Why you need an Estate Plan
The Importance of Estate Planning
The process of planning for the accumulation, preservation and transition (or distribution) of your assets in accordance with your wishes
• Control who manages and receives your assets at your death
• Transfer a greater share of your assets to your beneficiaries by minimizing tax liabilities
• Protect your privacy
• Reduce administrative expenses and legal fees
What Can Happen Without an Estate Plan
• Substantial tax burdens and legal expenses
• Time delays in the settlement of your estate
• Family conflicts
– Spouse
– Children
– Close/Distant Relatives
– Friends
• Assets would be paid per state intestacy law and not according to your wishes
• Assets may pass to unintended beneficiaries
When to Create or Review Your Estate Plan
• Changes in Your Life
• Marriage / Divorce
• Births / Deaths
• Sale of a Business / Retirement
• Change in Domicile
• Change in Your Beneficiaries’ Health
• Change in Net Worth (Including Anticipated Change in Net Worth)
• Change in Relationships With Beneficiaries
Determining Your Estate Planning Objectives
In General:
• To which people and/or charities do you want your wealth distributed?
• How do you wish to have your wealth distributed to beneficiaries?
• Do you have any concerns about distributing wealth to any beneficiaries?
• When do you want distributions from your estate to begin?
• What would you like your beneficiaries to achieve with their inheritance?
• Who will you nominate as Trustees, Executors, Guardians?
• Who will make your health care and financial decisions if you can’t?
If Married:
• Do you plan to leave all your assets to your spouse?
• Do you have any concerns about leaving all your assets to your spouse?
• Does your spouse have an estate plan?
Calculating Your Estate
Your Estate Includes
+ Residences and Investment Real Estate
+ Stocks, Bonds and Funds
+ Checking / Savings Accounts
+ Closely Held Investment Vehicles
+ Life Insurance
+ Family-Owned Businesses
+ Cars/Boats
+ Jewelry / Furs / Art / Collectibles
+ Assets on Safe Deposit Boxes
+ Assets in Living Trusts
+ Annuities and retirement accounts
+ Money owed to you
It Also Includes Outstanding Liabilities
– Mortgages
– Investment-Related Debts
– Personal Loans / Debts
– Tax Liabilities
When and How Taxes Are Paid
• Estate taxes are due nine (9) months after death
• Must be paid in CASH
• Assets to help pay estate taxes:
– Liquid assets
– Life insurance
Understanding Federal Estate and Gift Tax Exemptions Under the Terms of the 2017 Tax Reform Act
Portability of Exemptions Between Spouses
• Surviving spouse may take advantage of full $22,360,000 exemption
• Must be U.S. citizens
• Applies only to Federal estate taxes
Strategies and Structures
Marital Exemptions and Trusts
• Transfers between U.S. citizen spouses during lifetime or at death
• Transfers may be made either outright or in trust
• No monetary limit to the amount of transfer to US citizen spouse
Revocable Living Trust
• Legal arrangement to manage and transfer assets/property
• Allows for complete control
• Avoids probate when properly funded
• Privacy
• Provides continuity of management
• Experienced and professional asset management
Irrevocable Living Trust
• Protection of Assets
• Avoid Estate tax
• Avoid Probate
• Qualifying for Medicaid
• Privacy
• Retain Cash Flow
Contact us at (347) 565-0512 to learn more.