Estate and Financial Planning for Retirement

1
Estate and Financial Planning for Retirement
Thank You for Coming!
2
Estate and Financial Planning for Retirement

• You should have a seminar packet
• Raise your hand if you need one
• Pull out the Agenda page pen
• Close your packet for now
• Please turn off your cell phone

3
Seminar Agenda

• 2 types of planning
• Estate Planning
• How to manage estate if you cant
• How to transfer assets upon death
• Financial Planning
• Income tax reduction planning
• Investment cash flow planning

4
Seminar Agenda

• Selecting the right financial team to help plan
  manage your affairs
• Fees for planning
• Next step toward improving your plan
• Questions answers

5
Questions?

• Please write down your questions for the
  Question Answer period
• Thank you!

6
Credentials

• Years in practice
• Location
• Experience
• Education
• Affiliations

7
Estate Planning
8
What is an Estate?

• All of your assets
• Personal items
• Real estate
• Cash
• Stocks/bonds
• Insurance policies

9
What is Estate Planning?

• A plan for how to hold, preserve distribute
  assets upon your death, so
• Assets will pass to heirs, without probate
• Youll avoid, or minimize, estate taxes
• If incapacity, your estate will be managed as you
  desire -- by a person you choose, not a
  court-appointed guardian

10
Common Estate Plans

• No plan
• Will
• Joint ownership
• Beneficiary designation
• Gifting
• Living trust

11
No Estate Plan

• I Love You plan
• No written planits simply your intention that
  your estate will transfer to your loved ones
• Result is probate

12
Will

• A legal, written document
• Names beneficiaries who gets what
• Names executor
• Drawbacks
• Guarantees estate will go through probate
• Doesnt control jointly held assets or
  beneficiary designations

13
Joint Ownership

• Joint Tenancy with right of survivorship
• Automatically passes to survivor
• Avoids initial probate
• Potential income tax problems
• Tenancy in Common
• No right of survivorship passes according to
  will or court
• Subject to probate

14
Potential ProblemWith Joint Ownership
BobSue Kids
BobKids
BobSylvia
Sylvia
Kids Move Bob Remarries
Sue Passes
Bob Passes
15
Beneficiary Designation

• Beneficiaries are named on financial accounts
• Some types of bank accounts
• Retirement accounts
• Insurance policies
• Beneficiaries take possession upon death,
  avoiding probate
• Keep beneficiaries current

16
Gifting

• Giving assets away while youre living is the
  easiest way to transfer assets
• You can give up to 13,000 per year to as many
  people you want tax-free
• Complications
• Gifts more than 13,000 are taxable
• Gives control of assets to others

17
Living Trust

• Created while youre living
• Legal entity that operates indefinitely
• Titles to assets are transferred to the name of
  the trust, Smith Living Trust
• Assets will avoid probate
• Upon death or incapacity, the trust goes on
  operating based on directions

18
What is Probate?

• Legal process
• Identifies appraises assets
• Orders payment of debts taxes
• Validates will settles disputes
• Identifies beneficiaries
• Transfers assets to heirs
• Only way to transfer title upon death

19
3 Reasons to Avoid Probate

• 1. Fees
• 2. Delay
• 3. Publicity

20
3 Reasons to Avoid Probate

• 1. Fees
• Probate costs attorney fees
• Estate value 500,000
• Probate fees 3 - 8 (15,000 -40,000)
• Attorney Fees
• Reduces amount heirs will receive assets may
  have to be sold to pay debts

21
3 Reasons to Avoid Probate

• 2. Delay
• Probate can take months or years
• National average 18 months
• In the meantime, heirs have no control over
  assets
• Assets may not be able to be sold and expenses
  may accumulate

22
3 Reasons to Avoid Probate

• 3. Publicity
• Public notice of probate
• File is available to general public
• Invites creditors heirs to stake their claims

23
A Living Trust Will Avoid Probate

• A separate legal entity
• When you fund the trust, it owns the assets not
  you
• The trust has to be funded to avoid probate

24
Funding is Crucial

• A trust will be ineffective unless its funded
• Funding is retitling your assets to the name of
  the trust
• If assets arent retitled, theyll go through
  probate

25
The Mechanics of a Living Trust

• Trustor Creates directs trust
• Trustee Manages the trust
• Successor Trustee Takes over management upon
  incapacity or death
• Beneficiaries Receive benefits
• A revocable living trust can be changed at
  anytime while youre living and competent.

26
Estate (Death) Taxes

• Proper planning can protect your assets from
  estate taxes
• Estate Taxes
• Federal Estate Tax Max. is 40 on assets
  exceeding 5,250,000
• Tax on 6 million estate 300k
• State Estate Tax

27
An A-B Trust for Married Couples

• If married, a couple has a single estate tax
  exemption
• An A-B Trust can double the exemption amount
• Create 2 separate trusts (A B) one for each
  spouse
• Each trust is entitled to an exemption

28
Living Trustsfor Singles

• Single individuals have special estate planning
  needs
• Have no legal partner who will be recognized upon
  incapacity or death
• If high net worth, no marital exemption for
  estate taxes
• Need a legal document to designate a manager or
  beneficiary

29
Consider an Estate Plan if You

• Own a home or property
• Want to your estate to avoid probate
• Want to eliminate/minimize estate taxes
• Want your affairs to remain private
• Want your estate to be managed as you direct, if
  incapacitated

30
True Story
31
Financial Planning
Part of a sound estate plan is a sound
financial plan
32
2 Important Steps to a Comfortable Retirement

• Financial Plan
• How to build preserve your assets, so youll
  have the income youll need during retirement
• Long-Term Care Plan
• How to protect your assets and get the care your
  want, if long-term care is needed

33
True Story
34
Consider an Estate Financial Plan if You

• Have assets of 2 million
• Want your affairs managed as you direct, if
  incapacitated
• Want to pass your estate to your heirs, with
  little delay or expense
• Want to reduce income taxes
• Want to manage your money for a comfortable
  retirement

35
Benefits of Additional Planning

• Minimize estate and capital gains taxes
• Provide discretionary distributions to children
  (for education, etc.)
• Accomplish other benefits unique to your
  situation (business concerns, special needs, etc.)

36
Factors in Selecting the Best Financial Team

• Planning is complex, so use experienced
  credentialed professionals
• Estate Planning Attorney
• Certified Public Accountant (CPA)
• Certified Financial Planner (CFP)

37
CFP Certification Requirements

• Must have 5 years experience and master 100
  topics, including
• General financial planning
• Insurance planning
• Employee benefits planning
• Investment planning
• Income tax planning
• Retirement planning
• Estate planning
• A minority of planners are CFPs

38
Credentials Reviewed

• Years in practice
• Location
• Experience
• Education
• Affiliations

39
Fees for a Living Trust

• Standard fees
• What fees include
• Credit cards are accepted

40
Fees for Financial Planning

• Financial Plan Analysis 1,000
• Analysis of financial situation goals
• Financial plan recommended
• Single Transaction 0
• 50 of fee is due at start of work.Credit
  cards are accepted.

41
Some FREE Advice

• Avoid bargains when purchasing
• Parachutes
• Scuba gear
• Estate financial planning

42
So Far Weve Learned...

• 2 types of planning
• Estate planning
• Financial planning
• Selecting the right financial team
• Fees for planning
• Next step toward planning

43
A Free Consultation

• Find out how an Estate Financial Plan would
  work for you
• Do you have an important issueto discuss?
• Theres no obligation

44
Seminar DiscountCertificate

• Make your appointment within 2 weeks, and receive
  a discount certificate
• You can make your appointment at the seminar

45
Seminar Evaluation Form

• Say Yes to a consultation
• A team member will pick them up

46
Schedule Your Appointment
47
Any Questions?
48
Thank You for Coming!

• We look forward to seeing you soon
• Remember to schedule your appointment at the
  registration table