Estate Planning and WILLS

							All that a person owns, less
  all that person’s debts
    If the deceased has executed
    proper legal documents (Will)
• The activities of the estate will be carried
  out by the executor

• Executor-person or institution named by
  the decedent to carry out these functions

• If person dies without a will (intestate), the
  state will name an administrator who will
  carry out duties
   The rights involved in estate
             planning
• Estate taxes - legal entity is required to pay
  taxes

• Inheritance taxes-those who inherit may
  become liable to pay taxes to the state.
   Language of estate planning
• Testator-person who makes out a will
• Decedent-person who has died
• Beneficiary-one who receives an
  inheritance
• Contingent beneficiary-one who takes the
  place of named beneficiary who has
  already died
• Bequest-specific property or money given
  to beneficiary
   Language of estate planning
                    Cont.
• Life Estate-form of bequest with some
  strings attached
• Executor or Executrix-person or institution
  that one names in a will to handle the affairs
  of the estate
• Administrator-appointed person if
  deceased does not have a will
• Probate-court proceeding in which validity
  of will is established
         Basic clauses of a Will

•   Introductory Clause
•   Revocation of Prior Wills
•   Debts and Final Expenses
•   Bequest Clauses
•   Survivorship Clauses
•   Appointment Clauses
•   The Execution
            Changing a Will
• 2 ways:
  – revoked by a brand new will
  – codicil-document used for minor changes
• Cannot be legally amended by crossing out
  or adding words, removing or adding pages,
  making erasures
• Copies:
  – attorney - original
  – keep a copy for yourself
  – bank if you have named them as executor or
    coexecutor
      When should a Will be amended-
         reviewed every 3 years


•   Move to a different state
•   Changes in family circumstances
•   Substantial changes in assets and liabilities
•   Heirs have died
•   Executor or guardian dies
•   Tax laws changed
           Uncommon Wills
• Beware of “do it yourself” estate planning
  shortcuts

• Holographic will - prepared in handwriting
  of testator

• Noncupative will - spoken by the dying
  individual to another party
 Other means to pass on wealth
• Trusts-strings attached

• Gifts-money can escape taxation

• Insurance

• Joint names
    What should your state plan
           accomplish
• Proper liquidity and distribution of assets
• Program of sound management of assets
• The assured continuation of a family’s
  lifestyle in the event of death, disability, or
  retirement
• Minimize taxation
  – estate taxes
  – inheritance taxes
  – income taxes