Slide 1:Estate Planning 101 presented by: Thomas G. Martin, Esq. [Prepared for the Long Beach Senior Center]


Thomas G. Martin :Thomas G. Martin Owner, Foresight Legal Group Yale College, B.A. (1993) UCLA Law, JD (1997) Estate Planning & Trust Council of Long Beach National Academy of Elder Law Attorneys LACBA, Trusts & Estates Section State Bar of Cal., Trusts & Estates Section


Disclaimer :Disclaimer This presentation does not constitute legal, accounting or other professional advice. Only through a personal, confidential consultation with qualified legal counsel can anyone properly evaluate their own unique estate planning challenges and determine what, if any, appropriate legal strategies and tactics should be implemented to meet those challenges.


IRS Circular 230 Disclaimer :IRS Circular 230 Disclaimer “Nothing in this presentation is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same.”


Agenda :Agenda To learn the following concepts: Facts & Figures Will vs. Trust What is Probate? What is Estate Planning?


Slide 6:Facts & Figures Essential data about the American public’s estate planning trends. 1


Slide 7:Source: Findlaw.com survey (June 30, 2008)


Slide 8:Source: Findlaw.com survey (June 30, 2008)


Slide 9:Baby Boomers


Slide 11:Source: U.S. Census Bureau 78.2 million Estimated number of baby boomers, as of July 1, 2005. 7,918Number of people turning 60 each day in 2006, according to projections. That amounts to 330 every hour. 50.8%Percentage of women baby boomers in 2005.


Slide 12:Will vs. Trust What is the difference between a will and a trust? 2


Slide 14:Will


Slide 15:Trust


Will :Will Upfront Cost is Minimal Effective Upon Death Requires Probate(s) Public Disclosure of Assets Court Fees based on Gross Value of Estate Can Take >1 yr. to Transfer Designate Guardians


Slide 17:A Living Trust can…


Save Timeby avoiding probate :Save Timeby avoiding probate Probating a simple estate will take at least 6 months. More complicated situations can take a year or more…


Save Moneyby avoiding probate :Save Moneyby avoiding probate If your Estate Assets = $500,000 Then Probate will cost you… Filing Fee = ($320) Attorney Fees = ($13,000) Executor Fees = ($13,000) Extraordinary Fees = ($??,???) Total Minimum Fees = ($26,320) Leaving Estate Assets = $473,680


Living Trust :Living Trust Upfront Cost is Greater Effective Upon Signing Avoids Probate No Public Disclosure of Assets Anticipates Incapacity Less Time to Transfer Assets Trust Administration Fees


Slide 21:What Is Probate? Required if Decedent dies intestate or with a will. 3


Slide 23:Probate is the legal process of proving a will, appointing an executor, and settling an estate. definition


Slide 24:Probate is required if gross value of estate exceeds: $20,000in Real Property $100,000in Personal Property (i.e., stocks, bonds, mutual funds, bank accounts, etc.) OR


Slide 25:Beneficiary DesignationsNot subject to probate (e.g., life insurance, Totten accounts, pay on death or transfer on death accounts)


Slide 26:Joint TenancyNot subject to probate But, subject to significant capitals gains and creditor divorce risks of new JT.


Slide 27:Probate Fees


Slide 28:$500,000Median Price for California Home Source: DataQuick Information Systems


Slide 29:Probate Fees


Slide 30:Estate Taxes


Slide 31:Procedure


Slide 32:What Is Estate Planning? Planning ahead. 4


Slide 35:Estate Planning is a comprehensive, rather than piecemeal, approach to individual asset transfer, tax, disability and guardianship issues. definition


Estate Planning Goals – While Living :Estate Planning Goals – While Living Provide for management of assets in the event of disability or incapacity Provide instructions for healthcare and financial decisions Protect assets from long term care costs Ensure special needs of children with disabilities are met


Estate Planning Goals – Before Death :Estate Planning Goals – Before Death Determine who gets what, how and when after death Maximize estate by reducing expenses and avoid delays Minimize estate and capital gains taxes Provide for children of separate marriages (blended families) Ensure children have guardians of parents’ choosing


Slide 39:Revocable Living Trust: An instrument that directs the disposition of your assets to your chosen beneficiaries and eliminates the need for probate and/or conservatorship proceedings with regard to all assets transferred into trust


Slide 40:Credit Shelter/Bypass Trust: An instrument for the benefit of married couples who are interested in minimizing estate tax and/or asset protection; it can also ensure that your spouse and children will be protected from lawsuits and unintentional disinheritance.


Slide 42:Pour Over Will: An instrument that ensures all property is transferred to your chosen beneficiaries, even if a particular asset was never transferred into trust during lifetime. Also provides for nomination of guardians for minor children.


Slide 43:Durable Power of Attorney: An instrument authorizing your spouse or another trusted person to sign documents on your behalf and handle your financial affairs; particularly helpful in the event of incapacity.


Slide 44:Advance Healthcare Directive: An instrument which provides directions to physicians and family members regarding continuation of life support systems and other medical treatment preferences.


Slide 45:Community Property Agreement: An Instrument which can be used to classify all property as community property in order to avoid capital gains tax upon the death of one spouse or as separate property.


Slide 46:Funding the Trust: Real estate (home, land, other real estate) Bank accounts, safe deposit boxes Investments (CDs, stocks, mutual funds, etc.) Notes payable (money owed to you) Life insurance (or use irrevocable trust) Business interests, intellectual property Oil and gas interests, foreign assets Personal untitled property


Slide 47:Incapacity/Disability Death


Review :Review We have covered the following concepts: Facts & Figures Will vs. Trust What is Probate? What is Estate Planning?


Slide 49:Questions?


Slide 50:Thank You!