hauswiesner king llp estate planning 101 wills, trusts and powers of attorney peter king hauswiesner...

HAUSWIESNER KING LLP

Estate Planning Estate Planning 101101

Wills, Trusts and Powers of Wills, Trusts and Powers of AttorneyAttorney

Peter KingPeter KingHAUSWIESNER KING LLPHAUSWIESNER KING LLP

February 21, 2007February 21, 2007


WillWill

Legal declaration of person's wishes Legal declaration of person's wishes regarding disposition of his or her regarding disposition of his or her property or estate after deathproperty or estate after death


Why a will?Why a will?

Property DistributionProperty Distribution Reduce TaxesReduce Taxes Name FiduciariesName Fiduciaries

Allows executorAllows executor Designates individuals as guardians for Designates individuals as guardians for

childrenchildren Waives security on bondWaives security on bond

Provides for disabled family memberProvides for disabled family member


TrustTrust

A fiduciary relationship with respect A fiduciary relationship with respect to property, in which the trustee to property, in which the trustee holds property for the benefit of holds property for the benefit of another person (the beneficiary).another person (the beneficiary).


Trust AdvantagesTrust Advantages

Avoid ProbateAvoid Probate Funded living trust avoids having assets Funded living trust avoids having assets

included in the grantor’s probate estate included in the grantor’s probate estate Avoids delay of probate and reduces expensesAvoids delay of probate and reduces expenses

PrivacyPrivacy No public record; avoids publicizing asset No public record; avoids publicizing asset

valuevalue Easier Management During Easier Management During

IncapacityIncapacity Tax SavingsTax Savings


Trust TypesTrust Types

Revocable v. IrrevocableRevocable v. Irrevocable Grantor v. Non-GrantorGrantor v. Non-Grantor Living v. TestamentaryLiving v. Testamentary Funded v. UnfundedFunded v. Unfunded


Revocable v. IrrevocableRevocable v. Irrevocable

Revocable Trust: Settlor retains right Revocable Trust: Settlor retains right to alter, amend or revoke trust and re-to alter, amend or revoke trust and re-acquire assetsacquire assets

Irrevocable Trust: Settlor cannot Irrevocable Trust: Settlor cannot revoke but may retain power to make revoke but may retain power to make investment decisions and control investment decisions and control distribution of income and principal to distribution of income and principal to beneficiaries (Relinquishing all rights beneficiaries (Relinquishing all rights may be better for estate tax purposes)may be better for estate tax purposes)


Grantor v. Non-GrantorGrantor v. Non-Grantor

Grantor: Settlor retains certain Grantor: Settlor retains certain rights or powers over trust, will be rights or powers over trust, will be taxed on income generatedtaxed on income generated

Non-Grantor: Settlor gives up any Non-Grantor: Settlor gives up any right to income and most right to income and most discretionary powers; trust becomes discretionary powers; trust becomes separate entity for tax purposesseparate entity for tax purposes


Living v. TestamentaryLiving v. Testamentary

LivingLiving Trust created during settlor’s lifetimeTrust created during settlor’s lifetime In Virginia trustee is not required to file annual In Virginia trustee is not required to file annual

accountings with the commissioner of accounts unless accountings with the commissioner of accounts unless required to do so by instrument or court orderrequired to do so by instrument or court order

TestamentaryTestamentary Trust is created under a testator’s willTrust is created under a testator’s will Trustee is required to file accountings with Trustee is required to file accountings with

commissioner of accounts unless decedent directs commissioner of accounts unless decedent directs accountings are not requiredaccountings are not required


Funded v. UnfundedFunded v. Unfunded

Funded: Property from settlor’s Funded: Property from settlor’s estate is placed in trustestate is placed in trust

Unfunded: Trust is set up without Unfunded: Trust is set up without any property in it. The property any property in it. The property “pours over” from a clause in the “pours over” from a clause in the pour-over willpour-over will


Common TrustsCommon Trusts

Bypass TrustBypass Trust Qualified Terminable Interest Qualified Terminable Interest

Property Trust (QTIP) Property Trust (QTIP) Special Needs TrustsSpecial Needs Trusts Pet TrustPet Trust Spendthrift TrustsSpendthrift Trusts Irrevocable Life Insurance TrustsIrrevocable Life Insurance Trusts Charitable Remainder TrustsCharitable Remainder Trusts


Trust AlternativesTrust Alternatives

Uniform Transfers to Minors ActUniform Transfers to Minors Act Uniform Custodial Trust ActUniform Custodial Trust Act POD Bank Accounts, Savings POD Bank Accounts, Savings

Accounts, US Savings Bonds, TOD Accounts, US Savings Bonds, TOD InvestmentsInvestments

Family Limited PartnershipsFamily Limited Partnerships


Powers of AttorneyPowers of Attorney Durable Power of AttorneyDurable Power of Attorney

Principal authorizes agent (attorney-in-fact) to Principal authorizes agent (attorney-in-fact) to act on his/her behalf in the event of disability or act on his/her behalf in the event of disability or incapacityincapacity

Advanced Medical Directive (Medical Power Advanced Medical Directive (Medical Power of Attorney)of Attorney) Specifies desires during a terminal illness where Specifies desires during a terminal illness where

death is imminentdeath is imminent Allows principal to designate agent to make Allows principal to designate agent to make

health care decisions if incapacitated or disabledhealth care decisions if incapacitated or disabled Indicates procedures principal authorizes agent Indicates procedures principal authorizes agent

to withhold and withdraw to withhold and withdraw

hauswiesner king llp estate planning 101 wills, trusts and powers of attorney peter king hauswiesner...

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