GETTING YOUR ESTATE IN ORDER. Your Guide to Ensuring Your Family is Taken Care Of and Your Legacy Remains Intact

Transcription

1 GETTING YOUR ESTATE IN ORDER Your Guide to Ensuring Your Family is Taken Care Of and Your Legacy Remains Intact

2 Welcome Thank You For Requesting Your Estate Guidebook! The thought of passing away is one that many people tend to avoid thinking about, and for good reason. No-one wants to spend time focusing on what happens when we re no longer here. No longer able to spend time with our family and our loved ones. No longer able to laugh together. No longer able to live together. No longer able to do all the things in life that we loved to do. What s most important, however, is not to dwell on the things that you ll miss most, but instead focus your positive energy on your legacy how people will remember you and what they ll remember you by. By spending time thinking about how you can improve the lives around you when you are gone, you ll be able to put your mind at ease, knowing that everything is taken care of and that your estate is in good order. So, where do you begin? Thinking of and planning for a future where you re no longer around is not easy. For many people, they have no idea where to begin. Even the thought itself is daunting. That s why we ve done everything we can to help make the process easier, more comfortable, and less of a burden on you and your loved ones. The strategy is simple. Take the time to walk through this guide book together by yourself, or with family, or with anyone else who can help you plan for your future and your legacy. We will be here to help you in any way we can, every step of the way. 2

3 Table of Contents Table of Contents Welcome and Overview.. 02 Famous Estate Planning Failures.. 04 The 3 Challenges of Estate Planning.. 06 Your Goals, Wishes & Desires. 08 Estate Planning Terms & Definitions. 15 Getting Your Estate in Order 22 3

4 Famous Estate Planning Failures What Can Happen if You re Not Prepared? Sometimes, things don t go as planned. Here are some famous examples of estate planning gone wrong. Warren E. Burger Marilyn Monroe Age: Died: Cause: Estate Mistake: Age: Died: Cause: Estate Mistake: Elvis Presley Age: Died: Cause: Estate Mistake: Heath Ledger Age: Died: Cause: Estate Mistake: 4

5 Sammy Davis Jr. Anna Nicole Smith Age: Died: Cause: Estate Mistake: Howard Hughes Age: Died: Cause: Estate Mistake: Age: Died: Cause: Estate Mistake: James Brown Age: Died: Cause: Estate Mistake: 5

6 The 3 Challenges of Estate Planning Have You Encountered These Challenges? Estate Planning is not just for the rich and famous these days! But, regardless of your level of wealth, it s not an easy task for most of us. The reason for that is because it involves a very large amount of complex knowledge, vocabulary, and conceptual ideas, not to mention a large amount of organization. CHALLENGE #1 No Idea of Where to Start First The most common challenge of all. For many people, even knowing what to do as a very first step is difficult. That s why it s great you ve taken the first proactive step and requested this Estate Guidebook. It s a perfect first step to take to get you started with estate planning. CHALLENGE #2 Complexity of Estate Information The second most common challenge of estate planning is a lack of familiarity with the basic estate planning terms, definitions, and information. Without knowing what these items mean, making appropriate estate planning decisions is nearly impossible. CHALLENGE #3 Getting Your Estate in Order The final challenge is one that can affect even those with the motivations and the knowledge to start estate planning. How do you get everything organized? What s the first step to take? Who do I turn to for guidance and support? We can help you lead the way. Let s take each challenge one at a time and systematically, step-by-step, work through each one! 6

7 ESTATE PLANNING CHALLENGE #1 No Idea of Where to Start First

8 Your Goals, Wishes, and Desires Have You Created Your Vision For Your Legacy? How do you want people to remember you when you ve passed on? What have you accomplished in your life that you want people to know about? What special memories or feelings do you have of the loved ones in your life and do you want them to know about them? Creating your vision of your legacy is not always what people envision as the first step they need to take. Some people think they need to go to an estate-planning attorney first and start writing down all the nitty-gritty details of their finances and trusts. Well, in our opinion, that information can wait for a bit while you get a few other items in order. What needs to be done first, and is of utmost importance, is spending the time to detail out your goals, wishes, and desires. Detail out everything that s of special importance or of special meaning to you. After all, this is your life your legacy. What do you want it to look like? 8

9 1. How would you want people to remember you by? What kind of person are you? What are the things that you liked to do most? 2. What is the most important thing you ve done in your life? Is there a moment that stands out in your mind? Perhaps a specific accomplishment of some sort? 3. What are the best experiences of your life? What stands out as your best experience ever? Perhaps there is more than one? 9

10 4. What values do you want people to know that you lived by? What kind of person do you feel you are? What are the values most important to you? 5. What would you like to have changed or improved in your life? Is there anything that you would want to be different for those in your life? 6. What wishes would you want to have happen after you re gone? What would make you rest at easy knowing that your last wishes could be achieved? 10

11 7. Any specific thoughts you would like to share with people in your life? Name: Please list your thought below: Name: Please list your thought below: Name: Please list your thought below: Name: Please list your thought below: Name: Please list your thought below: 11

12 Name: Please list your thought below: Name: Please list your thought below: Name: Please list your thought below: Name: Please list your thought below: Name: Please list your thought below: 12

13 Your Next Steps Additional Ideas for Creating Your Legacy Completing the questions on the previous pages is a great starting point for discovering what you would like your legacy to be. But, there are other ideas that you could implement as well. Some of these items include the following: Additional Legacy Ideas: Create a picture storyboard or scrapbook timeline of your life in chronological order Author an unofficial autobiography Create a personal story book of your best memories Create a legacy video documenting your life s journey Or anything else you feel might be important for your family and friends to remember you by! 13

14 ESTATE PLANNING CHALLENGE #2 Complexity of Estate Information

15 Estate Planning Terms & Definitions What Do All of These Estate Planning Items Mean? Testamentary will, living will, living trust, revocable trust, irrevocable trusts the list goes on and on! What do all of these items mean? What are they for and what do they do? Finding the right information on all of these estate planning tools is more difficult than ever. With the abundance of the internet and millions of websites all giving different answers, determining what s good information and what s not can be a challenge. So, we ve taken all of the basic, most common estate planning terms and definitions all of them important to your legacy and broken them down into the most simplest, easiest to understand format possible. We hope that by learning the basics you ll feel more empowered to take control of your estate planning affairs and can further work towards creating the legacy you ll be remembered by. Let s take a look a closer look at some of these items. 15

16 Testamentary Will A Will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his estate and provides for the transfer of his property at death. It is primarily used to distribute your assets upon passing away. Many people often choose to create a Will where all of a spouses assets pass to the living spouse, but there are many different ways that a Will can be written. A Will only controls assets in your name. Upon passing the wishes expressed in your Will are enforced by a probate court. Probate costs can be expensive, eating into the assets of your estate. Each state has an individual asset exemption limit, whereby if your estate is over that exemption limit, your estate will be subject to probate. Probate can take a long time to complete, in many cases, 6 months or longer is the norm. The person assigned to distribute is called the Executor of your estate. This person will be responsible for distributing the assets that you ve listed in your Will, according to your wishes. It is common to name someone whom you trust to be the Executor of your estate, in many cases it can even be your spouse. As long as that person is capable and competent enough to handle business and financial estate decisions, they can be a good choice to be the Executor. Special Will Considerations Any special needs of your children, grandchildren, or others designated in your Will? Is your Will current? When was it created or last updated? Do you plan to pass any assets to beneficiaries who are too young to currently manage them? A Living Will A Living Will allows you to direct who gets to make decisions regarding termination of or withholding of medical procedures on your behalf. This is relied upon should you be incapable of making decisions for yourself. 16

17 Financial Power of Attorney A Financial Power of Attorney allows you to designate who should act on your behalf to manage your financial affairs and make financial decisions. This is relied upon should you be incapable of making decisions for yourself and can potentially eliminate court involvement on these matters. Healthcare Power of Attorney A Healthcare Power of Attorney allows you to designate who should act on your behalf to make medical decisions. When you create this document, you will choose what decisions you would like to occur based on various potential medical circumstances, according to your wishes. It is up to the individual you designate to carry out those wishes. This is relied upon should you be incapable of making decisions for yourself. A Living Trust (Revocable Trust) A Living Trust is an arrangement whereby property or assets are managed by one person or entity for the benefit of another. It is, in part, intended to be a Will substitute. Assets are transferred to the Living Trust during your life. Upon passing away, the trustee follows the instructions designated in the Trust document to distribute your assets according to your wishes. A Living Trust will avoid probate. In addition, should you become incapacitated and unable to make decisions for yourself, the trustee (or successor trustee) can be designated to manage the assets of the Living Trust on your behalf. When you establish a trust, you are called the Grantor. The Grantor is the creator of the Trust and controls it while alive. The Trustee, if different from the Grantor, manages the Trust assets. A Successor Trustee steps in for the Trustee if the Trustee is incapable of making decisions. Lastly, the Beneficiary of the Trust is the one who receives the assets when the Grantor passes away. Because the Living Trust is revocable, meaning it may be altered or terminated during the Grantor s lifetime, it is considered part of the Grantor s estate and may be subject to estate taxation. Once the Grantor becomes incapacitated or passes away, the Revocable Trust becomes Irrevocable. The Living Trust is a useful tool, and often an improvement over a Will, because it helps prevent court control of assets at incapacity and provides a better method to distribute assets. 17

18 An Irrevocable Trust An Irrevocable Trust, unlike a Revocable Trust, cannot be changed once it is established. Thus, it should be used with a bit more caution and when one is more certain of their desires. It is a very useful item for use with estate tax planning. If set up properly, once assets are placed in an Irrevocable Trust, they are removed from the control of the Grantor and thus removed from consideration of their estate for estate tax purposes. When established, the Grantor completely gives up title to the property or assets placed in the Trust and does not retain the rights to amend, revoke, terminate, or control the Trust. In addition, the Grantor will lose the ability to change any beneficiaries of the Trust and lose the ability to receive income from the Trust. An Irrevocable Life Insurance Trust (ILIT) An ILIT is a special variation of the Irrevocable Trust, and it is specifically designed to hold a life insurance policy. Commonly used for estate tax planning, a life insurance policy placed into an ILIT will have it s death benefit passed to the beneficiaries of the Trust estate tax free. It is commonly created with the sole purpose of helping to pay for estate-taxes that may be due or for paying for other estate settlement costs. What Happens if I do Nothing and Don t Have These Documents in Place? If there is no Will and no other means of dictating ones desire for their estate, then this is called passing away Intestate. When this occurs, all of your assets will go through Probate. The distribution of the property of an Intestate decedent is the responsibility of the Administrator of the estate. Typically the Administrator is chosen by the court having jurisdiction over the decedent s assets and property. This is generally the result of improper estate planning and can have serious implications on your wishes for your legacy, your financial legacy, and more. 18

19 Administering the Estate What Happens When You Pass Away? Here is the series of steps that usually occurs when you pass away. The purpose of estate administration is to resolve the decedent s responsibilities, distribute his property and assets, and to of course, plan for the funeral arrangements and burial services. 1. Funeral arrangements and burial services 2. Probate the Will, if needed, which involves these steps a. Original Will is filed with the probate court in the country the decedent lived b. Decedent s Will is verified via witnesses of signature signed on Will c. Estate administrator assigned by the court 3. Gather the assets which are subject to the estate administration 4. Provide management of the property during the administration period 5. Notify insurance companies of decedent s passing and receive insurance claims, if applicable 6. Debts and expenses of the estate are paid 7. Estate tax returns are filed and estate taxes due are paid 8. Distribution of estate property takes place, pursuant to any applicable Will, intestacy state laws, Trusts or similar legal documents in place 9. Distribution of the net estate after the debts and expenses have been satisfied 10. Close the estate 19

20 Your Next Steps Have More Questions? Having a solid understanding of the terms and definitions described previously is a great starting point for understanding estate planning. But, even with a solid foundation beneath you, it is advisable to seek expert guidance when it comes to sorting through estate planning matters. In the last section of this guide, for Challenge #4, we will review some suggestions for the best ways of seeking professional support. Next Steps For Further Research: Check to ensure that if you do have these items in place, that they are up to date! Don t have anything in place? Talk to us about what to do first It s never too young to start planning your estate. We can help you get started Research estate planning topics on the internet Visit with an estate planning professional to discuss your wishes Review additional estate planning guides for further opinions Or anything else you feel might be helpful to further your knowledge base! 20

21 ESTATE PLANNING CHALLENGE #3 Getting Your Estate in Order

22 Getting Your Estate in Order What Information Do You Need? There is a lot of information to keep track of. The more organized you are, the easier it will be for those who are distributing your assets and estate. In addition, if important crucial documents or information cannot be located or found, then it is just as if it did not exist. Thus, it s vital that you ensure your information is known, up-to-date, and available to those who may need it. In general, there are a few different categories of information you need to be aware of. They are: Personal Documents Financial Accounts Financial Papers Medical and Insurance Information Let s take a closer look at each category. 22

23 Important Information Overview Are You Prepared? The list of documents and information needed when you pass away to properly distribute your estate is daunting. That s why we will help you, throughout this guide book, to get the following information and materials in order in as simple a process as possible. Personal Documents Birth Certificates Adoption Papers Citizenship / Naturalization Papers Military Discharge Papers Last Will and Testament Trust Documents Burial Instructions Safety Deposit Boxes Powers of Attorney Financial Accounts Bank / Credit Union Accounts Retirement Accounts Brokerage Statements Pension Statements Deferred Compensation Papers Credit Card Accounts U.S. Savings Bonds Money Market Accounts Certificates of Deposit Stock Certificates / Bonds Any Additional Financial Accounts Financial Papers Real Estate Deeds Mortgage Documents Property Tax Records Inventory of Assets & Appraisals Vehicle Titles Income Tax Returns Rental and Lease Agreements Partnership Agreements Outstanding Loans and Debts Pending Legal Actions / Lawsuits Pre-Nuptial Agreement Medical and Insurance Information Health Care Provider and ID Number Organ Donor Information Living Will Life Insurance Policy Information VA Insurance Policy Mortgage Insurance Policy Property and Casualty Insurance Policy 23

24 You & Your Spouse s Information Your Information Please fill in your name as it appears on your birth certificate: First: Middle: Last: Other Names Used: Social Security Number: Date of Birth: / / Place of Birth (City, State and Country) U.S. Citizen? Yes No If No, Please Explain: Veteran? Yes No Branch/Dates (Do You Have Form DD-214?): _ Home Address: _ City: _ State: Zip Code: County: Home Phone Number: Cell Phone Number: Work Phone Number: Address: Secondary Address: City: _ State: Zip Code: County: Marital Status: Single Married Separated Divorced Widowed Spouse s Information Please fill in your name as it appears on your birth certificate: First: Middle: Last: Other Names Used: Social Security Number: Date of Birth: / / Place of Birth (City, State and Country) U.S. Citizen? Yes No If No, Please Explain: Veteran? Yes No Branch/Dates (Do You Have Form DD-214?): _ 24

25 Marriage Details & Children s Information Marriage Details Date of Marriage: / / Location: (City, State) Did you sign a pre-nuptial contract/agreement? Yes No (If Yes, please attach a copy) Were you previously married? Yes No If Yes, please list prior marriages and location of divorce decrees:_ Children s Personal Information Child # 1 (Please indicate other parent if child is not from this marriage: _) Name: Date of Birth: Address: City: State: Zip: Phone Number: Spouse s Name: _ Children s Names and Birthdates: Child # 2 (Please indicate other parent if child is not from this marriage: _) Name: Date of Birth: Address: City: State: Zip: Phone Number: Spouse s Name: _ Children s Names and Birthdates: Child # 3 (Please indicate other parent if child is not from this marriage: _) Name: Date of Birth: Address: City: State: Zip: Phone Number: Spouse s Name: _ Children s Names and Birthdates: (Please attach a separate sheet if you have more than 3 children) 25

26 Trusted Personal Advisors Trusted Advisors Attorney Attorney Type: Name: Company: Address: _ City: State: Zip: Phone Number: Financial Advisor Name: Company: Address: _ City: State: Zip: Phone Number: Employer/Benefits Dept. Name: Company: Address: _ City: State: Zip: Phone Number: Insurance Advisor Name: Company: Address: _ City: State: Zip: Phone Number: Accountant Name: Company: Address: _ City: State: Zip: Phone Number: 26

27 Trusted Friends or Associates Trusted Advisors Business Partner / Associate Name: Company: Address: _ City: State: Zip: Phone Number: Trusted Friends Name: Company: Address: _ City: State: Zip: Phone Number: Name: Company: Address: _ City: State: Zip: Phone Number: Name: Company: Address: _ City: State: Zip: Phone Number: Name: Company: Address: _ City: State: Zip: Phone Number: Name: Company: Address: _ City: State: Zip: Phone Number: 27

28 Asset Details & Total Net Worth Detailing Your Assets Type of Asset 1. Residence 2. Other real property (include location by State) 3. Listed or traded securities (other than #10 below) 4. Closely held and untraded securities 5. Partnership or sole proprietor interests 6. Cash, savings accounts, CDs, etc. 7. Cars 8. Other Personal Property 9. Cash Value of Life Insurance (Not Face Value) 10. Pension, profit-sharing, IRAs, etc. 11. Custodial Accounts (Where you are the custodian) 12. Other 13. Other YOU SPOUSE JOINT $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ TOTAL Mortgages Other Debts NET TOTAL $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ $ _ $ _ $ 28

29 Benefit Plans & Insurance Coverages Benefit Plans (Pension, profit-sharing, IRAs, deferred compensation, etc.) Type Benefit / Amount Primary Beneficiary Contingent Beneficiary Comments Insurance Coverage Type Company Beneficiary Face Amount Cash Value Existing Loans 29

30 Location of Important Documents Important Documents Document / Information Date Signed/ Created / Updated Location of Document / Policy / Records Personal Documents Birth Certificates Adoption Papers Citizenship / Naturalization Papers Military Discharge Papers Last Will and Testament Trust Documents Burial Instructions Safety Deposit Boxes Powers of Attorney Financial Accounts Bank / Credit Union Accounts Retirement Accounts Brokerage Statements Pension Statements Deferred Compensation Papers Credit Card Accounts U.S. Savings Bonds Money Market Accounts Certificates of Deposit Stock Certificates / Bonds Any Additional Financial Accounts 30

31 Important Documents Document / Information Date Signed/ Created / Updated Location of Document / Policy / Records Financial Papers Real Estate Deeds Mortgage Documents Property Tax Records Inventory of Assets & Appraisals Vehicle Titles Income Tax Returns Rental and Lease Agreements Partnership Agreements Outstanding Loans and Debts Pending Legal Actions / Lawsuits Pre-Nuptial Agreement Medical / Insurance Information Health Care Provider and ID # Organ Donor Information Living Will Life Insurance Policy Information VA Insurance Policy Mortgage Insurance Policy Property/Casualty Insurance Policy 31

32 Additional Information Additional Information Do you have a safety deposit box? Yes No It is located: The key is located: Individuals that have signature authority on the box: _ Do you have a personal safe? Yes No It is located: The combination is: Are you currently the Trustee for a Trust? Yes No If yes, the Trust document is located: Are you a beneficiary of a Trust? Yes No If yes, the Trust document is located: If Trust established, please provide a separate sheet to give guidance to the Trustee regarding distribution of assets to the beneficiaries. I have distribution rights related to the following (e.g. business arrangement, estate, etc.): My passport number is: _ My passport can be found: Are you entitled to military benefits? Yes No If yes, please list the benefits: I am a member of the following religious group(s): 32

33 Final Wishes In the Event of My Death I have the following final wishes: Funeral Home: Cemetery: Plot/Drawer No.: Minister/Rabbi: _ Pallbearers: Have you prepaid the burial costs for your funeral plot? Yes No Have you prepaid the burial costs for your casket? Yes No The information can be found: If You Have a Deceased Spouse, Parent, or Child If so, please include the following details: Name: Relationship: Location Name: Relationship: Location Name: Relationship: Location Do you wish to be buried next to any of the above mentioned individuals? Yes No If yes, please specify: Do you have the right to be buried in a military cemetery? Yes No Do you wish to be cremated? Yes No Crematory: 33

34 Special Requests Special Requests Obituary Reading: Tombstone Engraving: Organs for Donation: In Lieu of Flowers, Please Ask For Donations To: Other: 34

35 Family History and Additional Notes Family History My Parents are/were: Father s Name: _ Mother s Name: _ Maiden Name: My Maternal Grandparents are/were: Grandfather s Name: Grandmother s Name: Maiden Name: My Paternal Grandparents are/were: Grandfather s Name: Grandmother s Name: Maiden Name: Notes & Additional Information 35

36 Your Next Steps Putting the Right Team in Place The biggest difficulty in getting your estate in order is determining who will be able to help you. We recommend finding a trustworthy estate planning attorney. Find one who is knowledgeable, helpful, caring, and support. In addition, shop around for pricing and see if you can find an attorney you like who also has prices in line with what you can afford. Next Steps For Finding Your Team: 1. Seek out a good estate-planning attorney (we can potentially recommend one for you) 2. Ensure that they have a philosophy and work attitude that meshes with yours 3. Review this information with them and ensure that he will work all your goals into your plan 4. Continue to work with us to ensure any financial or insurance needs are in place 5. Take one step at a time so you don t get too overwhelmed by the process! We hope this guide has been a helpful review for your estate planning needs! 36

37 Thank You!

38 Additional Thoughts, Notes & Feelings 38

39 39

40