ESTATE PLANNING SEMINAR

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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

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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.

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Four Ws

• W
• W
• W
• W

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Four Ws

• Who- Who receives the benefits?
• W
• W
• W

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WHO ?

Attorneys
Funeral/Burial/Cremation
IRS
Creditors
Family
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WHO ?
Family
½ Spouse
½ Children
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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.

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WHO?
No Spouse or Children
Parents
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WHO?
No Parents
Siblings
Nieces Nephews
Laughing Heirs
Children
Parents
State
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CHOICE

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

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CHOICE

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

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Four Ws

• Who
• What
• W
• W

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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?

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Four Ws

• Who
• What
• When
• W

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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?

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CHOICE

• TRUST PROTECTION
• Protection from
• The courts
  
• Themselves

TRUST
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CHOICE

• You get to pick
• whom you trust TRUSTEE

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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.
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Four Ws

• Who
• What
• When
• Way

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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 doesnt know the other three Ws until
  the planner meets with the client.

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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
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What is Probate

• Probate is to prove the validity of the Will,
  whether its yours or the states.
• Colorado has the Uniform Probate Code II
• Simplified process

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

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

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PROBLEM
500,000 estate
New Husband/ New Wife
Step Children

Creditors
Courts
Attorneys
Third Parties
IRS
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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

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SOLUTION
ESTATE PLANNING TABLE
Financial Planning
Legal Planning
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
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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.

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Trust Protection
It usually passes from husband to the wife. NO
TAX
Shelter 250,000
Dont leave assets to each other, leave assets
for each other.
Shelter 250,000
Then to the children. Potential TAX
TRUST
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PROBLEM
500,000 estate
New Husband/ New Wife
Step Children

Creditors
Courts
Attorneys
Third Parties
IRS
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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

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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
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Four Elements of a Trust

1. Owner
2. Trustee
3. Beneficiaries
4. Assets

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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!
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FUNDING

• Put Assets in the Trust
• Retirement
• Insurance
• Investments
• Deeds

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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

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SUMMARY

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

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THANK YOU

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