Estate Planning Chapter 1

Front 1

Estate Planning

Back 1

The accumulation, conservation, and distribution of an estate; minimizes taxes, probate costs, and other related expenses but is consistent with one's lifetime goals

Front 2

Purpose of Estate Planning

Back 2

To develop a plan that will enhance and maintain financial security of clients and their families

Front 3

Tax Systems

Back 3

Transfer Tax and Income Tax

Transfer Taxes: Gift, Estate, Generation Skipping Transfer Tax (GSTT), and Qualified Domestic Trust (QDOT)

Front 4

Life Estate

Back 4

Property interests for the life of the estate owners with certain limitations on the life tenant's use of the property

Front 5

Fee Simple Absolute

Back 5

Interest that belongs absolutely to the estate owner, the heirs, and assigns forever without condition or limitation

Front 6

Property Ownership Rights

Back 6

Real
Personal
Tangible
Intangible

Front 7

Statute of Wills

Back 7

1540 AD
Gave all those except married women, infants, idiots, and the insane the right to dispose of most of their property by written instrument

Front 8

Impediments to a well planned estate

Back 8

Failure to plan
Outdated Plan
Overlooked Provisions
Improper Tax Planning
Improper Ownership of Assets
Failure to Plan for Disability, Last Illness, Job Change, or Loss
Failure to Consider Inflation
Lack of Liquidity
Psychological Impediments
Procrastination

Front 9

Intestate Succession Statutes

Back 9

Each state's statutory plan that clearly provides for the distribution of a decedent's probate property

Front 10

Intestate

Back 10

A decedent dies intestate when they die without a will

Front 11

Escheat

Back 11

A reversion of property to the state in the absence of legal heirs

Front 12

Will

Back 12

A legal instrument whereby a person makes disposition of his or her property to take effect after death

Front 13

Codicil

Back 13

An amendment to a will

Front 14

Equitable Apportionment

Back 14

Requires that apportionment of taxes be made in the proportion that the value of the interest of each person interested in the estate bears to the total value of the interests of all persons interested in the estate

Front 15

Residuary Clause

Back 15

Provides for the transfer of unexpected, unknown, or forgotten assets, as well as assets acquired in the future, to the listed party

Front 16

Tax Bracket Creep

Back 16

The movement to a higher tax bracket, especially due to inflation

Front 17

Assessing Liquidity Needs

Back 17

(1) Amount and terms of debt of the estate owner
(2) Projected Tax Liability
(3) Type of assets in estate

Front 18

Common Overlooked Provisions

Back 18

Guardianship
Simultaneous Death
Tax Apportionment

Front 19

Estate Planning Process

Back 19

(1) Data Gathering Interview
(2) Evaluation of an Existing Plan
(3) Development of Estate Plan
(4) Client Review and Approval of Plan
(5) Implementation of Plan
(6) Periodic Review of Plan

Front 20

Advantages of a Well-Planned Estate

Back 20

(1) Property distribution according to the decedent's wishes
(2) Tax saving options
(3) Appropriate ownership of assets
(4) Disability and last illness preparedness
(5) Liquidity needs assessment
(6) Personal peace of mind

Front 21

Estate Planning Team

Back 21

Financial Planner
Attorney
Bank Trust Officer
Insurance Specialist
Accountant
Investment Couselor

Front 22

General Boundaries for Authorized Practice of Law

Back 22

(1) Attorney- Legal advice/drafting documents
(2) Bank Trust Officer- Trust tax advice
(3) Accountant- Tax advice and estate planning
(4) Insurance Professional- Advice on estate planning/liquidity
(5) Investment Specialist- Estate liquidity and taxation of investments