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Truth About Estate Planning

Truth About Estate Planning. What You Should Know Before You See An Attorney. Pauly Law Offices, Inc. Proper Estate Planning. Caring for loved ones as if you were still there With your resources With your love With your wisdom. The Estate Planning Process. Education Design

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Truth About Estate Planning

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  1. Truth About Estate Planning What You Should Know Before You See An Attorney Pauly Law Offices, Inc.

  2. Proper Estate Planning Caring for loved ones as if you were still there • With your resources • With your love • With your wisdom

  3. The Estate Planning Process • Education • Design • Drafting Documents • Implementation

  4. Estate Planning Defined • Control my property while I’m alive and well; • Plan for me and my loved ones if I become disabled • Give what I have • To who I want • The way I want • When I want

  5. Common Planning Techniques • Owning property jointly • Designating a beneficiary • Signing a will

  6. Traditional Estate Planning Gross Estate Non-probate transfers Property titled in your name Jointly owned property Life Insurance IRA’s 401(k)’s Annuities Probate Process Your Will Planned Distributions

  7. Wills Can Fall Short of Estate Planning Goals • Won’t provide for your disability • Won’t necessarily give what you have: • to whom you want • the way you want • when you want • Certainly won’t avoid probate

  8. Last Will of Jackie K. Onassis

  9. The Living Trust • It plans for your disability • It plans for your loved ones • Contains your loving instructions • Its private and confidential • Reflects your hopes, fears, dreams and values • Its good in every state

  10. How to Distribute to Your Heirs • Outright • No protection • Creditor protection • Predator protection • Self protection • Estate tax protection • In Trust

  11. Disinheriting That One Relative

  12. Basic Estate and Gift Tax Rules • It’s a tax on everything • Estate and gift taxes begin at 37% • $12,000 annual exclusion* • Unlimited marital deduction • $3,500,000 unified credit** • Unlimited charitable deduction • Use it or lose it • * Indexed for future inflation • * * Varies depending on the year of death, goes to $1,000,000 In 2011

  13. Tom and Cindy Client Tom: 55 years of age, lawyer, married 3 children. Cindy: Wife, owns video store, mother of 3 children. Peter: 25, manages video store, married Paul: 22, UNLV, lifeguard. Mary: 14, 8th grade, soccer star.

  14. Tom and Cindy’s Assets Family home $ 300,000 Furniture, household goods 50,000 Automobiles 20,000 Stocks 80,000 Video Store 350,000 Law Practice 150,000 Life Insurance 750,000 Retirement Plans 300,000 Total $2,000,000

  15. Tom’s Will Plan Tom’s Will Cindy Peter, Paul & Mary

  16. Tom’s Will Plan Tom’s Will $0 Tax Cindy $2,000,000 Peter, Paul & Mary $1,565,000 $435,000

  17. A Better Plan $0 Tax $0 Tax Marital Trust $1,500,000 Family Trust $1,500,000 $1,500,000 Coupon Peter, Paul & Mary Tax Savings $435,000 $0 Tax $3,000,000 $0 Tax

  18. Maximizing the Use ofthe Credit Shelter Exemption • One dimensional planning • All to spouse • Wastes one unified credit • Two dimensional planning • Use of credit shelter trust on first death • Saves a minimum of 435,000 in estate taxes

  19. The Next Step • Complete Estate Planning Worksheet • Seek Competent Legal Counsel • Pauly Law Offices • 916-207-7526

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