the 12 steps of estate planning
Post on 03-Dec-2014
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Take Charge and
Reach Your Goals
Estate Planning
What is an Estate Plan?• A good estate plan: more than just a will– Coordinates how investments and insurance will
be handled– Manages emergency, retirement, and other
assets– Brings peace of mind to your loved ones– Keeps you on track to meet financial goals
Estate Planning
Your Estate Planning Team• Seek help from the following professionals to create
a proper estate plan:– An attorney– A CPA– An insurance consultant– An investment advisor– A financial planner
Estate Planning
Your Estate Planning Team• When looking for professionals, consider
soliciting recommendations from other professionals in a similar field. – Example: ask your banker if he or she knows a
good CPA who specializes in estate planning.
Estate Planning
Maintaining Your Estate Plan• Meet with your team annually, if possible– Review your documents – Ensure everything is up-to-date with recent
changes in your life – Check to see if new laws effect your plan– Revise, if necessary, to stay on track with goals
Estate Planning
A 12-Step Process• There are 12 steps to creating and maintaining a
comprehensive estate plan • Remember, it’s an ongoing process – A proper estate plan will be changed and
updated throughout your lifetime
Estate Planning
A 12-Step Process1. Organize all your important information2. Create a power of attorney3. Create a health-care proxy4. Create a living will5. Create a will to name executors6. Protect your children financially
Estate Planning
A 12-Step Process7. Create a revocable living trust8. Ensure your insurance is in order9. File beneficiary designations, and confirm the title to
your financial accounts and estate10.Give something back—consider charitable donations11.Communicate your plans12.Review your estate plan
Estate Planning
Your Estate and Taxes• In most cases, after you pass on taxes must be
filed for your estate. • Federal tax: Federal Estate Tax• State tax – Depends on where you live – Pennsylvania Inheritance Tax in PA
Estate Planning
The Pa. Inheritance Tax• Can differ majorly from Federal Estate Tax• The following are just a few examples
Estate Planning
Is Property Included in the Estate?• Federal Estate Tax: Based on the total assets of a
U.S. citizen or resident, regardless of the location of the assets.
• Pennsylvania Inheritance Tax: No Pennsylvania Inheritance Tax on real estate or tangible personal property located outside the state.
Estate Planning
Retirement Benefits• Federal Estate Tax: For estates of those who died
after Dec. 31, 1984, all retirement benefits are includable in the estate.
• Pennsylvania Inheritance Tax: Proceeds from qualified employee benefit plans (if any) that are exempt for Federal Estate Tax purposes are exempt from the Pennsylvania Inheritance Tax.
Estate Planning
Filing and Paying the Tax• Federal Estate Tax: The due date for filing the
return and paying is nine months after the date of death.
• Pennsylvania Inheritance Tax: The due date for filing the return and paying is nine months after the date of death.
Estate Planning
Talking about Estate Plans• Start the discussion:– It may be awkward, but if other members of
your family—like your parents–don’t have estate plans, start the discussion
– Find a way to broach the subject so it doesn’t sound like you no longer trust your parents’ judgment to make decisions
Estate Planning
Talking about Estate Plans• Timing is everything– Start this dialogue sooner rather than later.– Don’t wait for a crisis when you might not have
time to do the background work before making a crucial decision.
Estate Planning
Talking about Estate Plans• Know what they want – Ask your parents about how they want things to
be handled in case they are incapacitated. – Once you have a grasp of their requests, your
role is to help safeguard their assets and make sure their wishes are carried out.
Estate Planning
Talking about Estate Plans• Be inclusive – Family finances can be one of the biggest
sources of family strife. – If you have siblings, include them from the
outset. – Having support and making mutual decisions
regarding your parents can help in times of crisis.
Estate Planning
Resources• The PICPA– www.picpa.org/estateplanning
• Kiplinger’s Estate Planning webpage– www.kiplinger.com/reports/basics-estate-planning/
• AARP’s Estate Planning webpage– www.aarp.com/estateplanning
• The Pennsylvania Department on Aging– www.aging.state.pa.us/
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