Estate Planning/WILLS

1. Estate Planning/WILLS

2. Estate All that a person owns, less all that person’s debts

3. If the deceased has executed proper legal documents (Will) • The activities of the estate will be carried out by the executor • Executor-person or institution named by the decedent to carry out these functions • If person dies without a will (intestate), the state will name an administrator who will carry out duties

4. The rights involved in estate planning • Estate taxes - legal entity is required to pay taxes • Inheritance taxes-those who inherit may become liable to pay taxes to the state.

5. Language of estate planning • Testator-person who makes out a will • Decedent-person who has died • Beneficiary-one who receives an inheritance • Contingent beneficiary-one who takes the place of named beneficiary who has already died • Bequest-specific property or money given to beneficiary

6. Language of estate planningCont. • Life Estate-form of bequest with some strings attached • Executor or Executrix-person or institution that one names in a will to handle the affairs of the estate • Administrator-appointed person if deceased does not have a will • Probate-court proceeding in which validity of will is established

7. Basic clauses of a Will • Introductory Clause • Revocation of Prior Wills • Debts and Final Expenses • Bequest Clauses • Survivorship Clauses • Appointment Clauses • The Execution

8. Changing a Will • 2 ways: • revoked by a brand new will • codicil-document used for minor changes • Cannot be legally amended by crossing out or adding words, removing or adding pages, making erasures • Copies: • attorney - original • keep a copy for yourself • bank if you have named them as executor or coexecutor

9. When should a Will be amended- reviewed every 3 years • Move to a different state • Changes in family circumstances • Substantial changes in assets and liabilities • Heirs have died • Executor or guardian dies • Tax laws changed

10. Uncommon Wills • Beware of “do it yourself” estate planning shortcuts • Holographic will - prepared in handwriting of testator • Noncupative will - spoken by the dying individual to another party

11. Other means to pass on wealth • Trusts-strings attached • Gifts-money can escape taxation • Insurance • Joint names

12. What should your state plan accomplish • Proper liquidity and distribution of assets • Program of sound management of assets • The assured continuation of a family’s lifestyle in the event of death, disability, or retirement • Minimize taxation • estate taxes • inheritance taxes • income taxes