Well , I’ll Get Well , I’ll Get Around to it . . .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

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