What Is Estate Planning?

1. What Is Estate Planning? Lew Dymond, Jr., Esq.

2. Definition of Estate Planning • 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.

3. Common Estate Planning Mechanisms • Owning property jointly. • Designating a beneficiary. • Signing a will or revocable living trust.

4. Traditional Estate Planning Gross Estate Non-probate transfers Property titled in client’s name Jointly-owned property Life Insurance IRAs 401(k)s Annuities Probate Process Client’s Will or RLT Planned Distributions

5. 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.

6. Proper Estate Planning It is not a transaction. It is a process. Involves not only your client;Can influence many generations.

7. Proper Estate Planning It is not a transaction. It is a process. Involves not only your client;Can influence many generations. WealthCounseling.

8. Proper Estate Planning Cares for loved ones as if you were still there: • With your resource. • With your love. • With your wisdom.

9. The Estate Planning Process • Education. • Design. • Drafting Documents. • Implementation.

10. 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.

11. The Living Trust A trust is 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 of Trusts 2nd

12. The Living Trust • Plans for your disability. • Provides for your loved ones. • Contains your caring instructions. • Addresses your fears. • Reflects your love and values.

13. 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.

14. 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.

15. 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.

16. Avoiding the Traps ofTraditional Estate Planning Gross Estate Non-probate transfers Property titled in client’s name Jointly-owned property Life Insurance IRAs 401(k)s Annuities Probate Process Client’s Will or RLT Planned Distributions

17. WealthCounsel, LLC Avoiding the Traps ofTraditional Estate Planning

18. 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

19. Last Will of Jackie K. Onassis

22. 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?

23. How to Distribute to Your Heirs • Outright • No protection. • Creditor protection. • Predator protection. • “Self” protection. • Estate tax protection. • In Trust

24. 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.

25. Basic Federal Estate Tax and Gift Tax Rules Rules 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.