Ohio National Financial Services. - Agent Name - Designations - Name of Office. 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. Estate Planning Opportunities.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Ohio National Financial Services - Agent Name - Designations- Name of Office
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.
Estate Planning Phases: 1 Accumulation 2. Conservation 3. Distribution
Impediments to a Well-Planned Estate • Failure to plan • Outdated plans • Improper tax planning • Improper asset positioning • Failure to consider inflation • Lack of liquidity • Procrastination
Meet The Estate Planning Team Insurance Specialist Financial Planner Attorney CLIENT Accountant Trust Officer
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
Triggers for Review Marital status Birth Tax laws Income Employment Property CHANGE
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
The Estate Tax Bite in 2009 *Combined federal and state taxes. Assumes a state death tax with a $1 million exemption.
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Tax Roller Coaster • Phase One: 2009 • Exemption amount $3.5 million • Top tax rate 45% • Phase Two: 2010 • Estate tax repealed (for one year only) • Phase Three: 2011+ • Estate tax returns with $1 million exemption and 55% top rate
Example: $4 Million Estate * Assumes 5% annual growth
Types of Taxes • Federal estate tax • State death tax • Generation skipping transfer tax
Deductions and Credits Estate Tax Deductions • Marital deduction • Charitable deduction Estate Tax Credit • Applicable credit amount
A Will Allows You to: • Control disposition of your assets • Name a personal representative • Save taxes • Designate a guardian for your children • Disinherit someone
Complexity of a Will • Size of estate • Nature of property • Distribution plan • Estate tax savings
Terminology • Testator • Executor/executrix • Administrator/administratrix • Per stirpes • Per capita • Codicil
State Law Requirements • Legal capacity • Age • Mental competence • Signatures • Witnesses
Intestate Succession (a.k.a. Laws of Descent & Distribution)
Intestacy 1/3 to all of Assets (depends on state law) Parents Next of Kin Surviving Spouse Remaining Assets Children Siblings State
Disadvantages of Dying Without a Will 1. Rigid state law 2. Outright distribution to children 3. Forgotten persons 4. Tax disadvantages 5. Personal representative
Ownership of Property • Type • Value • Method of ownership
Ownership of Property • Individually owned • Community property • Joint with the right of survivorship • Tenancy in common
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
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.
Variations of Marital Deduction • Specific dollar amount • Percentage of estate • Entire estate (maximum) • Credit trust
Trusts . . .one person holds legal title to an asset and manages it for the benefit of another.
Trusts are Typically Set Up for the Benefit of: • Spouse • Children • Grandchildren • Charitable organization
Reasons for Trusts • Tax savings • Control and management of assets • Privacy
Types of Trusts • Testamentary • Living
Living Trusts • Complex estate • Real estate located in several states • High probate costs • Privacy • Fear of will contest
Types of Trusts • Revocable • Irrevocable
The Credit Shelter Trust (a.k.a. Bypass Trust)
Estate Tax Credit Amount • $2,000,000 asset value • $780,800 tax credit • (for 2008)
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
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
Comparison of Wills Simple Will Credit Trust $3,620,780to children $4,000,000 to children (0% shrinkage) $379,220 to government (9% shrinkage)
Available to Surviving Spouse • All trust income • Part of the principal using an ascertainable standard • 5% or $5,000
A Double Winner • Estate tax savings • Cost-effective method of providing estate liquidity
Advantages • Provides estate liquidity • Avoids estate taxes • Provides income for family • Avoids probate costs and process • Provides for asset management