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(210) 651-3851www.voellerlaw.com

Estate Planning for Control Freaks

Presented by: Jim Voeller

The Voeller Law Firm

19311 FM 2252

(210) 651-3851

www.voellerlaw.com

1. Goals of Estate Planning(What You Are Trying to Accomplish)

2. Method of Estate Planning(Tools Used to Achieve the Goals)

3. Fiduciary Selection(Making Sure Your Plan is Successful)

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KEY CONCEPTS

Incapacity

Guardianship

Probate

Estate/Gift Taxes

INCAPACITY

Unable to provide food, clothing, or shelter for yourself

Unable to care for your own physical needs

Unable to manage your own financial affairs

GUARDIANSHIP

Required if you become incapacitated but haven’t given anyone else legal authority to handle affairs on your behalf…or authority was insufficient

You become a ward of the state. Court appoints a guardian for you

No automatic guardian powers

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GUARDIANSHIP

Apply to court and Qualify

Post a bond and renew it each year

Provide the court a list of all assets and a budget for what you want to spend

Get prior authorization for expenditures

Provide detailed accounting for all expenditures to the court each year

GUARDIANSHIP

Time consuming

Expensive

Loss of all privacy

Occurs at an already stressful time

Guardianship happens to people who don’t plan

Don’t Rely on a Power of Attorney

PROBATE

The court involved process of transferring legal title to assets held in your name when you pass away

A lawsuit you pay for in order to protect the interests of disgruntled heirs and creditors

Court appoints an executor (usually nominated in your will)

A will does not get you out of probate – a will is your ticket to probate

Takes anywhere from a few months to a couple of years

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PROBATE

Downsides:

Delay

Cost

Loss of Privacy

Creating a forum for disgruntles heirs

Completely avoidable through intentional planning

TAXES

Estate Tax:

$11.4 million individual exemption in 2019. Sunsets in 2026.

40% tax on value of estate over exemption

Gift Taxes

$15,000 exemption per donee in 2019

Excess gift uses up estate tax exemption

1. Goals of Estate Planning(What You Are Trying to Accomplish)

2. Method of Estate Planning(Tools Used to Achieve the Goals)

3. Fiduciary Selection(Making Sure Your Plan is Successful)

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GOALS

1. Control your property while you are alive

2. Have a backup plan in the event of incapacity

3. Leave a protected legacy

4. Reduce taxes and expenses (e.g. legal fees, court costs, etc.)

1. Goals of Estate Planning(What You Are Trying to Accomplish)

2. Method of Estate Planning(Tools Used to Achieve the Goals)

3. Fiduciary Selection(Making Sure Your Plan is Successful)

METHODS

Four Methods:

1. Do Nothing

2. POD/JT-WROS/Beneficiary Designations

3. Use a Will

4. Use a Revocable Living Trust

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METHODS

1. Do Nothing

Incapacity = Guardianship

Dying “Intestate” = Heirship & Administration

Texas writes a will for you – rarely the one you want

METHODS

2. POD/JT-WROS/Beneficiary Designations

Nice idea – often doesn’t work

Harder to implements and update

Unintended consequences

Bypasses Will

METHODS2. POD/JT-WROS/Beneficiary Designations

Breaks the commandments:

Loss of Control during life

No plan for incapacity

No protection for legacy

High potential risk of added taxes and legal expenses

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METHODS3. Use a Will

Will is not effective until you die AND goes to probate

Relies on power-of-attorney in the event of incapacity

Higher costs

Delay

Open to contest

Breaks several commandments

METHODS

4. Use a Revocable Living Trust

WHAT IS A TRUST?

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METHODS

4. Use a Revocable Living Trust

Control property while you are alive

Backup plan in the event of incapacity

You get to choose who will manage your assets –not some judge you don’t know

METHODS

4. Use a Revocable Living Trust

Leave a protected legacy

Minor/Special Needs Beneficiaries

Second Spouse Protection

Reduce taxes and expenses

METHODS

Judy and Frank - 2016

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METHODS

Frank and Sugar - 2019

METHODS

Judy and Pierre c. 2026

METHODS4. Use a Revocable Living Trust

Leave a protected legacy

Minor/Special Needs Beneficiaries

Second Spouse Protection

Asset Protection for Heirs

Keep assets in the family

Reduce taxes and expenses

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METHODSMeet “Wrench”:

Enjoys “music”

Traditional job doesn’t really fit his “ideal life plan”

Sells t-shirts for a band called “Phish”

You suspect he’s fond of chemical substances

He thinks it’s great he has rich in-laws

Is he going to get half of what you leave your daughter?

METHODS4. Use a Revocable Living Trust

Leave a protected legacy

Minor/Special Needs Beneficiaries

Second Spouse Protection

Asset Protection for Heirs

Keep assets in the family

Spendthrift Protection

Difficult to challenge

Reduce taxes and expenses

COMPARISON

GOALS

Intestate POD Will Trust

Control your property while you are alive ? ? X

Have a backup plan in the event of incapacity ? ? X

Leave a protected legacyX

Reduce taxes and expensesX

METHODS

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1. Goals of Estate Planning(What You Are Trying to Accomplish)

2. Method of Estate Planning(Tools Used to Achieve the Goals)

3. Fiduciary Selection(Making Sure Your Plan is Successful)

Who’sYourBaby-sitter?

TRUSTEE DUTIESDuty to administer

Duty of loyalty

Duty not to delegate

Duty to keep and render accounts

Duty to furnish information

Duty to exercise reasonable care and skill

Duty to take and keep control

Duty to preserve trust property

Duty to enforce claims

Duty to defend actions

Duty to keep trust property separate

Duty to make trust property productive

Duty to pay income to beneficiaries

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Expert handling – avoid mismanagement

Avoid setting up your kids for conflict – power play

Grief and money don’t mix

Reduce strain in blended families

You now have the option!

Reasons to Name a Professional Trustee:

1. Goals of Estate Planning(What You Are Trying to Accomplish)

2. Method of Estate Planning(Tools Used to Achieve the Goals)

3. Fiduciary Selection(Making Sure Your Plan is Successful)

(210) 651-3851www.voellerlaw.com

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