Establishing and Maintaining Your Estate Plan
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Today’s Agenda
Planning Documents
Begin This Process
Estate Planning Basics
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Common Questions
Do you have an estate plan in place and, if so, when did you last update it?
1How concerned are you about the impact of taxes on your estate?
2Do you know how to begin the process of creating or updating your estate plan?
3Are you certain that your assets will pass to your heirs as you intend?
4
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Benefits of Estate Planning
Plan for incapacity
Choose a person or entity to manage assets
Plan for liquidity
Reduce or eliminate estate taxes
Preservean estate
Control the distribution
of assets
Protect family privacy and
avoid probate
Always consult an attorney who can help you by drafting the appropriate legal documents to suit your particular needs.
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Estate Planning Basics
What is the Impact of Taxes?
What is an “Estate”?
How Do Estates Change Hands?
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Defining What is Considered An “Estate”
• Cash and investments (stocks, bonds, CDs, bank accounts)
• Tangible personal property
• Interests in certain kinds of trusts
• Real estate holdings
• Retirement plans
• Life insurance policies
• Annuities
• Business interests
• Any share of joint interests
TAXABLE ESTATE (WHAT IS OWNED OR CONTROLLED)
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How An Estate Changes Hands
By Probate
By Contract
By Law
By Trust
Four ways to pass assets
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Introducing Federal Estate & Gift Tax Laws
Highlights of the current law for 2019
Top estate and gift tax rate is 40%
$11,400,000 “unified” federal lifetime estate and gift tax applicable exclusion amount*
Annual gift tax exclusion rises to $15,000 for an individual, and $30,000for a married couple
$11,400,000 federal generation-skipping transfer (GST) tax exemption†
* Transfers between U.S. citizen spouses and bequests to charity are tax free.
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Introducing Portability
Always consult an attorney who can help you by drafting the appropriate legal documents to suit your particular needs.
Portability only applies to a surviving spouse
Asset appreciation is included in the surviving spouse’s estate
The GST tax exemption is not portable
Portability must be elected
Unused federal lifetime estate and gift tax applicable exclusion amount can be transferred to a surviving spouse
Allows a married couple to make full use of all available exclusions
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Beware of State Tax Laws
State Estate Tax State Inheritance Tax State Estate Tax and Inheritance Tax
Source: Wolters Kluwer Tax & Accounting U.S., 2019
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Estate Planning Documents
How Do Irrevocable Trusts Fit In?
What is a Revocable Living Trust?
What Are The Key Documents?
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What Are the Key Estate Planning Documents?
• Durable Power of Attorney (for financial decisions)
• Last Will and Testament
• Revocable Living Trust*
• Health Care Documents, such as: Power of Attorney (Proxy)
Living Will
Medical Directives
HIPAA FORM
* May or may not apply depending on your individual situation
Always consult an attorney who can help you by drafting the appropriate legal documents to suit your particular needs.
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What Is a Revocable Living Trust?
Created during lifetime to hold and manage assets, such as investment and banking accounts and real property.
The grantor is typically the trustee and beneficiary
Income taxes are taxed to the grantor at personal rates.
The grantor maintains complete access and control over the assets owned by the trust.
The grantor can revoke or amend the trust during his or her lifetime
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Choosing a Successor Trustee
Long-term commitment to the role
4Age
3
1Trusteeexperience
2Objectivity
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The Importance of Trust Funding
What assetscould fund a trust?
What about retirement accounts?
When should a trust be funded?
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Using Irrevocable Trusts in an Estate Plan
At last death
Rather than leaving assets outright to a spouse or other heirs, an irrevocable trust may be used.
May Help MinimizeEstate Taxes
May Protect Assets From Creditors
Provide “Guard Rails” For Heirs • Minors• Financially irresponsible• Special needs
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When Should an Existing Estate Plan be Updated?
A life event
Change in state of residence
Receipt of inheritance
1 2 3
Healthissues
Change in estate tax laws
At least every three to five years
4 5 6
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Review all Beneficiary Designations
Retirementaccounts
Life insurancepolicies
Annuitycontracts
1 2 3
Review all primary and alternate beneficiary designations yearly or more frequently in response to change-of-life events (e.g., death, divorce)
SpecificallyReview:
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Tools to assist you in the estate planning processFidelity Estate Planner ToolHelps to organize and educate, and if you desire assistance, can help you identify an attorney to help you create an estate plan
fidelity.com/estateplanner
FidSafeStore, access and share digital copies of your family’s important documents
fidsafe.com
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Fidelity Estate Planner
fidelity.com/estateplanner
For illustrative purposes only. Graphics and capabilities may be modified or eliminated at any time.
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fidsafe.com
FidSafeUse to Maintain and Store Your Documents
FidSafe is not a Fidelity Brokerage Services LLC service. FidSafe is a service of XTRAC LLC, a Fidelity Investments company, located at 245 Summer StreetV3B, Boston, MA 02210.
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Be sincere
Let your loved ones know that you are putting together a plan for their benefit
Set up a time in advance or choose a time at the spur of the moment that is uninterrupted and calm
Choose a comfortable environment
Helpful Tips \for Talking to Your Loved Ones
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How Fidelity Can Help
Meet with a Fidelity advisor
Provide education and guidance with regard to common estate planning strategies
Answer questions you may have regarding typical wealth transfer strategies
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Important Information The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice.
Fidelity cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information.
Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre-and/or after-tax investment results. Fidelity makes no warranties with regard to such information or results obtained by its use.
Fidelity disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.
Always consult an attorney or tax professional regarding your specific legal or tax situation.
The Fidelity Estate Planner® is not an attorney referral service. When applicable, participating attorneys, or their respective law firms, have not paid a fee or compensation to be included or listed in the Fidelity Estate Planner, nor does Fidelity receive any fee or compensation for providing the law firm and attorney contact information to its customers. Fidelity does not recommend or endorse any law firm or attorney listed in the Fidelity Estate Planner. Fidelity is not assessing your legal needs or providing legal advice in the Fidelity Estate Planner. There is no requirement that you select any of the law firms or attorneys in the list. You are free to select any law firm or attorney.
FidSafe is not a Fidelity Brokerage Services LLC service. FidSafe is a service of XTRAC LLC, a Fidelity Investments company, located at 245 Summer Street V3B, Boston, MA 02210.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
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