Estate Planning: Wills and Trusts

1. Estate Planning:Wills and Trusts Chapter 19

2. Estate Planning! • Wills and trusts are LEGAL documents that help us to protect ourselves. • indicate who will make important decisions for us in the future • indicate how one’s assets will be distributed upon death. • Considered SMART financial planning • Watch The Today Show: • http://www.youtube.com/watch?v=-YWRO7E56XI&feature=related

3. Living together and estate planning • http://www.cnn.com/video/#/video/living/2012/03/10/nr-whitfield-lee-wills.cnn

4. An Estate is… • the net worth of a person at any point in time. • It is the sum of a person's assets MINUS all liabilities at that time. • In context of probate, the estate of a deceased person consists of all the property, whether real or personal, owned by the person at the time of death.

5. What is a Will? • A legal expression, usually in writing, by which a person directs how their assets and property are to be distributed after death • Decedent – deceased person

6. A Will lists specifies…. • Inheritance • the practice of passing on assets, property, titles, debts, and rights upon the death of an individual. • In law, an heir is a person who is entitled to receive a share of the decedent's property • A beneficiary

7. If there are NO inheritors, the property of the deceased is “escheats” (is given to the state)

8. Typical Distribution • Spouse and children • Grandchildren • Parents • Brothers and Sisters

9. 10 Famous People Who Died Without a Will http://www.legalzoom.com/legal-headlines/celebrity-lawsuits/10-famous-people-who-died

10. Celebrity Estate Battles Danielle discusses the case of the $13 million cat, Bob Marley, Martin Luther King, Jr., and more! http://www.youtube.com/watch?v=ydp3CTtx-wU

11. THE EXECUTORS OF THE WILL OF DIANA, PRINCESS OF WALES DECIDED TO GIVE HER GOD CHILDREN SMALL MEMENTOS, RATHER THAN THE MORE GENEROUS GIFTS DETAILED IN A 'LETTER OF WISHES'. THIS WAS ATTACHED TO HER WILL, BUT WAS NOT LEGALLY BINDING.

12. What is a Trust? • A legal document used to transfer immediate control of property to another person upon death or incapacitation • A set of instructions for your assets

13. Real Estate Lawyers • Administer and create Wills and Trusts • help clients reduce taxes or fees that may be imposed on an estate, which requires tax law knowledge • ensure that clients' wishes are properly carried out. • outline the distribution of property and management of assets after a person's death. • arrange and organize the transfer of assets from an individual to his or her heirs and beneficiaries. • Average salary: $95,000 yearly

14. Some Estate Planning Documents • Power of Attorney • Will • Living Will • Trust • Assignment of Business Interest • Bank accounts, Insurance policies, IRA and 401k Beneficiary Designation Form • Final Instructions Form : Funeral and Burial Wishes

15. CNN Assignment

16. Update on Cell Tower Debate • http://philadelphia.cbslocal.com/2012/05/15/northampton-township-neighborhood-fights-cell-towers/

17. PROBATE • Probate is a process by which a will of a deceased person is proved to be valid • To challenge a Will is To CONTEST it in Probate Court • Probate Court decides the legal validity of a will and grants its approval by granting probate to the Executor, POA. • personal representative, generally named in the will, as having legal power to dispose of the testator's assets in the manner specified in the will.

18. Probate Court • Probate Court also declares Guardianship • Our investigation exposed problems with guardians appointed by judges • http://www.youtube.com/watch?v=GzvqiHRWLg8

19. WHAT IS A GUARDIANSHIP? • A guardianship is a legal proceeding in the circuit courts of a State in which a guardian is appointed to exercise the legal rights of an incapacitated person or a MINOR.WHAT IS A GUARDIAN?an individual appointed by the court to care for an incapacitated or MINOR person -- called a "ward".WHO IS INCAPACITATED?an adult who has been judicially determined to lack the capacity to manage at least some of his or her property or to meet at least some of the essential health and safety requirements of the person

20. Can Go to Probate Court to Seek Conservatorship • Conservatorship of a Living Person:arranges for the client's care and protection, determines where he or she will live and makes appropriate arrangements for health care, housekeeping, transportation, and personal needs. • Conservatorship of the Estate:manages the client's finances, locates and takes control of the assets, collects income due, pays bills, invests the client's money, and protects the assets.

21. Michael Jackson’s Children Guardianship Battle • http://www.youtube.com/watch?v=NOBHROeRjg8&feature=fvst

22. If you die with no will or trust in place • Intestate • the courts will follow state law to disburse your assets—no matter what you may have once Verbally promised someone. • If you die with only a will in place, the courts will have to give the document a stamp of approval before divvying up your estate. • This is known as probate, and the cost of this necessary judicial step can eat up more than 5% of your estate's value and can take a year or longer to complete.

23. Death without a will • Those who die without a validwill are said to have died intestate • The court will appoint a representative known as an administrator to take charge of the intestate’s property

24. Celebrity Probate • Michael Jackson died in mid-2009.  • ongoing probate battle that is happening in California.  • At the center of this probate case is Michael Jackson’s father, Joe Jackson, who is challenging the administration of the estate.  • Interestingly, Michael Jackson excluded his father from his will in 2002, so according to the terms of the will itself, Joe Jackson really does not have an interest in the estate.  • But, perhaps because the estate has earned millions of dollars since Michael Jackson’s death, Joe Jackson has been persistent in his challenges.  • However, the court agreed with estate lawyers last week, and found that Joe Jackson lacks the requisite standing to intervene.  • Of course, Joe Jackson is already speaking about appealing the case to the California Supreme Court, so we are likely to see more of this story unfold. • Watch: http://www.youtube.com/watch?v=Un47_88bnFE&feature=related

25. A Pennsylvania Will • can only be made by persons of 18 years or more who are of sound mind. • To make a legal Will in Pennsylvania, the instrument must be: • In writing • Signed by the testator at the end of the Will.   • In the presence of two witnesses (who also sign their names to the Will in the testator’s presence and in the presence of each other

26. Living Will • A living will has nothing to do with where your assets go. • It is a medical document that tells doctors and family members what kind of care you want if you become incapacitated and cannot express wishes. • To make sure doctors follow these orders you need a trusted Power of Attorney • A person that is leally appointed (in writing) as agent over a Will

27. What is a Living will? • Used to direct a physician regarding choice of life-support, terminal illness or vegetative state

28. Facts of Estate Planning • If you do not have a Will, a State Judge will use your State’s law to determine what is going to happen to your property and assets • Handwritten, un-witnessed Wills (holographic), are only legal in 25 States

29. Death with a will • Those who die with a valid will are said to have died testate • The creator of the will is known as the testator Executor – representative named to carry out the directions of the will

30. Creation and execution • Testamentary intent - clear intention to make a will • Free of all pressure/ undue influence

31. Creation and execution 2. Testamentary capacity Must know/understand… • The kind and extent of property involved • The persons who stand to benefit • That they are making arrangements to dispose of their property after death

32. Creation and execution 3. In most states, a will must be in writing • Signing must be witnessed by at least two adults • No witness can be one who will inherit under the will

33. Amendment of a will Codicil – formal, written and witnessed amendment • Wills are to be kept up to date with life changes (ie. marriage, divorce, birth of children, etc.) • Same rules to creating a will apply to a codicil

34. Types of wills Holographic will – a written will created entirely by the makers own hand and signed (not witnessed) Nuncupative will – oral will (recognized in some states) • Must be witnessed • Distribution of property limited