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Ohio National Financial Services

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  1. Ohio National Financial Services - Agent Name - Designations- Name of Office

  2. The Ohio National Life Insurance Company and Ohio National Life Assurance Corporation issue a variety of life insurance and annuity products. Product availability varies by state.

  3. Estate Planning Opportunities

  4. Plan Now to Preserve Your Estate and Your Peace of Mind

  5. Estate Planning Phases: 1 Accumulation 2. Conservation 3. Distribution

  6. Impediments to a Well-Planned Estate • Failure to plan • Outdated plans • Improper tax planning • Improper asset positioning • Failure to consider inflation • Lack of liquidity • Procrastination

  7. Meet The Estate Planning Team Insurance Specialist Financial Planner Attorney CLIENT Accountant Trust Officer

  8. Steps to Successful Estate Planning 1. Inventory assets and liabilities 2. Determine goals 3. Consider tax ramifications 4. Develop an organized plan 5. Implementation 6. Periodic review

  9. Triggers for Review Marital status Birth Tax laws Income Employment Property CHANGE

  10. Your Estate Includes: • Property held in your name • Half the value of property owned jointly with your spouse • Percentage of property value owned jointly with others • Life insurance • Retirement plan values

  11. How Much of YourEstate is ReallyYours?

  12. The Estate Tax Bite in 2009 *Combined federal and state taxes. Assumes a state death tax with a $1 million exemption.

  13. The Estate Tax Roller Coaster • Phase One: 2009 • Exemption amount $3.5 million • Top tax rate 45% • Phase Two: 2010 • Estate tax repealed (for one year only) • Phase Three: 2011+ • Estate tax returns with $1 million exemption and 55% top rate

  14. Estate Tax Exemption Amounts

  15. Top Estate Tax Rates

  16. Example: $4 Million Estate * Assumes 5% annual growth

  17. Types of Taxes • Federal estate tax • State death tax • Generation skipping transfer tax

  18. Deductions and Credits Estate Tax Deductions • Marital deduction • Charitable deduction Estate Tax Credit • Applicable credit amount

  19. The Importance of a Will

  20. A Will Allows You to: • Control disposition of your assets • Name a personal representative • Save taxes • Designate a guardian for your children • Disinherit someone

  21. Complexity of a Will • Size of estate • Nature of property • Distribution plan • Estate tax savings

  22. Terminology • Testator • Executor/executrix • Administrator/administratrix • Per stirpes • Per capita • Codicil

  23. State Law Requirements • Legal capacity • Age • Mental competence • Signatures • Witnesses

  24. Intestate Succession (a.k.a. Laws of Descent & Distribution)

  25. Intestacy 1/3 to all of Assets (depends on state law) Parents Next of Kin Surviving Spouse Remaining Assets Children Siblings State

  26. Disadvantages of Dying Without a Will 1. Rigid state law 2. Outright distribution to children 3. Forgotten persons 4. Tax disadvantages 5. Personal representative

  27. Do You Have an Updated Will?

  28. Ownership of Property • Type • Value • Method of ownership

  29. Ownership of Property • Individually owned • Community property • Joint with the right of survivorship • Tenancy in common

  30. At A’s Death Type of Ownership Joint with right of survivorship B owns 100% of property A & B B Tenants in common A’s heirs now own A’s share A’s heirs A B B

  31. Probate vs. Non-Probate Property

  32. Marital Deduction • Unlimited estate tax deduction for property that passes to surviving spouse. Outright: $2,000,000 Decedent $2,000,000 Survivor $2,000,000 Taxes At First Death: $0 All To Survivor $4,000,000 The unlimited marital deduction postpones estate taxes until the death of the second spouse but does not eliminate the need to plan.

  33. Variations of Marital Deduction • Specific dollar amount • Percentage of estate • Entire estate (maximum) • Credit trust

  34. Trusts . . .one person holds legal title to an asset and manages it for the benefit of another.

  35. Trusts are Typically Set Up for the Benefit of: • Spouse • Children • Grandchildren • Charitable organization

  36. Reasons for Trusts • Tax savings • Control and management of assets • Privacy

  37. Types of Trusts • Testamentary • Living

  38. Living Trustsand Avoiding Probate

  39. Living Trusts • Complex estate • Real estate located in several states • High probate costs • Privacy • Fear of will contest

  40. Types of Trusts • Revocable • Irrevocable

  41. The Credit Shelter Trust (a.k.a. Bypass Trust)

  42. Estate Tax Credit Amount • $2,000,000 asset value • $780,800 tax credit • (for 2008)

  43. Simple Will $4,000,000To spouse $3,620,780 To heirs $4,000,000 Upon the second death Upon the first death All property to spouse Remaining property to children No Tax Tax $379,220 Estate Tax

  44. Credit Trust Upon the second death Upon the first death $2,000,000 $2,000,000 B B To trust $2,000,000 $2,000,000 A A To spouse $4,000,000To children $4,000,000 No Death Taxes

  45. Comparison of Wills Simple Will Credit Trust $3,620,780to children $4,000,000 to children (0% shrinkage) $379,220 to government (9% shrinkage)

  46. Available to Surviving Spouse • All trust income • Part of the principal using an ascertainable standard • 5% or $5,000

  47. Make the most of theEstate Tax Credit Amount

  48. IrrevocableLife InsuranceTrusts

  49. A Double Winner • Estate tax savings • Cost-effective method of providing estate liquidity

  50. Advantages • Provides estate liquidity • Avoids estate taxes • Provides income for family • Avoids probate costs and process • Provides for asset management