Planning for Your Future is Essential

1. Planning for Your Future is Essential Ensure peace of mind with a comprehensive Family Protection Plan.

2. Seven Tips for Protecting Your Family and Assets • Tip #1 – Make sure your will is up to date. • Tip #2 – Have your will properly signed and witnessed. • Tip #3 - Use the appropriate powers of attorney. • Tip #4 – Use trusts appropriately. • Tip #5 – Be sure to choose the right guardians and financial trustees. • Tip #6 - Plan for taxes – estate, gift and other taxes. • Tip #7 – Consider making a video to pass on your values.

3. A Family Protection Plan is a plan for the preservation and distribution of your wealth in the future that includes your wealth, health, family and values. What is aFamily Protection Plan?

4. Home • Automobiles • Bank accounts • Retirement accounts • Life insurance Your Estate • Investments • Business interests

5. Whole life - cash value • Can take out loans from the policy • No tax on interest or earnings • Term – coverage for a specified period • Inexpensive premiums Notes About Life Insurance • Provides cash the estate can use to pay expenses

6. Protect you if you are not able to make decisions for yourself, • Prevent you from outliving your income, or A will, by itself, may not be enough. It may not: • Provide for future contingencies.

7. Will • Trust • Durable Power of Attorney • Guardianship Depending on your situation, you may need a: • Medical Power of Attorney • Health Care Directive

8. A will • Joint tenancy in real estate, bank accounts, or other personal property • A revocable living trust Ways to Transfer Property • Beneficiary designations on life insurance and retirement accounts

9. Ways to Transfer Property • Difference between a Will and a Trust • A will is a legal declaration by which a person, the testator, names one or more persons to manage his or her estate and provides for the distribution of his or her property at death. • A trust is a relationship in which a person, the settlor, gives property to another person, the trustee, to protect and use it for the benefit of third person, the beneficiary.

10. Tip #1 – Make sure your willis current.

11. An up-to-date will is an important piece of a Family Protection Plan. • Have you been married or had a child since you last made your will? • Your will should have your proper marital status and desired beneficiaries. Make Sure Your Will is Current

12. Reasons to Have a Will • If you do not have a will, your property will be distributed to your surviving spouse or registered domestic partner, children and/or parents according to the Washington State intestate succession laws. Make Sure Your Will is Current

13. Make Sure Your Will is Current Reasons to Have a Will • If you do not have a will, the State will decide who will be the guardiansof your minor children.

14. Reasons to Have a Will • To give an item of intrinsic value to the person you know would most appreciate it. • Examples: • Photography equipment • Jewelry Make Sure Your Will is Current • An expensive bicycle • A painting • A music collection

15. Tip #2 – Make Sure Your Will is Properly Signed and Witnessed

16. Requirements for a Valid Will In Washington, a will must be: • Signed by testator (at least 18 years old) • Signed in front of two competent witnesses who: Make Sure Your Will isProperly Signed and Witnessed • Witness the testator signing the will • Sign the will or an affidavit in the presence of the testator and at the testator’s request.

17. Out-of-State Wills A will is valid in Washington State if: • It is signed in the manner required by the state in which it is signed, or • It is signed in the manner required by the state of the testator’s home, Make Sure Your Will isProperly Signed and Witnessed • At the time it is signed or at the time of the testator’s death.

18. Financial Power of Attorney • Durable Power of Attorney for Health Care Tip #3 – Have the ProperPowers of Attorney in Your Plan • Advance Health Care Directive

19. Financial Power of Attorney • A durable financial power of attorney is a simple, inexpensive, and reliable way to arrange for someone to manage your finances if you cannot. • A “springing” power of attorney goes into effect only after a doctor certifies that you have become incapacitated. Proper Powers of Attorney

20. Advance Directive • A Durable Power of Attorney for Health Care appoints a person to make decisions regarding your medical treatment if you cannot make these decisions yourself. Proper Powers of Attorney • A Health Care Directive (“Living Will”) sets forth your wishes regarding life-sustaining care.

21. Tip #4 – Use Trusts Appropriately as part of your Family Protection Plan

22. Kinds of Trusts • Revocable trust • Grantor may terminate the trust and reclaim the property. • Trust property will be included in estate. Use Trusts Appropriately • Irrevocable Trust • Grantor may not terminate the trust. • Trust property will not be included in estate.

23. A revocable living trust may be used to avoid probate and protect your privacy if desired. However, it requires your attention during your lifetime. • In some cases, a will which is probated may be preferable to a living trust because it requires little effort to maintain. Use Trusts Appropriately

24. A Word About Probate • Probate, with a neutral third party, is uniquely suited to resolve any disputes. • Generally, it takes about six months to a year in Washington State. Use Trusts Appropriately • Creditors’ claims may be resolved in probate by filing a Probate Notice to Creditors. (There is also a Nonprobate Notice to Creditors.)

25. A trust may be used to provide for minor children • A spendthrift trust may protect funds from foolish decisions and from creditors. Use Trusts Appropriately • Set criteria (“ascertainable standards”) should be used to make distributions.

26. Considerations for a Children’s Trust • Consider the maturity of the beneficiaries • May want to postpone bequest until child reaches a certain age or ages Use Trusts Appropriately • Consider your own financial needs during your lifetime

27. A Special Needs Trust can provide care for disabled relatives • Allows you to provide funds for supplemental purposes, not for basic support. • Allows you to provide funds to your relative without disqualifying them from means-tested benefits. Use Trusts Appropriately

28. Pet Trust • You can name a trustee who will care for your pet. • You can determine an amount to be distributed regularly and specify how the money should be spent for your pet’s care. Use Trusts Appropriately

29. Tip #5 – Be sure to choose the right guardians and financial trustees.

30. Things to Consider • Minor children • Separate financial trustee & guardian • Consider person’s skills & expertise • Contingencies • Incapacity or death of named guardian • Divorce of named guardian Choose the Right Guardians/Trustees • Personal qualities of potential guardian or trustee

31. Qualities for a Guardian or Trustee • Similar values • Able to manage own finances • Makes good, well-informed, decisions • Relationship with you/your beneficiary Choose the Right Guardians/Trustees • Understands the beneficiary’s needs

32. Consider: • Washington State andfederal taxes • Lifetime gifts • Generation-Skipping Tax Tip #6 - Plan for Estate & Gift and Other Tax Consequences • Capital gains • The use of family limited partnerships

33. Estate Tax Return • The Estate Tax Return (and payment of estate taxes) will be due 9 months after the date of death. Plan for Tax Consequences

34. How is the Federal Estate Tax Calculated? Gross Estate – Debt + Insurance = Taxable Estate Plan for Tax Consequences

35. Federal Estate Tax Rates

36. Plan for Tax Consequences • Applies if a spouse dies without using his or her full estate tax exemption. • The surviving spouse may use the deceased spouse’s unused federal estate tax exemption. Portability of Estate Tax Exemption • Must timely file a timely estate tax return and elect to add the unused exemption to his or her own exemption.

37. Plan for Tax Consequences • In Washington State, the exemption amount is $2,000,000 per person. • Starting in 2014, this will be indexed for inflation Washington State Estate Tax

38. Plan for Tax Consequences • In 2014, certain family-owned businesses will receive an estate tax exemption of up to $2.5 Million. • The decedent must have actively worked in the business and must leave the interest to a family member or another existing owner. Washington State Estate Tax • The value of the decedent’s interest in the business must be greater than 50% of the taxable estate and must not exceed $6M.

39. Charitable Remainder Trusts Plan for Tax Consequences • In a CRT, the donor sets aside money in a trust and reserves a right to regular payments. The remainder is given to a designated charity at death.

40. Tax Advantages of Charitable Remainder Trusts • The donor receives a charitable deduction for the present value of the amount designated to go to charity. Plan for Tax Consequences • The trust pays no tax when it later sells appreciated property.

41. Tax Disadvantages of Charitable Remainder Trusts • The property in the trust (the “trust corpus”) will be included in the donor’s gross estate and will be subject to estate tax. Plan for Tax Consequences

42. Tip #7 - Consider Making a Video to Pass on Your Values

43. Capture your stories, life lessons and family traditions in a video. • What is a family tradition you love and how did it become a family tradition? Consider Making a Video • What is one piece of advice you wish you had heard when you were younger?

44. Seven Tips for Protecting Your Family and Assets • Tip #1 – Make sure your will is up to date. • Tip #2 – Have your will properly signed and witnessed. • Tip #3 - Use the appropriate powers of attorney. • Tip #4 – Use trusts appropriately. • Tip #5 – Be sure to choose the right guardians and financial trustees. • Tip #6 - Plan for taxes – estate, gift and other taxes. • Tip #7 – Consider making a video to pass on your values.

45. Questions? Robert V. Boeshaar Attorney at Law, LL.M., PLLC www.boeshaarlaw.com (206) 623-0063