COA 4131 1st Edition Lecture 32 Outline of Last Lecture I. Guest Speaker Outline of Current Lecture I. Importance of Estate PlanningII. Process of Estate PlanningIII. Wills IV. Probate V. Tax Advisors VI. Advise for Beginners Current LectureA. Importance of Estate Planning a. Estate definedi. Estate1. What you ownii. Probate1. Court process that decides if the will is valid or invalid iii. Estate taxes 1. Tax on your right to transfer property at your death2. Consists of accounting of everything you own B. Process of Estate Planninga. 3 stepsi. Setting goals and objectivesii. Making a williii. Establishing of a trust 1. Marital trusta. A-trustb. Provide for spouse and kids with an inheritance b. Goals and objectivesi. What will it include?c. Assessment of current situationi. 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 childreni. Unlimited marital deduction1. The amount allowed by the federal estate-tax for all assets given to the still living spouse ii. Three types of marital trusts1. General power-of-appointment gives benefits to spouse for their entire life a. Most liberalb. Least restrictive 2. DTIP gives money for entire life but have a qualifying income interest for life only3. 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 childreni. Non-marital trust 1. Lifetime gifts2. Charitable gift3. Domestic partnershipa. Revocable trust f. Records and estate plans i. Organize and keep in safe placeii. Will need to have personal info, like residence, stocks, bonds, mutual funds, IRAs, trusts, ectiii. Assets and liabilities C. Wills a. Willsb. Types of willsi. Simple Will1. Used for small estates 2. Avoid complications with trusts and large estates 3. Minimizes taxes might applyii. Joint Will1. One document by two parties2. Make will together and leave belongings to each other iii. Mutual Will1. Single or multiple docs by multiple parties for properties by all people2. Leave assets to each other iv. Reciprocal Will1. Mutual will that gives the spouse the other’s property2. Becomes the beneficiary 3. Not great for those with large estates4. Tax increase c. Legal terms d. Executor i. Married couples with same executor and willii. Executor duties e. Visiting an attorney to make a willf. Elements of a willg. Witnessesh. Storage of wills D. Probatea. Asset distribution outside of probateb. Trusts c. Reducing estate and gift taxes E. Tax Advisorsa. Trust departments in banks F. Advice for Beginnersa. Overall estimate of net worthb. Make a will c. Living willd. Power of
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