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


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


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


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measures will be withheld or withdrawn

Wlauul'uo for M

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


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

Wlauul'uo for M

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


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


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


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


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


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


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


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


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


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


$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)


Tax considerations-Step-up in 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,


$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 )


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


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


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


estate planning seminar - jd supra...estate planning seminar. 0 david ennis, esq. ennis law firm,...

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