Friday, December 12, 2014

Estate Planning

I am getting ready to shoot a video on estate planning.  I thought my notes might be of interest so some of you.

Planning Your Estate
     Estate planning is not just for the rich
          We all have an estate
     Inheritance tax rates
          Top rate is 40%
          First $5.43 million excluded from estate taxes in 2015
     Basic estate planning tools
          Benefits of a will
               Select your heirs
               Make gifts
               Name an executor
               Appoint guardians
               Specify funeral wishes
               Pet arrangements
               Reduce legal expenses
               Avoids in-fighting
          Financial power of attorney 
               Manage your financial affairs
                    Avoids conservatorship court process
          Living will
               What to do if you are placed on life support or can't speak for yourself
          Four parts
         Revocable living trust
              Can be modified or terminated
              Takes effect upon death
              You keep control over assets
              Avoids probate
                   Months, sometimes years to settle
                   3-5% of estate
         A-B or bypass trust
              Money left to spouse is not taxed
                   When surviving spouse dies, there are tax consequences if their estate exceeds exclusion amount
              A-B trust maximizes exclusion
              Trust income can be used by surviving spouse
     Marital transfers
          Unlimited without gift or estate taxes
          $14,000 per person, per year
     Charitable contributions
     Irrevocable life insurance trust
          Trust pays premiums
          Proceeds are not taxable to estate
     Family limited partnership
          Helps with succession of assets
          Taxes can be shifted to lower tax bracket members
     Qualified Family Owned Business Interests Exclusion

          Family owned businesses avoid estate taxes

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