Estate Planning 101 Law Office of Dennis Caufield, LLC

1. Estate Planning 101Law Office of Dennis Caufield, LLC Sun City West, AZ

2. YourHome “What is an “Estate?” Investments Jewelry IRA’s Stocks & Cash Bonds Insurance Policies Automobiles Antiques Income Properties

3. 3 Basic Keys to Estate Planning • Maintaining control during incapacity • Quick & cost effective wealth transfer at death • Protecting beneficiaries from themselves & others

4. Your Planning Opportunity Catastrophic Illness Mental Incapacity Death Today Living Will Will Powers of Attorney Living Trust When Should You Plan Your Estate?

5. 2 Platforms for Planning • Will based plan • Trust based plan

6. Will Based Plan Properly titled assets

7. What is a Trust? “a fiduciary relationship with respect to property, subjecting 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 Second of Trust §2

8. What is a Trust? • Grantor • Trustee(s) • Beneficiary(ies)

9. #1 Mistake Failing to Address Health Care Decisions

10. Online Storage of Healthcare Documents Free Service Offered by the Arizona Secretary of State Visit www.azsos.gov/adv_dir

11. #2 Mistake Failing to Plan for HIPAA (Access to Medical Records)

12. #3 Mistake No plan to control financial & property matters during incapacity

13. No Wealth Transfer Strategy #4 Mistake

14. Intestacy • James Dean: • Died at age 24 without a will • Entire estate, including licensing fees, passed to his father, who had abandoned him as a child. • Licensing fees generate $1 - $3M annually.

15. #5 Mistake Failure to Understand & Plan For Death Taxes

16. Federal Estate Tax

17. #6 Mistake Thinking Children – Minor And Adult – Don’t Need Inheritance Protection

18. What if your child … • Suffers a divorce • Experiences creditor problems • Gets sued

19. Inheritance Protection Trust • Adult child is trustee of his trust • Has significant access to income and principal • Can ultimately consume it all -- no strings attached

20. Predators, Spend-thrifts • The Woolworth Misfortune • Granddaughter of Woolworth founder, Barbara Hutton • At age 10, she inherited $25 Million in trust. • Under the terms of the Trust, Barbara received the entire Trust ($50 million) outright with no strings attached at the age of 21. • 46 Years and 7 husbands later, she died at age 66 with a mere $3,000. • Years of relentless exploitation, spousal abuse, drug addiction and outrageous, uncontrolled spending.

21. #7 Mistake Failing to Transfer “Values”

22. #8 Mistake Not Preserving Tax Deferral Benefits of Retirement Plans

23. HUGE LOSS When Your IRA is Cashed-out Early and Spent!Assumes $100,000 at age 40 earning 6% andChild fully withdraws and must pay the tax due A difference of over $ 400,000 on a $100,000 IRA!

24. Still a BIG LOSS When Your IRA is Cashed-out Early and Invested!Assumes $100,000 at age 40 earning 6% andChild fully withdraws and must pay the tax due A difference of over $ 300,000 on a $100,000 IRA!

25. #9 Mistake Failing to Organize and Consolidate

26. #10 Mistake In 2nd marriages, failing to protect your spouse, and your kids

27. #11 Mistake Failing to Plan for Tangible Personal Property

28. #12 Mistake Failing to Name a Guardian for Minor or Incapacitated Children

29. #13 Mistake Believing Estate Planning is a “One-Time Event”

30. Where Do You Go From Here?

31. “Without counsel plans go wrong, but with many advisers they succeed."    Proverbs 15:22 • Free Initial Consultation Law Office of Dennis Caufield, LLC Plan Today for a Secure Tomorrow