Passing Your Wealth On - Module 10 of Family Financial Freedom

Workshop
Module Ten:
Passing on
Saunders Learning Group, Newton, KS
Your
Wealth
LLC

Saunders
Learning
Group
provides
a
variety
of
training
programs,
workshops
and
seminars
targeted
to
the
financial
services
industry.
Programs
are
available
in
a
wide
range
of
topics,
and
we
are
specialists
in
developing
custom
programs
that
are
targeted
to
your
needs.
Contact
the
founder,
Floyd
Saunders
at
316-‐680-‐6482
or
at
floyd@floydsaunders.com
for
more
informaKon.
Saunders Learning Group, Newton, KS Passing on Wealth
2
Training from Saunders Learning Group

Agenda
Why You Need Estate Planning
Estate Distribution
Why You Must Have a Will
How Your Estate May Be Taxed
Advanced Estate Planning

“In this world nothing can be said
to be certain, except death and
taxes.”
Benjamin Franklin
4

Why You Need Estate Planning
! Estate planning is a definite plan for the
administration and disposition of
property during both your lifetime and
at death
! Estate planning is an essential part of
retirement planning and has two
components
— Build your estate through savings,
investments, & insurance
— Transfer your estate as you wish at
death

Why Estate Planning?
(continued)
! Many people give little or no thought to
putting their personal and financial
affairs in order for their families that
survive them
! Demands of daily living can keep people
from thinking about death
! Plan while you are in good health
! Estate planning is especially important
for nontraditional households

ESTATE PLANNING?
Single Married, Blended Families
" If you are single, designate a beneficiary
and provide them with information about
your estate.
" If married, include spouse and children in
estate planning process.
" Step-families and blended families
requires more effort and communication
to insure everyone knows how your plan
to provide for members of the family.
" Newer lifestyles means different
challenges, which means plan early and
get expert help.

Legal Aspects of Estate Planning
Gather Necessary Documents
! Birth and marriage certificates
! Legal name changes
! Social Security documents
! Veteran documents
! Insurance policies
! Transfer records of joint bank
accounts
! Safe-deposit box records
! Registration of automobiles
! Title to stock and bond certificates

Wills – Do You Need One?
! A will is the legal declaration of a person’s
mind as to the disposition of his or her
property after death
! Transfers property according to your
wishes at death
! State law determines distribution of assets
if you die intestate (without a will)
! Marriage and divorce affect your will
— Review your will with an attorney
— Marriage may revoke your will
! Legal costs of a will vary. A standard will costs
between $300-$400
! An Online service can provide a basic will, if your
life is more complex, see a lawyer.

Types and Formats of Wills
1. A
simple
will
(or
“I
love
you”)
leaves
everything
to
your
spouse
2. A
tradiKonal
marital
share
will
leaves
half
to
spouse,
half
to
children
or
heirs.
Avoid
probate
3. An
exempKon
trust
will
passes
to
your
spouse
except
for
an
amount
equal
to
the
exempKon,
which
passes
into
a
trust.
The
trust
can
provide
a
lifelong
income
4. A
stated
dollar
amount
will
a) Should
use
percentages,
not
actual
dollar
amounts.

Formats of Wills
! Holographic will
— A will that you write, date and sign, entirely
in your handwriting
— May not be recognized in some states
! Formal will
— Usually prepared with attorney’s assistance.
— You must sign & have two witnesses, neither
of whom can be beneficiaries (people named
to receive property).
! Statutory will
— Type of formal will on a pre-printed form.
Has rigid provisions, may be not meet current
laws, and may be invalid if you change
provisions

Selecting an Executor
! This person follows your instructions
! Find out if the person is willing to accept this
major responsibility
! Find out if he or she is capable of the
complicated tasks involved
! Person could be a family member, friend,
attorney, accountant, or a bank representative
! If you don’t name one, the court will
! Executor’s fees are set by state law

Responsibilities of an Executor
! Take control of assets of the estate
! File an inventory of assets and liabilities
with the court
! Liquidate assets if necessary to pay
claims
! Distribute assets, based on the instructions in the will
! Make a final accounting to the court

Selecting a Guardian
! If you have children, you need a will to
name their guardian and/or trustee
! A guardian assumes the responsibility for
providing the children with personal care
and managing the estate for them
! Trustee will manage property for benefit
of children
! Be sure the person would be willing to
raise them and that their values match
yours

Revising Your Will
! Review your will if there are major changes
— If you have sold property mentioned in the will
— If the size and composition of your estate have changed
— If you have married, divorced or remarried
— If new potential heirs have died or been born
! Add a codicil
— A document that explains, adds or deletes provisions in your
existing will. Consider a new will if making major changes

Prenuptial Agreement
! Agreed upon prior to marriage
! Often waive a right to receive
property under the other’s will
of under state law
! You agree on a settlement if you
should divorce
! Consult an attorney

Living Will and Advance Directives
! Not a substitute for a traditional will
! Advance directives include the following:
— A living will
! Discuss your living will with those close
to you, and your family doctor
! Sign and date it before two witnesses
! Give copies to those close to you
— A health care proxy (durable power of
attorney)
— Letter of last instruction (after-death
wishes)

Ethical Will
! New type of will that is a
way to pass on emotional
and spiritual wealth to
your heirs
! It is not a legally binding
document
! A way to pass on your
values and beliefs
! Share lessons you’ve
learned in life
! Address any regrets
! Requires self-examination
! Writer and recipients say the results are an invaluable legacy

Durable Power of Attorney
" Legal document authorizing
someone to act on your behalf
— Can be limited or gives a great
deal of power
— If you are unable to make
decisions regarding your health
care this authorizes someone
to do it for you
— (also known as a health care
proxy)
! Letter of Last Instruction
(after death wishes)
— Not legally enforceable (in some states)
— Provides heirs with information

Types of Trusts and Estates
! A trust is a legal arrangement through which a trustee
holds your assets for your benefit or that of your
beneficiaries
— Takes care of or manages your property
— Distribute your assets to your heirs from
the trust according to your will
— All assets are taken out of your name
and put in the name of the trust

! Trusts are either revocable or irrevocable
— With a revocable trust you retain the right to end the trust or
change its terms during your lifetime
! May avoid the lengthy probate process
! Does not provide shelter from federal or state estate taxes
— You can not change the terms or end an irrevocable trusts
! For tax purposes the trust becomes a separate entity
! If a large estate, used to reduce estate taxes and avoids
probate

Benefits of trusts
! Reduce estate taxes
! avoid probate
! free you from managing assets
! provide income for a surviving spouse

! Living or Inter Vivos -establish while you are alive
Revocable
living
trusts
! To
help
avoid
probate,
a
poten2ally
expensive
and
lengthy
process.
A
revocable
living
trust
may
serve
as
a
subs2tute
for
a
will.
! To
designate
someone
to
manage
the
grantor's
assets
in
case
of
incapacity.
! Testamentary -established by your will
! Credit-‐shelter
-‐also
called
by-‐pass
trust
! Disclaimer
Trust
— Surviving
spouse
inherits
the
full
value
of
the
estate,
but
can
disclaim
some
porKon
which
is
transferred
to
a
credit-‐shelter
trust.
! Life Insurance Trust
— A trust where the assets are derived from value of life insurance.

Shelter or By Pass Trust
! Created
for
the
purpose
of
helping
to
protect
assets
from
circumstances
that
could
reduce
their
value
or
impact
ability
to
distribute
funds
— GiW
or
estate
taxes
-‐
current
law
allows
for
$5
million
to
be
exempt
from
taxes
—
Dueling
beneficiaries
-‐
an
irrevocable
trust
can
help
keep
each
party’s
interests
separate,
thereby
minimizing
discord.
(think
second
marriage
etc.)
— Unplanned
claimants
to
funds
-‐
An
irrevocable
trust
can
help
prevent
claims
to
money
in
your
estate,
because
the
trust
controls
distribu2on.
— Poor
or
inexperienced
decision-‐making
-‐
SeFng
up
a
trust
for
younger
children
could
help
protect
their
best
interests
if
the
grantor
dies
while
the
beneficiaries
are
s2ll
minors.
This
type
of
protec2on
also
could
apply
to
mee2ng
the
future
needs
of
beneficiaries
who
are
incapacitated.
GSTT: generation skipping transfer tax

Make an Inventory of Your Estate
! Bank accounts, CDs, money market funds
! Stocks, bonds and mutual funds
! Life insurance, employee benefits and annuities
! Your home, any other real estate
! Business interests, farm assets
! Money owed to you
! Interests and trusts
! Antiques, art, jewelry, collections, cars, and personal
effects

Community Property
! Community property states
— Community property is any
property that has been acquired
by either spouses during the
marriage, but not by gift, bequest
or inheritance

Joint Ownership
! How property might be held
— Spouses often own property as Joint Tenants With Right of
Survivorship (JT/WROS)
— The property will automatically pass to your spouse upon your death,
with no estate tax paid at the first death
— It is paid when surviving spouse dies

Life Insurance and
Employee Benefits
! Life Insurance and Employee Benefits
— Life insurance proceeds are free from probate and income tax
— Unless payable to the estate, death benefits from qualified
pension, profit sharing or Keogh plans are excluded from your
estate

How You Estate May Be Taxed
! Federal estate tax
! Estate & trust federal income tax returns
! State inheritance tax
! Gift taxes
! Tax avoidance and evasion
! Charitable bequests
! Calculating tax, debts and liabilities

Questions

Post Workshop Action Plan
! Complete
the
Post
Workshop
AcKon
Plan
31

Reference Material
Family Financial Freedom
140 pages
ISBN 978-1-60-746269-9
Available Formats:
6"x9" paperback
PDF download
eBook download
Link to order:
http://www.fastpencil.com/publications/4498-Family-Financial-Freedom?
tid=bookbuy#read_book
Also available on Kndle, Nook, iPad and other popular e-readers can be ordered
from Amazon or Barnes and Noble in paperback (available soon).
Book summary: You might be struggling to make ends meet, but
achieving true financial freedom is still possible. The good news is virtually
anyone with a desire to learn and the willingness to plan can achieve a
considerable degree of financial security.
This book is a road map to the personal financial freedom you want and
deserve. There are no quick-rich schemes here, just common sense advice on
how to manage your money, protect your family from risks and start making
the moves to being more financial secure.

Family Financial Freedom Seminars
• This series of seminars on family financial freedom is available to all trainers,
educators and professional advisors in the financial services industry.
• The series of seminars can be taught with or without the book, “Family Financial
Freedom”.
• Here is a full listing of seminar topics:
1. Geng
Started
2. Making
Your
Money
Work
For
You
3. Building
the
Base
4. Securing
the
Base
5. Financing
Your
Future
6. Mutual
Funds
7. Real
Estate
8. Your
investments
9. ReKre
in
Comfort
10. Passing
On
Your
Wealth
11. How
Professional
Can
Help
• A leader’s guide and participant’s workbook is also available.
Order your copy from Scribd
• Contact the author, Floyd Saunders for pricing and order details to
purchase the entire series of seminars: floyd.saunders@yahoo.com

Passing Your Wealth On - Module 10 of Family Financial Freedom

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Passing Your Wealth On - Module 10 of Family Financial Freedom