Presentation Transcript

1. BASIC CALIFORNIA ESTATE PLANNING _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Lindsay Sellers, J.D. USC Office of Gift Planning
2. TODAY’S TOPICS Planning starts with goals & values – strategies & techniques follow Everyone should have an estate plan Planning for potential diminished capacity Update on 2014 Estate and Gift Tax Communicate with family and advisors
3. GOALS AND VALUES Set your goals Communicate your values – in words, deeds and estate plan Strategies and techniques follow goals and values
4. ESSENTIAL ESTATE PLAN Everyone needs an estate plan Foundational documents: A Will Revocable Living Trust Power of Attorney for Financial Matters Power of Attorney for Health Care
5. LAST WILL AND TESTAMENT Most Wills are “pour over” Wills used in conjunction with an existing revocable Living Trust If a Will is used as the only estate planning document, it will have to be submitted to the local Probate Court at death for a supervised administration process (2-3 years) Executor administers a Will and may have to post a “bond”
6. REVOCABLE LIVING TRUST Living trusts can be individual or joint (spouses) Living trusts may be changed at any time by a signed amendment made by the creator(s) of the trust Joint living trusts generally become partially irrevocable (i.e. unchangeable) at the death of the first creator Can be funded during life without altering ability to access , invest, and spend assets Biggest advantage - fully funded living trusts avoid the need for probate at death of creator(s) Protection for children of prior marriages General Assignments
7. ORGANIZATION IS KEY Keep an updated inventory of assets Keep important documents in a safe place – easy to remember and where others know Give copies to your advisors
8. “TITLE” TO ASSETS – IMPORTANT Know how title is held for every asset “Funded” living trust Real estate – joint tenancy, community property, tenants in common Successor beneficiary designations: Pensions/IRAs/retirement plans Securities and bank accounts Life insurance
9. UPDATE YOUR PLAN Tax laws change Your goals and values change Your family changes Your advisors change Your estate planning documents may need to change too!
10. DIMINISHING CAPACITY Risk of diminishing mental or physical capacity is a reality of aging. How can you protect yourself? How can powers of attorney help? If you have a funded Living Trust, Successor Trustees have the power to continue to administer your assets while you are alive.
11. POWERS OF ATTORNEY Management of Non-Trust Assets During Life Who should be your attorney-in-fact? If more than one – must they act jointly? What powers should they get? When should they get them? Immediately (i.e. to be able to use it if you are unavailable) or only upon your incapacity? Can be used to fund a Living Trust prior to death
12. HEALTH CARE POWERS Communicate wishes with your doctors & person with the power Fill out forms at hospitals/clinics California Medical Association – Advanced Health Care Directive Kit Options: Organ donation Life support preferences Religious or other special directives
13. FIND TRUSTED ADVISORS Accountant, attorney, financial planner, insurance agent Select them carefully Communicate honestly and openly with them Estimated Legal Costs: $2K-$5K Follow their advice!
14. 2014 ESTATE AND GIFT TAX Estate tax exemption: $5,340,000 per person ($10.68M per couple) “Portability” of spousal exemption Tax rate – maximum rate of 40% Gift tax exemption: $5,340,000 for lifetime gifts $14,000 annual exclusion amount per donor, per donee Education and medical expenses
15. WE ALL LEAVE A LEGACY Avoiding Pitfalls from Bad Planning Caveat - different treatment of relatives in estate plan sometimes alienates family members California-specific issues - litigation, community property disputes, delays, administrative and probate court expenses Prop 13 and Prop 58 – exceptions to avoid reassessment of real property for property tax purposes upon a transfer to someone other than your living trust or your spouse
16. WE ALL LEAVE A LEGACY Intangible Benefits of an Estate Plan Your own peace of mind Bring and keep family together Provide for loved ones Protect your heirs If important, support philanthropy
17. USC Office of Gift Planning (213) 740-2682 usc.plannedgiving.org Lindsay Sellers, J.D. Director of Gift Planning lsellers@usc.edu