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Presenters: Marsha Goetting Joel Schumacher

Estate Planning Tools & Tips: Avoiding Probate with Beneficiary Deeds, PODs, TODs, and other Beneficiary Designations April 19, 2012. 2. 2. Presenters: Marsha Goetting Joel Schumacher. Extension Economics Specialists Department of Agricultural Economics & Economics. 3. Sponsors.

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Presenters: Marsha Goetting Joel Schumacher

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  1. Estate Planning Tools & Tips: Avoiding Probate with Beneficiary Deeds, PODs, TODs, and other Beneficiary DesignationsApril 19, 2012 2 2

  2. Presenters:Marsha GoettingJoel Schumacher Extension Economics Specialists Department of Agricultural Economics & Economics 3

  3. Sponsors 4

  4. Solid FinancesWeb site www.msuextension.org/solidfinances 5

  5. Probatein Montana 6

  6. What is probate? Process of settling the estate to be sure Property is transferred to appropriate heirs Debts paid Taxes paid 7 7

  7. Non Probate Joint Tenancy with right of Survivorship Contractual Arrangements Assets in pension plan 8 8

  8. What would be the maximum dollar ($$$$) Montana law allows to an attorney to settle $200,000 estate? CDs Mutual Funds House 9 9

  9. Question A: Attorney maximum settle $200,000 estate • $65,300 • $45,800 • $25,600 • $15,500 • $10,900 • $ 6,600 10 10

  10. Cost of probate Montana Statutory limits for personal representative 2% of first $40,000 3% in excess of $40,000 11 11

  11. Cost of probate Montana Statutory limits for attorney 1 ½ times amount that was allowable to the personal representative 12 12

  12. Cost of probate$200,000 estate Personal representative $4,400 Attorney $6,600 TOTAL = $11,000 13 13

  13. Hourly Fee Basis Based on time involved in settlement of estate Ask attorney about method used 14

  14. Probate Forms Informal Probate With will packet Without will packet 15

  15. Montana Probate Forms State Law Library http://courts.mt.gov/ library/topic/end_life. mcpx 16 16

  16. Cost of probate$2 million estate Personal representative $39,200 Attorney $59,250 TOTAL = $98,450 17 17

  17. Contract: Life Insurance Bill Vere 18 18

  18. Beneficiary Bill has $100,000 life insurance policy Designates Vere as his primary beneficiary 19 19

  19. Bill Writes Will “I bequest all life insurance proceeds to my son, Chris Shelton.” 20 20

  20. Question B: Who gets $100,000? 1. Vere?Designated beneficiary 2. Chris? Devisee in will that was written more recently 21 21

  21. $100,000 Life Insurance Proceeds Vere Why? Contract Vere is designated beneficiary on form 22 22

  22. Changed situationBill & Vere are divorced Bill Vere 23 23

  23. Beneficiary Bill has $100,000 life insurance policy Vere, his former wife is still his primary beneficiary 24 24

  24. Bill has remarried Bill & Vere had 3 children Bill is now married to Mary 25 25

  25. Who gets $100,000? Vere - Former wife Mary - Present wife Kids of Bill & Vere’s State of Montana…no will 26 26

  26. Question C: Who gets $100,000? • Vere • Mary • Kids • Montana 27 27

  27. $100,000 Life Insurance Proceeds Kids Why? Montana code: 72-2-814 Revokes any revocable disposition to a former spouse that was executed before the divorce 28 28

  28. Retirement Plan Beneficiary Designations IRAs 401 k 403 b 457 29 29

  29. Life Insurance, Retirement Plan Benefits Do not go through probate Pass directly to beneficiary 30

  30. Question D: Have you added a POD or TOD to your financial accounts? • Yes • No 31 31

  31. Payable on Death Designation (POD) Accounts at financial institutions Savings Accounts Certificates of Deposit Checking Accounts 32 32

  32. Payable on Death Designation (POD) At death ownership passes to POD beneficiaries No Probate 33 33

  33. Payable on Death Designation (POD) Sole Ownership of account Marsha A. Goetting POD Debbie Buczinski and Donna Chamberlain, equally 34 34

  34. Joint Tenancy & POD Wording on account Barb Miller & Jack Miller joint tenants with right of survivorship POD Charles Miller and Kathy Miller, equally 35 35

  35. Beneficiary Designation POD Payable on Death designation allowed on MSA 36

  36. Transfers on Death (TOD) Registration No probate Stocks, publicly traded Bonds Mutual Funds 37 37

  37. Transfers on Death (TOD) Registration Transfers ownership of stocks, bonds, mutual funds to heirs They determine whether to sell or keep 38 38

  38. Question E: Now that you know about PODs & TODs will you utilize these estate planning tools? • Yes • No 39 39

  39. Question F: Have you filed a Montana beneficiary deed on your real property? • Yes • No • Don’t have real property 40 40

  40. Real Property TransferMontana Beneficiary Deed 41 41

  41. What is a Beneficiary Deed? A way to convey real property to one or more grantee beneficiaries upon death without the cost of probate 42 42

  42. What is a Grantee Beneficiary? Party to whom an owner grants interest in Montana real property 43 43

  43. Grantee Beneficiary Rights? NONE Effective only upon death of owner Can’t use for collateral Can’t sell Is not owner 44 44

  44. Beneficiary DeedRecorded Before death of owner Clerk and Recorder Montana county where property is located 45 45

  45. Who can be a grantee beneficiary? Spouse Children Relatives Friends Corporation 46 46

  46. Who can be a grantee beneficiary? • Charitable Organizations • Government Agencies • MSU Extension • Montana State University 47 47

  47. What happens if grantee beneficiary dies before owner? 48 48

  48. Owner options Specify a successor beneficiary 49 49

  49. Mark files & records 50 50

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