Estate Planning Seminar - JD Supra...Estate Planning Seminar. 0 DAVID ENNIS, ESQ. ENNIS LAW FIRM,...
Transcript of Estate Planning Seminar - JD Supra...Estate Planning Seminar. 0 DAVID ENNIS, ESQ. ENNIS LAW FIRM,...
DAVID ENNIS, ESQ.E N N I S L A W F I R M , P . C .
8 1 1 4 M A R K E T S T R E E T , S U I T E 3 0 0W I L M I N G T O N , N C 2 8 4 1 1
9 1 0 - 6 8 1 - 0 7 1 1
W W W . E N N I S L A W F I R M . C O M
Estate Planning Seminar
0
DA
VID
EN
NIS
, ES
Q.
EN
NIS
LAW
FIR
M, P
.C.
8114 MA
RK
ET
ST
RE
ET
, SU
ITE
300
WILM
ING
TO
N, N
C 28411
910-681-0711
WW
W. E
NN
ISLA
WF
IRM
. CO
M
Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=ed517eb3-a3f5-4953-aba1-fbec3b624d02
What is your estate?
REALPROPERTY
PERSONALBELONGINGS
MONEY
Ohat los 4O
UT
?Stat??
OR
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Who needs estate planning?
• Simple estates need planning• There is no magic dollar
figure
NOT JUSTFOR THE
WEALTHY
• Preserve assets if you die or become incapacitated
• Care for loved ones
CONTROLPROPERTY
• Makes your wishes clear• Avoids family disputes
MINIMIZEDISPUTES
0ho Uzzio T
OO
T
NO
T JU
ST
• Sim
ple estates need planning
FO
R T
HE
• There is no m
agic dollar
figureW
EA
LTH
Y
IR
• Preserve assets if you die or
CO
NT
RO
Lbecom
e incapacitated
PR
OP
ER
TY
• Care for loved ones
ra
MIN
IMIZ
E• M
akes your wishes clear
• Avoids fam
ily disputesD
ISP
UT
ES
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Planning for incapacity
UNEXPECTED
• Can strike at anytime• Failing to plan means court will appoint a guardian
BURDEN
• Lack of planning increases burden on the guardian
LOSS OFCONTROL
• Your guardian’s decisions might not be what you want.
WIA
UU
1,U9 for M
rapant4
• Can strike at anytim
e
• Failing to plan m
eans court will appoint a guardian
• Lack of planning increases burden on the guardian
BU
RD
EN
• Your guardian's decisions m
ight not be what you
Loss OF
want.
CO
NT
RO
LJ
F:C3
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Planning for incapacity- Healthcare Directives
LIVING WILL
Puts your instructions
in writing
HEALTHCAREPOA
Allows you to designate an
agent to act on your behalf
DO NOTRESUSCITATE
(DNR)
Directs that resuscitation
measures will be withheld or withdrawn
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rapan,tt-
Do N
OT
H E
ALT
H C
AR
ER
ES
US
CIT
AT
EP
OA
(DN
R)
Allow
s you toD
irects thatP
uts your
resuscitationdesignate an
instructionsm
easures will be
agent to act onw
ithheld orin w
ritingyour behalf
withdraw
na
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Planning for incapacity- Property Management
JOINT OWNERSHIP
Gives other person equal access and exposes property
to liability
DURABLE POA
Allows you to designate an
agent to act on your behalf
LIVING TRUST
Permits successor trustee to take
over management of trust property
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rapan,tt- wropfrt4
au'RO
TM
fut
k
JOIN
T O
WN
ER
SH
IPD
UR
AB
LE P
OA
LIVIN
G T
RU
ST
Gives other person
Allow
s you toP
ermits successor
equal access anddesignate an
trustee to take
exposes propertyagent to act on
over managem
ent
to liabilityyour behalf
of trust property
L
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What happens if you die without an estate plan?
INTESTACY
• Probate courts;• Property with be distributed according to NC law;• May not be what you wanted.
BENEFICIARYDESIGNATIONS
• Retirement plans (IRAs, etc.)• Life insurance
0
hit bappuiO if paa dfr w
itbrnt ?? tat ? $an?
• Probate courts;
• Property w
ith be distributed according to NC
law;
• May not be w
hat you wanted.
• Retirem
ent plans (IRA
s, etc.)
• Life insurance
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What happens if you die without an estate plan?
You
Child1/4
Child1/4
Spouse 1/2
Typical distribution pattern splits property between surviving spouse and children
YOUR actual wishes are irrelevant
0
hit bappno if paa dfr witbrt ?? tat ? $an?
Typical distribution
You
pattern splits property
between surviving
spouse and children
Spouse 1/2
YO
UR
actual wishes are
irrelevantC
hild1/4
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Last Will & Testament: The Basic Estate Plan
Directs how your assets are to be distributed
Signed and witnessed
Names executor
Nut U
I'U &
ITO
tamfuto fhT
loir tobtf WIR
U
Directs how
your assets
are to be distributed
Signed and w
itnessed
Nam
es executor
F:C3
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Last Will & Testament: The Basic Estate Plan
Not flexible
Subject to probate
Requires accounting to court
Executor is personally responsible to pay debts and distribute property
Property/accounts are frozen in some cases
Nut U
I'U &
ITO
tamfuto IhT
10ir totatf WIR
U
Not flexible
Subject to probate
Requires accounting to court
Executor is personally
responsible to pay debts and
distribute property
Property/accounts are
frozen in some cases
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How do I avoid probate?
Own property jointly with survivorship rights
Beneficiary designations (insurance, IRAs, etc.)
Utilize a revocable trust
Make lifetime gifts
Ow
n property jointly with
survivorship rights
Beneficiary designations
(insurance, IRA
s, etc.)
Utilize a revocable trust
Make lifetim
e gifts
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The Revocable Living Trust
Versatile
Protects against incapacity, avoids probate, minimizes taxes
Provides safeguards for minors, elderly parents, and other beneficiaries
Control over property
IhTT
arOcIbIT
Versatile
Protects against
incapacity, avoids
probate, minim
izes taxes
Provides safeguards for
minors, elderly parents, and
other beneficiaries
Control over property
F:IE3
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What is a Revocable Living Trust?
BENEFICIARIES
Protection Right to receive property
TRUSTEE
Has legal power to act Manages trust property
GRANTOR
Trust agreement Trust property
0
frorabif
GR
AN
TO
R
Trust agreem
entT
rust property
TR
US
TE
E
Has legal pow
er to actM
anages trust property
BE
NE
FIC
IAR
IES
Protection
Right to receive property
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Lifetime Gifting
Allows you to minimize transfer taxes by taking advantage of the $12,000 annual gift tax exclusion ($24,000.00 for you and your spouse combined) and other tax deductions
Removes future appreciation of property from your taxable estate
CAUTION: NO “STEP-UP” IN BASIS
W1,f?t1M
T 01ftiU
0
Allow
s you to minim
ize
transfer taxes by taking
advantage of the $12,000
annual gift tax exclusion
($24,000.00 for you and
your spouse combined)
and other tax deductions
Rem
oves future
appreciation of property
from your taxable estate
CA
UT
ION
: NO
"ST
EP
-UP
"
IN B
AS
IS
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Tax considerations-Cost Basis
$20,000.00 (original basis)
$180,000.00 (current value)____________________________$160,000.00 (appreciation)
If you gift DURING your lifetime, the recipient is obligated to pay capital gains tax on the full appreciated value. ($160,000.00)
fix rouolifratlouo-toot
$20,000.00 (original basis)
$180,000.00 (current value)
$160,000.00 (appreciation)
If you gift DU
RIN
G your lifetim
e, the
recipient is obligated to pay capital
gains tax on the full appreciated
value. ($160,000.00)
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Tax considerations-Step-up in Basis
$20,000.00 (original basis)
$180,000.00 (current value)____________________________$160,000.00 (appreciation)
If you gift through a will or trust, the recipient is ONLY obligated to pay capital gains tax on any appreciated value that occurs AFTER your death. (theoretically $0.00 )
fix rouolifratlouo-tTF
a0rup M,
$20,000.00 (original basis)
$180,000.00 (current value)
$160,000.00 (appreciation)
If you gift through a will or trust, the
recipient is ON
LY obligated to pay
capital gains tax on any appreciated
value that occurs AF
TE
R your death.
(theoretically $0.00 )
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Tax considerations-Exemptions
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Gift tax exemption
Estate tax exemptionGSTT Exemption
In
4,000,000
3500,000
3,000,000
2,500,000G
ift tax exemption
2,000,000E
state tax1,500,000
exemption
1,000,000G
ST
T E
xemption
500,000
0
ooh o ol o oq Noti
0
F:C3
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Conclusion
Have you implemented a plan for incapacity?
Have you taken the proper steps to control your property after you pass on?
Does your current plan accurate reflect your wishes?
tourluol'ou
Have you im
plemented a
plan for incapacity?
Have you taken the proper
steps to control your
property after you pass on?
Does your current plan
accurate reflect your
wishes?
F:C3
Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=ed517eb3-a3f5-4953-aba1-fbec3b624d02
DAVID ENNIS, ESQ.E N N I S L A W F I R M , P . C .
8 1 1 4 M A R K E T S T R E E T , S U I T E 3 0 0W I L M I N G T O N , N C 2 8 4 1 1
9 1 0 - 6 8 1 - 0 7 1 1
W W W . E N N I S L A W F I R M . C O M
Estate Planning Seminar
0
DA
VID
EN
NIS
, ES
Q.
EN
NIS
LAW
FIR
M, P
.C.
8114 MA
RK
ET
ST
RE
ET
, SU
ITE
300
WILM
ING
TO
N, N
C 28411
910-681-0711
WW
W. E
NN
ISLA
WF
IRM
. CO
M
Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=ed517eb3-a3f5-4953-aba1-fbec3b624d02