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Family Wealth Planning

Family Wealth Planning. FWP is an extremely broad topic. It has been defined as the accumulation, conservation, and distribution of wealth. The practice of estate planning is broader than this definition and reaches the personal life of the client, the client’s family and business.

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Family Wealth Planning

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  1. Family Wealth Planning • FWP is an extremely broad topic. It has been defined as the accumulation, conservation, and distribution of wealth. The practice of estate planning is broader than this definition and reaches the personal life of the client, the client’s family and business.

  2. Family Wealth Planning • Personal Profile • Assets • Liabilities • Responsibilities • Personal choices

  3. Family Wealth Planning • Form of Property Ownership • Individual • Tenancy in Common • Joint Tenancy (JTROS) • Tenancy by the Entireties • Community Property • Living Trust

  4. Family Wealth Planning • Living Trust A will substitute in which an individual transfers assets into a revocable trust and usually remains as trustee and beneficiary. At death the assets are managed/ distributed according to the terms of the trust. There are NO greater tax benefits than those available using a tax planned will. Assets in a living trust are not subject to probate. Probate is usually a simple process in PA and NJ

  5. Family Wealth Planning • Living Trust • Assets owned by Trust • Revocable • Grantor is Trustee and Beneficiary • Successor Trustee • Future Incompetency • Privacy

  6. Family Wealth Planning • Living Trust (cont.) • Avoid Probate • No Automatic Tax Savings

  7. Family Wealth Planning • Effect of Contract • Retirement plans and IRAs - N.B. Qualified retirement plan and conventional IRA assets are subject to income taxes in addition to death taxes. • Life insurance • Business and marital agreements

  8. Family Wealth Planning • Wills and related issues • Intestacy • Identification of instrument, testator (rix) and domicile • Debts and taxes

  9. Family Wealth Planning • Wills and related issues • Property distribution • Form of ownership • Contracts • Miscellaneous personal property • Specific bequests • Residuary • Elective share

  10. Family Wealth Planning 1. Per Stirpes • By right of representation • Takes ancestors’ share 2. Per Capita • By head • Take in own right

  11. Family Wealth Planning Parent Child 1 Child 2 Grandchild 1 Grandchild 2 Grandchild 3

  12. Family Wealth Planning • Wills and related issues • Protection of dependents and others • Guardianship (choice of guardian) • Protective trusts (choice of trustee) • Life insurance • Spendthrift provision

  13. Family Wealth Planning Pot Trust (3 children) • Inc. & Prin. for benefit of all • When youngest reaches 23 • split into three shares / trusts • Issue of advancements • Terms of shares / trusts v. Separate Trusts / Shares 1/3 1/3 1/3

  14. Family Wealth Planning • Wills and related issues • Personal representative – executor (rix) • Fiduciary powers and duties • Accounting and bonding • Legal formalities • Self-proving

  15. Estate Administration • Decedent’s Personal Representative • executor/executrix • letters testamentary • administrator/administratrix • letters of administration • CTA (cum testimonium annexum) • trustee of living trust • Trust already owns the assets • Not really probate, but trust administration

  16. Estate Administration • Collect Assets • Preserve Assets • Pay Debts, Expenses and Taxes • Distribute Estate

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