Unit 8, part 1 Estate Planning: What is it? What Happens When I die? Common Goals, And Other Things You Should Know!What is Estate Planning?Slide 3Estate planning is more than making a WILLWhy Do I Need an Estate Plan?What are your Estate Planning Goals?What cash is needed at settlement time?Types of Property TransfersWho gets your Property if You Die Without A Will???Who Does Get Your Property WITHOUT a Will? If you are Married and survived by a spouse but no children or descendants of children surviving:Who Does Get Your Property WITHOUT a Will? If you are Married and Children or Descendants of children surviving:Who Does Get Your Property WITHOUT a Will? If you are Single or widowedSlide 13Who Does Get Your Property WITHOUT a Will?How Do You Own Your Property??Types of OwnershipSlide 17Slide 18Slide 19Slide 20Slide 21WILLS With or without a will, THERE ARE THESE CERTAINITES:Wills: A “will” is a legal instrument by which a person can provide for the distribution of their property after death.Wills: Why have one?Formal requirements of a WILL in North Carolina“Self Proved” WILLSModifying Your WillLifetime GiftsLifetime Gifts, Con’dAdvantages of Lifetime GiftsDisadvantages of Lifetime GiftsWhere Do I Start?Do Your Homework!PERIODIC REVIEW IS ESSENTIALUnit 8, part 1Estate Planning: What is it? What Happens When I die?Common Goals, And Other Things You Should Know!Chuck Moore, Department of Agricultural and Resource Economics, NC State UniversityAdapted for ARE 306What is Estate Planning?It IS:the orderly accumulation,the orderly conservation, and the orderly transfer of one’s property to the desired heirsWhat is Estate Planning?What it is NOT: only for “old” people only for the “rich” peopleIts probably more important for the young family with small children, moderate investment, and sizable debt than for,A person over 65, in retirement with grown childrenEstate planning is more than making a WILLIt includes:analysis of family situationexamination of how property is ownedwhom you want to get your “stuff”review of the family insurance programconsider gifts during life, may benefit both giver and recipientpossible disposition of property by sale during life for cash, installment sale, private annuity, part gift/part saleWhy Do I Need an Estate Plan?Everyone already has one-- it’s up to you to improve one it!To accomplish YOUR goals;To make sure what you want to happen really does happen!Who will care for your minor children?Who will handle you affairs?Who will receive your property?What are your Estate Planning Goals?Some Common Family Goals:For you and your spouse to be financially secure during retirementTo treat all children equitably (or equally?)To maintain the continuity of the businessTo help son/daughter get started in businessTo minimize estate taxes / settlement costsTo anticipate and plan for the cash needed at estate settlement timeWhat cash is needed at settlement time?Cash is needed for:1. Debts of the deceased:existing debts, medical bills, etc.2. Funeral Expenses3. Settlement costs:court costs, administrator’s/executor’s fees, bond costs, attorney’s fees, etc.4. Taxesfederal income tax, state income tax, federal estate tax, state estate tax, gift taxesTypes of Property TransfersSaleGiftLaws of intestate successionSurviving spouse-Tenancy by the entiretyJoint tenancy with right of survivorshipWho gets your Property if You Die Without A Will???Relatives as distant as the sixth degree.Who Does Get Your Property WITHOUT a Will?If you are Married and survived by a spouse but no children or descendants of children surviving:No Parent(s) SurvivingAll real and personal property goes to SpouseParent(s) SurvivingFirst $50,000 of personal property to the Spouse, then:1/2 of all remaining property to the spouse1/2 of all remaining property to parent(s)Who Does Get Your Property WITHOUT a Will?If you are Married and Children or Descendants of children surviving: One Child or DescendantsFirst $30,000 of personal property to Spouse, then:1/2 of all remaining property to Spouse1/2 of all remaining property to Child or DescendantTwo or more Children or their descendantsFirst $30,000 of personal property to Spouse, then:1/3 of all remaining property to Spouse2/3 of all remaining property to Children or DescendantsWho Does Get Your Property WITHOUT a Will?If you are Single or widowed Children or their descendants survivingAll real and personal property to Children or their descendantsParents surviving, but no Children or their descendants survivingAll real and personal property to Parent(s)Who Does Get Your Property WITHOUT a Will?If you are Single or widowed Brother(s) or Sister(s), but no Children or their descendants or Parent(s) survivingAll real and personal property to Brother(s) and Sister(s) or their DescendantsNo Children or their Descendants, No Parents, No Brother(s) or Sister(s) or their Descendants surviving1/2 to Paternal Grandparents, but if not surviving, then to Paternal Uncles, Aunts, and their Descendants, and 1/2 to Maternal Grandparents, but if not surviving, then to Maternal Uncles, Aunts, or their DescendantsWho Does Get Your Property WITHOUT a Will?If there are no children, parents, grandparents, brothers, sisters, aunts, uncles, and no descendants of any of such persons, the estate goes to the State to be used to aid certain students who are residents of North Carolina and enrolled in public institutions of higher education in North Carolina.How Do You Own Your Property??It Does Make A Difference! Ownership Rights: Can you sell it?Can you “will” it?Can you give it away?How much will be in your estate at your death?Types of OwnershipSole OwnershipSimplest form of ownershipOne person has all of the present and future power to use, control, sell or otherwise dispose of the propertyUsually all is in your Federal EstateTypes of OwnershipConsecutive OwnershipLife EstateLife tenantRemaindermenUsually all in is your Federal EstateTypes of OwnershipConsecutive OwnershipLife EstateLife tenantHas right to posses & use the property (collect income) for life At death of life tenant, property passes to the remaindermanNone of “life tenancy” in the Federal Estate of the life
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