COA 4131 1st Edition Lecture 32 Outline of Last Lecture I Guest Speaker Outline of Current Lecture I Importance of Estate Planning II Process of Estate Planning III Wills IV Probate V Tax Advisors VI Advise for Beginners Current Lecture A Importance of Estate Planning a Estate defined i Estate 1 What you own ii Probate 1 Court process that decides if the will is valid or invalid iii Estate taxes 1 Tax on your right to transfer property at your death 2 Consists of accounting of everything you own B Process of Estate Planning a 3 steps i Setting goals and objectives ii Making a will iii Establishing of a trust 1 Marital trust a A trust b Provide for spouse and kids with an inheritance b Goals and objectives i What will it include c Assessment of current situation i Taking stock ii May consist of cash and securities real estate insurance trusts annuities business interests and other assets d Providing for a spouse and children i Unlimited marital deduction 1 The amount allowed by the federal estate tax for all assets given to the still living spouse ii Three types of marital trusts 1 General power of appointment gives benefits to spouse for their entire life a Most liberal b Least restrictive 2 DTIP gives money for entire life but have a qualifying income interest for life only 3 Estate trust used to provide discretionary distributions for entire life but the remainder of the trust pass to he surviving spouse s estate at death e Never married no children i Non marital trust 1 Lifetime gifts 2 Charitable gift 3 Domestic partnership a Revocable trust f Records and estate plans i Organize and keep in safe place ii Will need to have personal info like residence stocks bonds mutual funds IRAs trusts ect iii Assets and liabilities C Wills a Wills b Types of wills i Simple Will 1 Used for small estates 2 Avoid complications with trusts and large estates 3 Minimizes taxes might apply ii Joint Will 1 One document by two parties 2 Make will together and leave belongings to each other iii Mutual Will 1 Single or multiple docs by multiple parties for properties by all people 2 Leave assets to each other iv Reciprocal Will 1 Mutual will that gives the spouse the other s property 2 Becomes the beneficiary 3 Not great for those with large estates 4 Tax increase c Legal terms d Executor i Married couples with same executor and will ii Executor duties e Visiting an attorney to make a will f Elements of a will g Witnesses h Storage of wills D Probate a Asset distribution outside of probate b Trusts c Reducing estate and gift taxes E Tax Advisors a Trust departments in banks F Advice for Beginners a Overall estimate of net worth b Make a will c Living will d Power of attorney
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