establishing and maintaining your estate plan€¦ · introducing federal estate & gift tax...

Establishing and Maintaining Your Estate Plan

Copyright 1998-2019 FMR LLC. All Rights Reserved.2

Today’s Agenda

Planning Documents

Begin This Process

Estate Planning Basics


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


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.

5 Copyright 1998-2019 FMR LLC. All Rights Reserved.

Estate Planning Basics

What is the Impact of Taxes?

What is an “Estate”?

How Do Estates Change Hands?


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)


How An Estate Changes Hands

By Probate

By Contract

By Law

By Trust

Four ways to pass assets


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.


Introducing Portability


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


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


Estate Planning Documents

How Do Irrevocable Trusts Fit In?

What is a Revocable Living Trust?

What Are The Key Documents?


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



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


Choosing a Successor Trustee

Long-term commitment to the role

4Age

3

1Trusteeexperience

2Objectivity


The Importance of Trust Funding

What assetscould fund a trust?

What about retirement accounts?

When should a trust be funded?


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


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


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:


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


Fidelity Estate Planner

fidelity.com/estateplanner

For illustrative purposes only. Graphics and capabilities may be modified or eliminated at any time.


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.


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


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


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.

© 2019 FMR LLC. All rights reserved. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

453386.19.0 1.9897120.100