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ESTATE PLANNING SEMINAR. Harley K. Look, Jr. Katz, Look & Moison, P.C. 1120 Lincoln Street, Suite 1100 Denver, CO 80203 303-832-1900. No Legal Advice.

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estate planning seminar

ESTATEPLANNINGSEMINAR

Harley K. Look, Jr.

Katz, Look & Moison, P.C.

1120 Lincoln Street, Suite 1100

Denver, CO 80203

303-832-1900

no legal advice
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.

four ws
FourWs
  • W
  • W
  • W
  • W
four ws4

FourWs

Who- Who receives the benefits?

W

W

W

slide5
WHO ?

Attorneys

Funeral/Burial/Cremation

IRS

Creditors

Family

slide6
WHO ?

Family

½ Spouse

½ Children

choice
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.
slide8
WHO?

No Spouse or Children

Parents

slide9
WHO?

No Parents

Siblings

Nieces & Nephews

Laughing Heirs

Children

Parents

State

choice10
CHOICE

What is your choice?

  • Who do you want as your beneficiaries?
  • Who do you want to handle your estate?
choice11
CHOICE
  • Escheat - State of Colorado.
  • Personal Representative - Creditors?
  • Where do we find friends or charities?

NOWHERE!

slide12

Four Ws

  • Who
  • What
  • W
  • W
slide13
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?
slide14

Four Ws

  • Who
  • What
  • When
  • W
choice15
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?
choice16
CHOICE
  • TRUST = PROTECTION
  • Protection from:
    • The courts
    • Themselves

TRUST

choice17
CHOICE
  • You get to pick

whom you trust = TRUSTEE

choice18
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.

slide19

Four Ws

  • Who
  • What
  • When
  • Way
choice20
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.
choice21
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

what is probate
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
typical situation
Typical Situation

It usually passes from husband to the wife to the children.

unlimited marital deduction
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

choice25
CHOICE
  • Non-probate transfers. If the property is in joint tenancy or directly transferred, then there is no probate.
  • No Probate = No Problem?
problem
PROBLEM

$500,000 estate

New Husband/ New Wife

Step Children

Creditors

Courts

Attorneys

Third Parties

IRS

example
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

solution
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

solution29
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.
slide30

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

problem31
PROBLEM

$500,000 estate

New Husband/ New Wife

Step Children

Creditors

Courts

Attorneys

Third Parties

IRS

slide32

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
choice33
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

four elements of a trust
Four Elements of a Trust
  • Owner
  • Trustee
  • Beneficiaries
  • Assets
slide35

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!

funding
FUNDING
  • Put Assets in the Trust
    • Retirement
    • Insurance
    • Investments
    • Deeds
where do you go now
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
summary
SUMMARY
  • 4 Ws
  • Benefit of planning
  • Choices
  • Four legs
  • Powers of Attorney
  • Probate
  • Trusts
  • Funding
  • Advanced Planning
thank you

THANK YOU

Harley K. Look, Jr.

Katz, Look & Moison, P.C.

1120 Lincoln Street, Suite 1100

Denver, CO 80203

303-832-1900