ESTATE PLANNING FOR GATEWAY SENIOR CIRCLE. Presented by Jill Bartee Ayers Batson Nolan PLC 121 S. Third Street Clarksville, TN

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1 ESTATE PLANNING FOR GATEWAY SENIOR CIRCLE Presented by Jill Bartee Ayers Batson Nolan PLC 121 S. Third Street Clarksville, TN

2 Estate Planning What is it? Documents needed Advantages / Pitfalls How it works Important ingredients 2

3 Estate Planning - What is it? To control your property while alive, take care of your loved ones and yourself if you become disabled, and, upon your death, give what you have to whom you want, the way you want, with tax strategies that work with your goals. 3

4 Common Goals Direction for Asset Distribution Farm or Business Continuation Reduce or Eliminate Death Taxes Provide for the Unexpected Illness or Disability Reduce stress on family Take Care of Family and/or Charities 4

5 What is involved? More than just a Will Includes multiple documents to insure your wishes are carried out Provides a smooth transfer of assets to the next generation Plans for non-death situations 5

6 Team Approach Qualified Estate Planning Attorney Accountant Insurance Agent Financial Planner Everyone needs to be in the loop and working for you to accomplish your goals 6

7 Starting Point What do you have and who do you want to have it? Inventory Taking Stock List of assets, debts Life insurance Real Property/Deeds IRA, 401K, Other Investments Collectables Other names, ages of heirs 7

8 Possible Documents Durable General Power of Attorney (Finance) Durable Power of Attorney for Health Care - Advanced Care Plan Living Will Will Trusts Other tools or documents 8

9 Durable General POA Durable General POA - for Finances Need primary and back-up Agent Can name more than one person, but be careful and specific You can limit authority Springing Power of Attorney Valid until death POA s authority ceases at death of grantor Conservatorship required if disability and no POA often undesired consequences 9

10 Medical Directives Advanced Directives TN law change in 2004 Advance Care Plan Health Care Agent Level of life support You decide, not doctor or family Organ Donation Very important for HIPAA 10

11 Will Yes, you need one! Over 55% die without one No will = you die Intestate Tennessee has a will for you You may not like it! 11

12 Will Simple Will covers basics Can be as detailed as needed Allows you to give things as you desire Clears up possible confusion and reduces stress 12

13 Will Names Executor(s) Address Bond for Executor(s) Address Inventory requirement Terms of the will Beneficiaries Naming of Guardian or Trustee Minors Other Special Considerations 13

14 Types of Wills Holographic hand written Do It Yourself Forms- risky Competent Estate Planning Attorney 14

15 Probate Not that complicated Generally not that expensive Executor oversees the process Most counties require attorney Usually 6 month process; longer depending on tax issues or other complications Large estates more complex Will is a public record 15

16 Revocable/Living Trusts Definition: A legal entity which can hold title to assets for the benefit of one or more persons. Creator of trust = Trustor or Grantor Person overseeing trust = Trustee People receiving benefits = Beneficiaries 16

17 Revocable/Living Trusts Often promoted by salespeople Do Not always prevent Probate, but can if done correctly Usually more expensive than Wills MUST be continually updated to work Should be combined with a pour-over will Whether you need one depends on your goals 17

18 Trusts Other types of Trusts Testamentary Irrevocable Charitable Minors Special Needs Spendthrift Tax Planning 18

19 Tax Issues Gift Tax Up to $13,000 each year tax free Estate / Inheritance Taxes Uncertainty under Current law 19

20 Federal and TN Exemptions Year Federal Exclusion State Exemption $675,000 $675, $1,000,000 $700, $1,500,000 $850,000- $950, $2,000,000 $1,000, $3,500,000 $1,000, $0 $1,000, $1,000,000 -???? $1,000,000 20

21 TN Inheritance Tax Rates Net Taxable Estate Tax Rate Not over $40, % $40,000 - $240, % $240,000 - $440, % Over $440, % 21

22 Medicaid Issues Lookback was 3 years NOW 5 years Any assets gifted or sold below market or tax value delays Medicaid Not eligible until amount of gift has been paid If asset sold where did cash go Exceptions 22

23 Other Considerations Disability Insurance Long term care Insurance Burial Prepayment / Insurance Burial Instructions 23

24 Communication Important ingredient! Everyone must be on the same page! You should communicate your wishes to appropriate people BE RESPONSIBLE AND GET IT DONE! 24

25 Thank You Questions? Jill Bartee Ayers Batson Nolan PLC 121 S. Third Street Clarksville, TN