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ESTATE PLANNING SEMINAR
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ESTATE PLANNING SEMINAR

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  1. ESTATEPLANNINGSEMINAR Harley K. Look, Jr. Katz, Look & Moison, P.C. 1120 Lincoln Street, Suite 1100 Denver, CO 80203 303-832-1900

  2. No Legal Advice These seminar materials and the seminar presentation are intended to educate, and are provided for informational purposes, only. The materials and the comments made by the presenter do not constitute legal advice and may not be relied upon in any particular fact pattern. The seminar host, presenter, and their employers and employees do not assume any responsibility for any reliance on the information presented in association with this seminar. Each seminar attendee should independently verify all statements made in this seminar and seek independent advice before using any seminar information.

  3. FourWs • W • W • W • W

  4. FourWs Who- Who receives the benefits? W W W

  5. WHO ? Attorneys Funeral/Burial/Cremation IRS Creditors Family

  6. WHO ? Family ½ Spouse ½ Children

  7. CHOICE • What happens if you do not have a Will? • Guardians for minor children. • Foster home? • Minors are legally incapacitated. • Inflexibility. • Courts. • Intestacy. • Attorneys. • Children are adults at 18.

  8. WHO? No Spouse or Children Parents

  9. WHO? No Parents Siblings Nieces & Nephews Laughing Heirs Children Parents State

  10. CHOICE What is your choice? • Who do you want as your beneficiaries? • Who do you want to handle your estate?

  11. CHOICE • Escheat - State of Colorado. • Personal Representative - Creditors? • Where do we find friends or charities? NOWHERE!

  12. Four Ws • Who • What • W • W

  13. WHAT? • What is the nature of the property? • One farm, ranch or business. • Where is the property located? • All in Colorado ( Uniform Probate Code) • Other than Colorado (Ancillary Probate) • Do you have a personal property memorandum?

  14. Four Ws • Who • What • When • W

  15. CHOICE • Timing is important. EXAMPLE • You have a wife and two children. • Your son is through college but your daughter is not. • What ages do you want for distribution to your children?

  16. CHOICE • TRUST = PROTECTION • Protection from: • The courts • Themselves TRUST

  17. CHOICE • You get to pick whom you trust = TRUSTEE

  18. CHOICE TRUST DISTRIBUTION* Two Children Son Daughter 1/3rd at 25 1/3rd at 30 & 1/3rd at 35 * This is determined in your discretion.

  19. Four Ws • Who • What • When • Way

  20. CHOICE • A WILL IS A WAY • The Will is a tool • It disburses only on death • A Trust to control beyond death • Gift $13K per year per beneficiary • A seminar focuses on the WAY • A planner doesn’t know the other three Ws until the planner meets with the client.

  21. CHOICE • There are thousands of ways. We will organize them into three categories: • 1. Title- Joint Tenancy (WROS) • 2.Direct Transfer- Beneficiary • Insurance • Retirement Benefits • 401(k) • IRAs • Annuities • Payable on Death • Beneficiary Deed 3.Probate

  22. What is Probate • Probate is to prove the validity of the Will, whether it’s yours or the state’s. • Colorado has the Uniform Probate Code II • Simplified process

  23. Typical Situation It usually passes from husband to the wife to the children.

  24. Unlimited Marital Deduction If it goes from husband to wife*, there is an unlimited marital deduction and there is no estate tax. Estate Tax *A U.S. Citizen

  25. CHOICE • Non-probate transfers. If the property is in joint tenancy or directly transferred, then there is no probate. • No Probate = No Problem?

  26. PROBLEM $500,000 estate New Husband/ New Wife Step Children Creditors Courts Attorneys Third Parties IRS

  27. EXAMPLE • Estate worth: $2.0 Million • The tentative tax in 2011: $ 780,800 • Applicable Credit in 2011; tax on $1.0 Million = $ 345,800 • Net Tax due = $ 435,000 9 months after death

  28. SOLUTION ESTATE PLANNING TABLE FinancialPlanning LegalPlanning No Planning Income DGFPOA* Court - $650,000 Attorney appointed by court Health HCPOA* +HIPAA Long Term Care Living Will 15 years in court Life Insurance Will Mess

  29. SOLUTION ESTATE PLANNING TABLE • Legal forms vs. legal services • DGFPOA- Durable General Financial Power of Attorney • HCPOA- Health Care Power of Attorney plus HIPAA Authorization and Release • These two documents, along with the Living Will are legal seatbelts.

  30. Trust Protection It usually passes from husband to the wife. NO TAX Shelter $250,000 Don’t leave assets to each other, leave assets for each other. Shelter $250,000 Then to the children. Potential TAX TRUST

  31. PROBLEM $500,000 estate New Husband/ New Wife Step Children Creditors Courts Attorneys Third Parties IRS

  32. CHOICE • Ways: • 1. Title- Owner • 2.Direct Transfer- Beneficiary • Insurance • Retirement Benefits • 401(k) • IRAs • Annuities • Payable on Death • Revocable Living Trust • 3. Probate • Testamentary Trust

  33. CHOICE • Trust = Protection Less than or equal to $3.5 Million - exemption Husband & Wife - Trustees Survivor - Trustee Survivor + Children Co-Trustees $3.5 Million exemption Children- Unlimited Growth- No Estate Tax $7,000,000.00 Age25 30 35 Age25 30 35

  34. Four Elements of a Trust • Owner • Trustee • Beneficiaries • Assets

  35. CHOICE • There are thousands of ways • We will break it into three categories: • 1. Title - Owner • 2. Beneficiary • Insurance • Retirement Benefits • 401(k) • IRAs • Annuities • Payable on Death • 3. Probate FUNDING* * Funding is important!

  36. FUNDING • Put Assets in the Trust • Retirement • Insurance • Investments • Deeds

  37. WHERE DO YOU GO NOW ? • Review current documents • Research internet • Martindale Hubbell • www.martindale.com • Lawyers.com • www.lawyers.com • Review their grading system • AV • BV • CV

  38. SUMMARY • 4 Ws • Benefit of planning • Choices • Four legs • Powers of Attorney • Probate • Trusts • Funding • Advanced Planning

  39. THANK YOU Harley K. Look, Jr. Katz, Look & Moison, P.C. 1120 Lincoln Street, Suite 1100 Denver, CO 80203 303-832-1900