Estate Planning
My major for my Masters in Financial Planning was in Estate Planning
primarily because I viewed this as one key area that was not being properly
addressed by the public. People spend thousands of hours during their lifetime
trying to build an estate, but just a couple hours determining what will
be done with it. It is a sad commentary indeed to deal with a surviving spouse-
most often the wife- where the man adamantly refused to do any proper planning
for his family. As Edward Young noted,"All men think all men mortal, but
themselves." It also shows up with small businesses that terminate upon death
due to no survivorship planning.
AT LEAST DO A WILL TODAY.
Irrevocable Life Insurance Trusts and Trustee
Fiduciary Duty
John Hancock ILIT Policy Analysis This is the real
life analysis that is referenced above.
A report describing the fallacies of knowledge and competency from planners
to B/D Firms, attorneys and arbitrators.
Factual and objective. It is based on this solid premise: If you do not
understand diversification by the numbers, you cannot determine risk. If
you cannot determine risk, you cannot determine suitability.
"I have asked Errold Moody to provide a brief example of what he has actually
found on behalf of a client who engaged his services to review the insurance
contracts which funded the client’s estate plan. You will be amazed.
In my 30 years in the business, I have never seen an authoritative, objective,
prudent expert speak so clearly on the use of insurance. What Errold
can do is unique in the industry."
Steven Winks
Click to Buy it now!
Sample
Pages
No
Nonsense Finance eBook
The list below includes all articles and specific links in alphabetical
order with accompanying description. The listings in the column to the right
are separate sections for articles and links.
Articles have not yet been updated for new $1,500,000 estate exemption
for 2004
ABUSIVE
TRUSTS LINK: A Treasury site warning of trusts that promote tax savings
or deductions without "meaningful change in the taxpayer's control over or
the benefit from the taxpayers's income or assets."
AGING LINK: This site is provided by
the American Society on Aging and covers a myriad of issues relating to the
elderly and many not addressed elsewhere- elders of color, Gay and Lesbian
Aging issues (where one can also subscribe to a newsletter), social security
privatization, long term care, mental heath and aging, national conferences,
and much, much more. Highly recommended.
ALIMONY TRUST : An idea that might be used to
help with payments.
APPLICABLE FEDERAL RATES
LINK: You must use an interest rate in the calculation of annuities,
reversionary interests, life estates, etc.- but you can't use just anything.
You are subject to the movement of rates in the economy and as stated by
an AFR- Applicable Federal Rate for the month of use (slight variations.)
ASSET/ESTATE GROWTH LINK: The
site allows you to put in various assets at various growth rates, subtract
debts, etc. and show your anticipated estate later on in life and the associated
estate taxes. Very illuminating.
ASSISTED
SUICIDE LINK: (Annals of Internal Medicine) "Assisted suicide requires
physician involvement, but physicians' limited competence in performing the
full range of tasks, the competencies of other professions, and the possibility
that other professions could expand their authority in this area suggest
that physician-assisted suicide is a far too narrow construct of the task."
An extensive review of this difficult subject.
BAD PLANNING: So you gave your kids the same
amount of money when you died. Unfortunately, you left a legacy of unnecessary
taxes and personal resentment. This happens when you don't understand
basis. And it happens all the time. See also
Retirement Tax Planning.
CALIFORNIA INTECTACY LINK: Who
will get your money. Includes calculator
CALIFORNIA PROBATE EXEMPTION FORM: If
you have less than $100,000 in California and have no real estate, you can
possibly avoid probate. Here is a sample of the form that needs to be filled
out (check with the state to see that it is current.)
CHOICES IN DYING LINK: This
organization has fostered the rights of the individual to determine how they
might die. A truly controversial issue and this information might help you
make up your own mind or accept the decisions of others.
CLOSELY HELD BUSINESSES : Determining value
at death.
COMMUNITY PROPERTY VS JOINT TENANCY: Basic
commentary on titling with specific reference to community property in
California. If you are married and own a home, bet at least 50% own a home
as joint tenants. WRONG!
CRUMMEY
POWER LINK: An extensive review by the National Network of Estate Planning
Attorneys including ancillary issues
CRUMMEY TRUST
LINK: The Crummey Money Family Trust by Noel Ice
DEAD
LINK: U.S. Social Security Administration's Death Master File. The index
contains 63,501,998 records. You put in a name, social security number (if
known) or state, etc. and you can find the dates of birth and death
DEATH AND RELATED COMMENTARY: Euthanasia,
what are your concerns and how do you feel about it, costs, statistics
DEATH LINK 1: Excellent
commentary on Death by National Public Radio. The subject has taken on vastly
different personal positions during the last 10 years and I would suggest
you review this material for yourself and your loved ones.
DEATH LINK 2:
A site covering the SOCIOLOGY OF DEATH AND DYING with articles,
statistics, government sources, links and much, much more. Very informative
site. Try to review this before you expire.
DEATH TERMINATING
INSTALLMENT SALE, INSTALLMENT SALE AND PRIVATE ANNUITY: Various
methods of transferring assets to beneficiaries before death
DISCLAIMERS: If you wish to disclaim an
inheritance, here is an update from Bank of the West
DISEASE/DEATH
LINK: Notifiable Diseases/Deaths in Selected Cities Weekly Information.
Astound your friends and families with interesting statistics at cocktail
parties, bar mitzvahs, golfing dates and more. Become the person looked up
to in your community.
DOCUMENTS LINK: Everything
from a living will ($29.95) to a LLC (Limited Liability Corporation) for
$49.95. It is a simplistic and, obviously, inexpensive way to draft formal
documents. But you have to know what you want and how they work before you
start- something that I don't think most novices would know. Preferable to
use an attorney. That said, you could start here and prepare what you think
is correct and then review with an expert for far less money overall.
DYING INSTRUCTIONS
LINK: (pdf) By R. Douglas Pauley. Darn good material if you are
dying
DYNASTY TRUST
LINK: An estate planning method to leave money to beneficiaries for
generations
ELDER ABUSE LINK: This
site from the National Center for Elder Abuse contains many resources to
help you find the assistance, publications, data, information, and answers
you need.
ELDER ABUSE LAWS
LINK
ELDER ISSUES LINK: A good site that
links to many areas for the elderly- legal, financial, social, etc.
Highly recommended
ELDERCARE ATTORNEYS LINK: This is the
home page for the National Association of Eldercare Attorneys. They specialize
in legal issues for the elderly.
ESTATE COMMENTARY: Miscellaneous estate planning
issues
ESTATE PLANNING ATTORNEYS LINK: This
is a link to the American College of Trust and Estate Counsel. No, I am not
endorsing any of the attorneys on their list, but they do have far more
background and experience than the "standard" attorney. However, I'd still
want one that could use the HP12C- otherwise
you simply can't do effective estate planning.
ESTATE PLANNING BASICS: Generalized comments
about $10,000 gifting, $675,000 lifetime exemption, unlimited marital deduction
and trusts. Just a short primer before you read full text indicated below.
ESTATE PLANNING FOR THE DISABLED: Short commentary
on an Escher Trust.
ESTATE PLANNING
FOR THE LUCKY LINK: You may never win the lottery, but there is a lot
more than just taking the money. If you really want to make it simple,
just send me the money. All of it. now!
ESTATE PLANNING LINK 1: Nice overview
by Illinois attorneys and has info on many areas worth reviewing. Of course
some of the material is redundant with what I may write or exists on other
pages, but the validation of various issues is always good to see. And if
the material is different, it means more homework must be done to ferret
out the truth.
ESTATE PLANNING QUIZ: Short exercise to see if you
engaged a competent estate planning attorney
ESTATE
SAMPLE DOCUMENT LINK: Irrevocable Life Insurance Trust, Irrevocable Life
Insurance Trust (Second-To-Die), Split Dollar Life Insurance Agreement, Wage
Continuation Plan Guidelines, Deferred Compensation - Rabbi Trust and more.
Of course you still need an attorney to make them state specific, but it
gives you an idea of what is required.
ESTATE TAX COMPUTATIONS : Basic estate tax
computations with example
ESTATE TAX COMPUTATION LINK: I have
provided the full document for determining your estate tax. But this java
based form allows you to put in all your assets, subtract liabilities and
gives you an instantaneous reading
ESTATE TAX FORM 706 LINK:
Descriptions and Commentary to help planners formulate estate plans.
ESTATE
TAX STATISTICS LINK: An extensive article showing the costs of
taxes on an estate with numerous charts and statistics. For serious planners,
the info doesn't get any better. Look for the article, "04/17/2000 News Analysis
-- For Richest Americans, Two-Thirds of Wealth Escapes Estate Tax"
ETHICS AND SUICIDE
LINK: Extensive commentary on all areas of suicide- assisted suicide,
grief, research. Very extensive
EUTHANASIA LINK: This is a controversial
area but something you should at least be aware of. Recognize that while
you may find it morally reprehensible, others believe it to be their right
and you may need to discuss the issues intelligently. This should help.
DEATH TERMINATING INSTALLMENT SALE :
Comments on a unique way to pass assets.
FAMILY GIVING : Issues you should consider
before giving money away. One item I'll tell you about now. PUT IT IN WRITING
FEDERAL
ESTATE CODE, STATE PROBATE RULES, NEW ESTATE LEGISLATION LINK:
The site provides the tax code- as also identified elsewhere- but
also links to state probate, property and taxation codes plus more and reference
to new laws.
GENERATION SKIPPING TRUST: An attempt
to leave assets to beneficiaries several generations away can result in HUGE
estate taxes. Here are a couple things to review to maximize the amounts.
GENERATION SKIPPING
TRUST CODE LINK: The IRS code "explaining" how the generation skipping
law is applied.
GENERATION SKIPPING TRUST LINK:
It tries to explain in laymen's terms what the code above identifies.
Where there's a will, there's a relative
GLOBAL WILLS LINK: This is a fee
site that allows you to write a will in different countries. Might give you
insight on what happens in various areas of the world.
GRANTOR
DEFINITION LINK.This document contains IRS final regulations regarding
necessary guidance in determining who is the grantor of a trust. These
regulations affect trusts and any person creating or funding a trust.
HEALTH CARE DURABLE POWER OF ATTORNEY
LINK: Hospice of Michigan offers a good FAQ section on the importance
and the process of establishing
HOW
MANY YEARS LEFT LINK- This is an article on assisted living. But go down
to the middle of the page and try the chart. For each age, it can show you
how many years a man or woman statistically has left. Of course, these numbers
are in my section for life expectancy, but this is more fun and visual.
ILLUSTRATIONS: Basic strategy of leaving
money to spouse with use of unlimited marital transfers, testamentary and
living trusts, use of life insurance, growth of assets, first and second
to die policies. Good overview with tables. Also chairs
INSURANCE AT DEATH: There is plenty of
commentary herein on the fact that insurance is generally included in one's
estate upon death. But how about your wife or husband buying a separate policy
on the spouse. Surprise- it is loaded with problems.
INSURANCE IN A TRUST:
Trust owned life insurance will create a significant fiduciary
exposure and liability for the unknowledgeable trustee. How are they doing
so far?
INTEREST RATE EFFECTS ON VARIOUS ANNUITIES:If
you have a charitable remainder trust- and others- what are the effects upon
it when interest rates change.
IRREVOCABLE
LIFE INSURANCE TRUST LINK: A primer
IRS ESTATE AND GIFT
TAX LINK: Primarily for the practitioner, this site has Subtitle B
information- gift, estate and generational skipping tax, special valuation
rules, etc. However, how to interpret and use it is an entirely different
matter.
LARGE LIFETIME GIFTS: Got lots of money and going
to live another three years. Could be worthwhile to consider to gift now
and save some money overall.
LEGAL DOCUMENTS LINK 1: It includes
most of the above plus leases, real estate and partnership agreements for
minimal fees. I'd look at both of the sites and compare against each other.
While a "for fee" site is generally more up to date (if they want to stay
in business) just remember what I said above. If you do this stuff yourself,
you better know what you are doing or you are apt to screw up a lot of unintended
issues.
LEGAL DOCUMENTS LINK 2: Yet another
interesting site that allows you to do all types of documents including limited
liability, living trusts, wills- even restraining orders- for a reduced fee.
Worth reviewing.
LIFE,
DEATH AND HEALTH STATISTICAL LINK: Huge database of info from the CDC.
Great material Once again, the government puts out a great site.
LIFE EXPECTANCY: If you are 45, how long
do you have to live? How about age 65 or 75 or even 85. You must know these
numbers in order to do estate, insurance or retirement planning. See also
ACTUARY
"There is no cure for birth and death save to enjoy the interval."
George Santayana
LIFE
EXPECTANCY LINK 1 This site allows you to plug in answers and get
a result.
LIFE
EXPECTANCY LINK 2: This is a more involved 43 question test from
a statistician at the University of Pennsylvania
LIFE EXPECTANCY LINK 3:
Go to life expectancy calculator and then automated calculation.
LIFE
EXPECTANCY LINK 4: MSN Calculator
LIFE
EXPECTANCY LINK 5:
LIFE
EXPECTANCY TABLE LINK: (CDC) In 2000, overall life was 76.9 years.
Blacks males were significantly less at 68.4 years versus 74.9 years
for whites. Black women were at 74.9 years versus 80 years for women.
LIVING WILLS
LINK: They can open the door to a positive, caring approach to
death. Elderly inpatients are often confused by the term
living will, but most would welcome the chance to discuss issues about facing
the end of life, and many would want to limit their health care if they were
terminally ill.
LIVING WILL LINK 2: A
free service to register your wishes that is stored at its site. Simply register
your advance directive with the U.S. Living Will Registry by filling out
a form that gives the Registry permission to fax a copy to any health care
provider.
An advance directive allows a person to make their health care choices known
in advance of an incapacitating illness. It is a legal document in which
you state how you want to be treated in the event you become very ill and
there is no reasonable hope for your recovery. Although laws vary from state
to state in America, there are basically two kinds of directives:
A Living Will is a legal document in which you state the kind of health care
you want or don't want under certain circumstances.
A Health Care Proxy (or durable health care power of attorney) is a legal
document in which you name someone close to you to make decisions about your
health care in the event you become incapacitated.
LIVING
WILL STATE FORMS LINK: You can download your particular state and fill
in.
LONGEVITY LINK: International Longevity
Center- An affiliate of Mount Sinai School of Medicine. Check the publications
section for lengthy articles.
MONEY STATISTICS DURING LAST YEAR OF LIFE : People
really don't have that much.
MORTALITY LINK: U.S.
statistical data for deaths and birth from the U.C. Berkeley Mortality Database.
Includes data for men and women, whites and blacks.
MORTALITY TABLES LINK
ODDS OF SURVIVING: What are your odds of surviving
to the next year?
OREGON SPECIAL NEEDS TRUST
LINK: Great info for those with disabilities.
PASSING ASSETS TO HEIRS : Limited commentary
on preferred/common stock and limited partnerships.
PERIODIC LIFE TABLE
LINK: See how long you have to live. Lots of fun.
PERSONAL
RESIDENCE TRUST LINK: IRS regs. You need to type in the numbers
25 CFR 25.2702-5
PET ESTATE PLANNING
LINK Many pets are members of the family. Learn what to do for
them before they have to euthanize you.
PET GUARDIANS: If you really love your pets, who will
care for them after you die?
PROBATE: Commentary and chart on various state
regulations, time frame for probate, approximate costs, etc.
PROBATE PROCESS : Overview of the intricacies
of the probate. It's not always bad to use probate, particularly in small
estates. But if anything is going to go wrong, it will probably go wgnro
here.
PRUDENT MAN
RULE LINK: The Uniform Prudent Investors Act was completed by the Uniform
Law Commissioners in 1994. This act removes much of the common law restriction
upon the investment authority of trustees of trusts and like fiduciaries.
It allows such fiduciaries to utilize modern portfolio theory to guide investment
decisions. A fiduciary’s performance is measured on the performance
of the whole portfolio, not upon the performance of each investment singly.
The act allows the fiduciary to delegate investment decisions to qualified
and supervised agents.
REAL AGE LINK: Put in all sorts of
stuff about your health and activities (eating those delicious deep fried
Twinkies) and it will tell you your "real" age. Of course if you are
smoking like a steam engine while reading this, don't bother. YOu may be
dead by the time you complete the survey.
SECOND MARRIAGE LINK:
A concise article addressing concerns about what a couple might due to
protect interests in second marriage including Qtip trust, prenuptuals and
even foreign trusts.
SENIOR LAW LINK: I have provided
one link above to attorneys that act for the seniors (Eldercare attorneys)
and another group for estate planning (American College of Trust and Estates).
But like anything else, the more you know about a subject BEFORE you engage
an attorney, broker, planner, etc, the better off you will be. It is therefore
a good idea to check out my material and the sites like the National Senior
Citizens Law Center.
STATE DEATH TAX LINK:
STATE
INTESTACY LAW LINK: The intestacy laws of each state are
different. For example, real estate acquired from a predeceased spouse
in California may be given to the predeceased spouse's heirs, while New York
does not make any distinction between the decedent's real estate and that
acquired from a predeceased spouse. Texas also fails to make this
distinction, but the real estate of a Texas decedent without any children
may be divided between the surviving spouse and the decedent's parents, brothers,
sisters, nieces, or nephews.
STATE
PROBATE STATUTE LINK:
STATE REGULATIONS: If you don't have a will,
does all of your assets pass to your spouse? Or if you want to completely
disinherit a spouse, can you? Surprise!
SUICIDE
PREVENTION LINK:
TAX GUIDE FOR ALIENS LINK:
Tough stuff- good info
TESTAMENTARY TRUSTS: You don't have
to put your assets into a revocable trust initially in order to save taxes.
You can transfer assets at death. Good idea? Universally not!
TEXT : Extended commentary on many issues of estate
planning. Includes who you should use, powers of attorney, wills, living
trusts, unlimited marital transfer- lots of stuff. Long article so be prepared.
TRUSTEE: Solid review of how to select a trustee.
Would dovetail this with WHO CAN YOU TRUST. One
of the worst errors made by grantors is the improper selection of trustees,
particularly corporate entities. Be sure and read the commentary on Trust
Protectors.
TRUST
LINK: Nooteboom, Bart (Tilburg University, Center for Economic Research)
Trust is full of puzzle and paradox. Trust is both rational and emotional.
Trust can go beyond calculative self-interest, but has its limits. People
may want to trust, while they may also feel threatened by it. If trust is
not in place prior to a relationship, on the basis of institutions, prior
experience, or reputation, it has to be built up, in specific relations.
Professional article.
TRUST GLOSSARY
LINK: Good concise definitions of trust related issues
TRUST OWNED LIFE INSURANCE, IS IT AN ACCIDENT WAITING
TO HAPPEN: Great article by Mark Teitelbaum on the breach of fiduciary
duty in the review of life insurance.
TRUST PROBLEMS : Just because a trust was
completed doesn't mean you can't still have problems. Real life example
UNIFIED RATES FOR ESTATE AND GIFT TAX: Generally,
if you leave more than $1,000,000 when you die, anything above that starts
getting taxed at 41%. This clearly makes the case for proper estate planning
UNIFORM PROBATE
CODE LINK: 18 states have now accepted the UPC in some format.
VIATICAL
QUESTION LINK: The Consumer Reports has compiled a list of concerns to
recognize before investing in a viatical settlement.
VIATICAL SETTLEMENT LINK : This
site by viatical author Gloria Wolk provides some good insight to the various
settlements along with the risks and warnings for people that do not
do their homework. This is an involved area during the end of life that requires
careful review before utilization.
WIDOWNET LINK: A support
page for all the issues of grief, bereavement, recovery, etc. effecting someone
recently widowed. Highly recommended
WILL LINK: This site will
let you construct your own will for $19.95. It doesn't surpass a formal draft
by an attorney, but it is better you have a will than nothing at all.
WILL LINK 2: This site will
let you construct your own will for $19.95. It doesn't surpass a formal draft
by an attorney, but it is better you have a will than nothing at all.
WRITE
A WILL LINK: The whys and wherefors of doing a basic will as addressed
by attorneys.
"Nobody on his deathbed ever said,
'I wish I'd spent more time at the office."'
Paul Tsongas
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