdom along With Your Wealth
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Estate Planning Overview
Three Types of Estate Plans
• Married Couple Under $2,000,000
• Married Couple Over $2,000,000
• Unmarried Individual
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Estate Planning Overview
Personal Planning Goals
• Catastrophic Illness Protection• Remarriage Protection• Creditor Protection• Divorce Protection• Values Promotion
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Counselling Oriented Planning Partners
How Do YOU Spell Counselling?
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Counselling Oriented Attorney
Counselling vs. Word Processing
Counselling vs. Communication
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Communication
No or Low Additional Cost
Plain English
Use of Stories
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Estate Planning Overview
Three Step Strategy™• DEVELOP Your Plan with Counselling Oriented Planning Partners• COMMIT Yourself and Your Family to a
Continuing Maintenance and Education
Program • SECURE Appropriate Assistance for You and Your Family to Transfer Your Wisdom along With Your Wealth
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Estate Planning Overview
Three Types of Change An Estate Plan Faces
• Changes in Your Personal Situation
• Personal• Financial
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Estate Planning Overview
Three Types of Change An Estate Plan Faces
• Changes in the Legal Environment
• Tax• Non-Tax (Personal Protections)
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Estate Planning Overview
Three Types of Change An Estate Plan Faces
• Changes in Your Attorney’s Experience• Changes in Your OWN Experience
• Static vs. Continuous Improvement?
• Add Earned and Learned Wisdom!
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Estate Planning Overview
Three Step Strategy™• DEVELOP Your Plan with Counselling Oriented Planning Partners• COMMIT Yourself and Your Family to a
Continuing Maintenance and Education
Program • SECURE Appropriate Assistance for You and Your Family to Transfer Your Wisdom along With Your Wealth
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“Appropriate Assistance”
Full Disclosure
Controlled Cost
True Peace of Mind
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“Appropriate Assistance”
Are We The Ones?
• Age • Experience• Personality• Values
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Controlled Cost
Successor Trustees Hire Assistance
Proactive Engagement Approach
Full Funding
Proactive Trustee (&Beneficiary) Training
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Estate Planning Overview
Three Factors of Overall Cost
• The Cost of the Documents
• The Cost of Updating (Or Failing to Update)
• The Cost After Death• Transfer of Assets• Death Tax Return Preparation
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Estate Planning Overview
“The Rest” of the Fees
• Trust Settlement Administration• Disability• Death
• Death Tax Return Preparation
• Probate Services
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Estate Planning OverviewFees
Traditional Probate
– 2 to 3% “Standard” Living Trust Planning
– 1.5 to 2.5% Client Care Process™
– .5 to 1%
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Without Counselling Approach• Reduced Initial Planning Options
• Outdated Plans Technical Personal
• Little Education For Yourself For Your Family
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Estate Planning Overview
EVERYTHING IN ESTATE PLANNING COMES DOWN TO TITLE!
• Tax Savings
• Personal Protections• Catastrophic Illness Protection• Catastrophic Creditor Protection• Remarriage Protection• Divorce Protection
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Estate Planning Overview
Three Types of Title
• Individual Name• Joint Name• Contract
• Beneficiary Designation• Trust
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Estate Planning Overview
INDIVIDUAL NAME
equals
WILL
equals
PROBATE!
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Estate Planning Options
• No Documents (Joint Tenancy)• Simple Will & Power of Attorney• Will with Testamentary Trust & Power of Attorney• Bare Bones Living Trust• Client Care Process™
Estate Planning Overview
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Estate Planning Overview
Estate Planning Challenges
• Mental Disability
• Asset Transfer Upon Death
• Taxation
• Personal Planning Goals
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Mental Disability Planning
Guardianship
• Loss of Control (to Judge)
• When I’m Disabled• Who Takes over Control (Guardian) • What the Guardian Can Do
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Mental Disability Planning
Guardianship• Expensive
• Attorney’s Fees• Accounting Fees
• Time Consuming• Record-Keeping• Court Reports
• Public
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Mental Disability Planning
General Durable Power of Attorney
• Blank Check
• Effective Immediately
• No Instructions
• No Reporting Requirements
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Mental Disability Planning
Bare Bones Trusts
• Contain Standard Definitions of Disability and No Personal Instructions;
• Rely on General Durable Powers of Attorney; or
• Rely on Funding Only Power of Attorney
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Mental Disability Planning
Client Care Process™
• Personalized Definition of Disability
• Private Transfer to Personally Selected Disability Trustees
• Personalized Disability Instructions
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Mental Disability Planning
Planning for Retirement Plans
Contact Financial Institutions (or Human Resources) in advance
– Use their own power of attorney; or
– Get advance approval of your personalized document
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Federal Estate Tax Reduction
Key Tax Savings Provisions
Unlimited Marital Deduction
$2,000,000 Exemption Equivalent
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Federal Estate Tax Reduction
Trip to the IRS Supermarket
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Federal Estate Tax Reduction
Property in The Supermarket Is Subject to Federal Estate Tax
Property out in The Parking Lot Is Not Subject to Federal Estate Tax
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Federal Estate Tax Reduction
Family Trust
also called: B Trust Credit Shelter Trust By Pass Trust
FamilyTrust
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Trustee Instructions:
Split Trusts Into Two Sub-Trusts
Family
Federal Estate Tax Reduction
Marital
Survivor May Be Trustee and Beneficiary of Both!
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Federal Estate Tax Reduction
Trustee Instructions:
Transfer up to Exemption Equivalent to Family Trust, Put Any Excess in Marital Trust
Marital
Excess 1st $2,000,000(Today)
Family
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Federal Estate Tax Reduction Marital Trust
Trustee Instructions:
Income to Spouse
Marital
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Federal Estate Tax ReductionMarital Trust
Trustee Instructions:
Principal Full Control Full Use; Limited
Control on Death Full Use Marital
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Federal Estate Tax ReturnFamily Trust
Trustee Instructions:
Income to Spouse Mandatory Discretionary
Family
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Federal Estate Tax ReductionFamily Trust
Trustee Instructions:
Principal For “Needs” Health Education Maintenance Support
Family
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Federal Estate Tax Reduction
The “Rule of 72”Dividing 72 by the rate of return on your investment roughly equals the number of years it takes to double
your account balance.
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Federal Estate Tax Reduction
Effect of Growth
Excess
To LaterBeneficiaries But
Included in Survivor’s Estate
1st $2,000,000
8,000,000To Later Beneficiaries
WITHOUT Federal Estate Tax
FamilyMarital
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Federal Estate Tax Reduction
Tax Savings Determined By:
Applicable Exclusion Amount
(Determined by Congress)
Funding of Family Trust
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Federal Estate Tax Reduction
Available
Individual Name Assets Living Trust Assets Beneficiary Designations
Payable to Trust
Not Available
Joint Assets
Beneficiary Designations Payable to Individuals
Funding The Family Trust