MM Woodland Heights Nov 2012

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Mark Magruder, EA Financial Advisor James Clymer Attorney Estate Planning: Establishing a Will or Trust

Estate Planning from a Christian Worldview :

God expects us to plan. Be a blessing to your children. Proverbs 13:22 An inheritance is to be expected. Proverbs 19:14 Planning leads to profit. Proverbs 21:5 The foolish man doesn’t save. Proverbs 21:20 The foolish man doesn’t plan. Proverbs 22:3 We should know our net worth. Proverbs 27:23-24 Why? Because, no man has power over the day of his death. Ecclesiastes 8:8 Estate Planning from a Christian Worldview

Estate planning is often avoided.:

Estate planning is often avoided . “Estate planning is confusing.” “I don’t want to think about death.” “I don’t think I have a large enough estate.” “The topic is too overwhelming.” “The Lord is coming soon – who cares?” “I don’t know who to name as guardian.” Write down your reason _____________.

I. When Do I Need Estate Documents?:

I. When Do I Need Estate Documents ? The moment you start a family. Business planning or ownership. Any time you own assets in your name alone. Everyone should have a Will, some need more.

II. A Christian Will:

II. A Christian Will What should a Will include? Your Testimony and Challenge Charitable Planning for Ministry Provisions for Your Children Did you forget one? Christian Schooling or College? Guardian, Trustee & Executor Did you provide for backups? What age are they to receive the money? Proper Witnesses Memorandum and Self-Proving Affidavit

III. What other legal documents do I need?:

Power of Attorney - Legally appoints a personal representative Choose a backup Can be dangerous in the wrong hands But a lifesaver in others Needed by everyone , especially as you approach retirement Is not used after someone dies III. What other legal documents do I need?

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B . Health Care Directive - also called a Medical Power of Attorney. “Keep me alive forever” or “Let me die in peace—pull the plug.” It’s OK to talk about Living Will should contain new HIPAA language to avoid problems with doctors and hospitals.

IV. What is a Living Trust and when do you need one?:

IV. What is a Living Trust and when do you need one?

A Living Trust:

A Living Trust Provides for ongoing management. Avoids the cost and delays of probate. Avoids ancillary probate . A must for the residents of some states. Is more complex and costly to draft. Still need a basic will. All titled assets need to be re-titled into the trust: house, investments, etc. Usually for larger estates.

IV. What is Probate & how can you avoid it?:

IV. What is Probate & how can you avoid it? A. Probate - A legal process used to transfer assets Occurs in every state where you own real estate or other titled/deeded assets. Probate is very easy in some states and very costly & troublesome in others. Attorney fees can be costly and vary by state. It usually takes 1 year or more to settle an estate.

B. Probate can be avoided.:

B. Probate can be avoided. Through a living trust. Through proper titling of accounts. Through beneficiary designations. Annuities, IRAs, life insurance, etc. By not owning any titled property at death.

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Note: Many people are under the mistaken impression that having a Will avoids probate. That is not the case. In fact, the term probate comes from a Latin word meaning “to prove” (or establish the validity of) a Last Will and Testament. There are many reasons why you should have a Will, but having a Will does not avoid probate.

V. Proper Titling of Assets.:

V. Proper Titling of Assets. A. Joint Tennant with Right of Survivorship - JTWROS Owned usually by husband & wife equally. Not retirement accounts. Automatically transferred to single ownership upon death of the first spouse.

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B . Transfer on Death - TOD Owned individually or jointly. Transferee has no legal interest until death of owner(s). Used for securities and investments. C . In Trust For - ITF Owned individually or jointly. Transferee has no legal interest until death of owner(s). Used for checking & savings accounts.

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D . Retirement Accounts Such as IRA, Roth, 401(k), 403(b), Pensions, and Annuities. There can only be one owner. Spouses cannot be left off as beneficiary in Pennsylvania unless agreed upon with notarized signature. Secondary beneficiaries would get benefit if primary beneficiary is not alive.

V. What Else Should You Know?:

V. What Else Should You Know? A. Federal Estate Tax – also called the “Confiscation Tax,” this can take up to 50% or more of your estate at death. Avoid by planning ahead. Avoid by including a “disclaimer trust” in your W ill or Living Trust. It’s a moving target.

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B . Income Tax Changing asset titles may have an income and/or gift tax consequences. Tax consequences may be for current and/or future owner. It’s also a moving target.

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Drafting a Christian’s Will is your final act of stewardship. Consider what’s important to you as a believer and protect your family. Remember Proverbs 22:3 What does a wise man do?

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Still need help or have personal questions? Call to schedule a free consultation. Please pass in the data sheets for the Christian’s Will. Time for Questions ??? For a Financial Advisor with a Biblical World View or to locate a Christian attorney please visit our website or call us at (800) 688-5800 Securities and Advisory Services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC