Take Charge and

Reach Your Goals

Estate Planning

What is an Estate Plan?• A good estate plan: more than just a will– Coordinates how investments and insurance will

be handled– Manages emergency, retirement, and other

assets– Brings peace of mind to your loved ones– Keeps you on track to meet financial goals

Estate Planning

Your Estate Planning Team• Seek help from the following professionals to create

a proper estate plan:– An attorney– A CPA– An insurance consultant– An investment advisor– A financial planner

Estate Planning

Your Estate Planning Team• When looking for professionals, consider

soliciting recommendations from other professionals in a similar field. – Example: ask your banker if he or she knows a

good CPA who specializes in estate planning.

Estate Planning

Maintaining Your Estate Plan• Meet with your team annually, if possible– Review your documents – Ensure everything is up-to-date with recent

changes in your life – Check to see if new laws effect your plan– Revise, if necessary, to stay on track with goals

Estate Planning

A 12-Step Process• There are 12 steps to creating and maintaining a

comprehensive estate plan • Remember, it’s an ongoing process – A proper estate plan will be changed and

updated throughout your lifetime

Estate Planning

A 12-Step Process1. Organize all your important information2. Create a power of attorney3. Create a health-care proxy4. Create a living will5. Create a will to name executors6. Protect your children financially

Estate Planning

A 12-Step Process7. Create a revocable living trust8. Ensure your insurance is in order9. File beneficiary designations, and confirm the title to

your financial accounts and estate10.Give something back—consider charitable donations11.Communicate your plans12.Review your estate plan

Estate Planning

Your Estate and Taxes• In most cases, after you pass on taxes must be

filed for your estate. • Federal tax: Federal Estate Tax• State tax – Depends on where you live – Pennsylvania Inheritance Tax in PA

Estate Planning

The Pa. Inheritance Tax• Can differ majorly from Federal Estate Tax• The following are just a few examples

Estate Planning

Is Property Included in the Estate?• Federal Estate Tax: Based on the total assets of a

U.S. citizen or resident, regardless of the location of the assets.

• Pennsylvania Inheritance Tax: No Pennsylvania Inheritance Tax on real estate or tangible personal property located outside the state.

Estate Planning

Retirement Benefits• Federal Estate Tax: For estates of those who died

after Dec. 31, 1984, all retirement benefits are includable in the estate.

• Pennsylvania Inheritance Tax: Proceeds from qualified employee benefit plans (if any) that are exempt for Federal Estate Tax purposes are exempt from the Pennsylvania Inheritance Tax.

Estate Planning

Filing and Paying the Tax• Federal Estate Tax: The due date for filing the

return and paying is nine months after the date of death.

• Pennsylvania Inheritance Tax: The due date for filing the return and paying is nine months after the date of death.

Estate Planning

Talking about Estate Plans• Start the discussion:– It may be awkward, but if other members of

your family—like your parents–don’t have estate plans, start the discussion

– Find a way to broach the subject so it doesn’t sound like you no longer trust your parents’ judgment to make decisions

Estate Planning

Talking about Estate Plans• Timing is everything– Start this dialogue sooner rather than later.– Don’t wait for a crisis when you might not have

time to do the background work before making a crucial decision.

Estate Planning

Talking about Estate Plans• Know what they want – Ask your parents about how they want things to

be handled in case they are incapacitated. – Once you have a grasp of their requests, your

role is to help safeguard their assets and make sure their wishes are carried out.

Estate Planning

Talking about Estate Plans• Be inclusive – Family finances can be one of the biggest

sources of family strife. – If you have siblings, include them from the

outset. – Having support and making mutual decisions

regarding your parents can help in times of crisis.

Estate Planning

Resources• The PICPA– www.picpa.org/estateplanning

• Kiplinger’s Estate Planning webpage– www.kiplinger.com/reports/basics-estate-planning/

• AARP’s Estate Planning webpage– www.aarp.com/estateplanning

• The Pennsylvania Department on Aging– www.aging.state.pa.us/