1 / 22

Estate Planning

Estate Planning. Annie’s Project February 6, 2007 Coweta Oklahoma. Estate Planning - Introduction. A single correct answer does not exist. No perfect solution exists Laws change Family situations change Must evaluate the good points and bad points of each estate planning tool.

hiers
Download Presentation

Estate Planning

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Estate Planning Annie’s Project February 6, 2007 Coweta Oklahoma

  2. Estate Planning - Introduction • A single correct answer does not exist. • No perfect solution exists • Laws change • Family situations change • Must evaluate the good points and bad points of each estate planning tool. • The ultimate decision of what to do is yours.

  3. Estate Planning -- Objectives • Provide sufficient income to live comfortably and take care of emergencies. • Make sure assets go to those you want to receive them. • Minimize estate settlement costs.

  4. Estate Planning - Things to Keep in Mind • Keep it simple • Maintain flexibility to change your plans • Be sure to take care of yourself first • You worked hard to accumulate your estate, so enjoy it.

  5. Your Estate • Everything you own at the time of your death. Real Estate Personal Property Investments Business Interests Savings Accounts Survivor Pension Benefits Life Insurance Proceeds

  6. Gross Estate Appraised at Market Price • Total real and personal property • Full value of property owned in joint tenancy except that owned with spouse • One-half value joint tenancy with spouse • Insurance owned or controlled by decedent • Taxable portion of gifts included in tax base

  7. Taxable Estate Gross Estate = Value of All Property Owned Less Allowable Deductions

  8. Federal Allowable Deductions • Unified tax credit • Marital deduction - unlimited • Transfers to exempt charitable, religious, and similar institutions • Claims against estate, administration costs, funeral expenses, etc.

  9. Determining Basis of Property • Purchased Property - purchase price, plus capital improvements, less depreciation. • Gifts - Same as DONOR’S basis PLUS portion of any GIFT TAX paid. • Inherited Property - DECEDENT’S BASIS • Usually appraised • Value for Estate Tax Purposes

  10. Estate and Gift Tax Rules • Federal • Unified Credit • 2007 & 2008 - Can Transfer $2,000,000 • 2009 - $3,500,000 • 2010 - Estate Tax Repealed • 2011 & beyond - $1,000,000 (revert back to 2002 rules) • 100% Marital Deduction • Annual Gift Tax Exclusion • $12,000 ($24,000 for Couple using gift splitting)

  11. Estate and Gift Tax Rules Oklahoma • Unified Credit • 2007 - Can Transfer $1,000,000 • 2008 - $2,000,000 • 2009 - $3,000,000 • 2010 & beyond – Estate Tax Repealed • No Gift Tax (3 year contemplation of death rule still applies)

  12. Oklahoma Allowable Deduction • $1,000,000 to lineal and collateral heirs as of 1/1/07 • $1,000 burial lot or crypt • $500 monument • Debts of the estate, attorneys fees and others

  13. Property Transfer • Oklahoma law of descent • Will • Revocable living trust • Irrevocable living trust

  14. Wills -- Advantages • Leaves control with owner until death. • Can be changed easily. • May select executor. • May have executor serve without bond. • May name guardian (recommendation). • Covers all property not held in joint tenancy except insurance.

  15. A Living Trust Is... The convenient way to pass your estate to your heirs eliminating the stress and financial burden of lawyers, courts, or the probate system.

  16. Purpose • Avoid probate • Avoid guardianship • Help to reduce estate taxes • Reduce the emotional burden on loved ones by reducing estate settlement time and expenses

  17. Other Important Estate Planning Documents • Durable financial power of attorney • Durable health care power of attorney • Living will

  18. General Principles and Conclusions • All parents should retain enough assets to live comfortably and take care of any emergencies. • Not only is the best estate plan different for each family, but the best plan may change with changes in the estate or family. • Consult with a qualified estate planner.

  19. Conclusion Not one correct answer Things change: • Be aware of Oklahoma & Federal Estate Taxes • We don’t want to subject Estate to taxes more than once • If we have done a good job of Estate Planning, we will minimize estate settlement costs.

  20. Conclusion Estate Taxes and Probate • Be sure to take care of yourself first. • Don’t run out of money or property. • Make sure you make up your own mind and you feel comfortable with your decision. • Realize you will want to change your mind at some point in the future, so keep things flexible.

  21. References • F-771 Trusts: Uses and Considerations • F-773 Probate • F-782 Wills: Uses and Considerations

  22. Homework Assignment Determine if you have an Estate Plan and review the document(s).

More Related