The presentation was given by Chris Kampitis, via a webinar CFP
1. What does estate planning mean to you?
– Determine who will care for your children
– Structuring your finances so your loved ones are taken care of
– Establish who will handle your finances
– Deciding who will make medical decisions on your behalf?
– who needs estate planning
A. parents with their own children or financially irresponsible children
– Spouse with children from former marriages
– Grandparents who want to benefit and protect grandchildren
– Business owners who want to pass their business to children or others.
2. Permanent estate taxes
– 35- 40% you had to pay the estate tax rate.
– 2020 federal exemptions now 11.5 % for singles
– The government printing a lot of money due to the pandemic. Therefore, it is anticipated to increase the tax hike. Therefore, the estate tax may lower.
– If you live in certain states, you may have an estate tax. Or an inheritance tax
3. Avoiding the common mistakes.
a. make a plan
Make sure your wishes are carried out
– Avoid assets passing to the wrong person at the wrong time or n the wrong way
– Work with a team that includes a financial adviser
4. How to document your wishes
a. will
– For your things that don’t have a beneficiary like jewelry, of sports cards collection.
– Name your personal representative (executor) and guardian for minor children other children fate determined by judge/probate. Talk to your children, friends, and relatives about the notified property.
– Every Will comes with an executor. It is a tremendous responsibility and a lot of work. They will open and close the estate. They do paperwork that documents the assets. They notify creditors, pay debts, expenses, taxes. Distributes property per instructions in a will
– Submits paperwork to end proceedings. Don’t wait for your deathbed.
– Two documents a. health care power of attorney. A durable financial power of attorney. Even a college-age person should have access. Who will pay the bills?
– A living will present what treatments you do or don’t want. Needs to be updated every three yrs.
– HIPAA release needs to be updated every 3 years.
3. Set up guardianships for dependents.
a. if you don’t name a guardian form for chidden or a dependent with special needs, a judge will appoint one
– Be. Talk to the prospective guardian ahead of time.
c. the guardian does not have to be the same person who manages the money.
4. Consider trusts
a. what goes into the trust,
b. who gets what?
c. how and when it is distributed.
– This is not just for the wealthy.
Benefits of a trust
a. skip probate. The beneficiary may gain quick access to assets
b. fewer estate taxes may be due upon death because trust assets may not be considered part of the taxable estate
c. retain complete control even with complicated situations such as children from more than one marriage
d. protect your legacy from those who may not be able to manage money.
e. pay outside of probate, which results of lower court fees/taxes and remains private.
– Grantor: sets up the trust
– Beneficiary: recipients of trust benefits,
– Inferit? the use of what is granted
– Trustee: similar to the executor/ personal representative, but for a trust. Executes the grantor’s instructions found in terms of the trust.
Trust types:
– Charitable remainder trust: block of funds charitable remainder trust wants a charity to receive. – Can getting credit give a big tax deduction? In addition, can pull income from it each year.
– Revocable trust (living) versa irrevocable trust: You can switch the owner. It is a floating beneficiary. When a person dies> the trust activates for the beneficiary. Distributions may be given at age 21, 31, 40. It has its own tax id number.
– Testamentary trust: is inside of a will. Trust if given to a beneficiary.
Trust basics
a. state laws vary significantly and need to be considered.
b. choosing and creating a trust is a complex process
c. the guidance of an attorney with estate planning expertise is recommended.
d. federal taxes due to the recipient in five mo.
3. Health care power of attorney or proxies
c. durable financial of attorney
– Prepare for long-term care.
– If the home is paired off- they may use the home and not own in their own and put in trust. If you have health issues no one can come from the home.
– Income in respect: If you did not pay income tax or accrued income, you pay taxes.
– Keep beneficiaries updated:
– 401 K, Ira, insurance policy> assign beneficiaries.
– Make a list of your assets every 5 yrs.
– Don’t forget about digital imprint:
– Online storage photos and doc
– Loyalty programs
– Banks and investment firms
– Facebook, Twitter, YouTube. Google docs, Instagram
– eBay, PayPal iTunes.
– Have a digital fiduciary who would be given rights to access digital information and define where they would be found.
– Have a plan to shut down ‘online’ presence.
My Two cents:
Some corporations may offer an option to sign up service access to a layer for a yearly fee where you can hire a lawyer for a year. That was what I did to set up my trust. If you work for a corporation, see if that offer that.
