Presentation on theme: "USC Office of Gift Planning"— Presentation transcript:
1 USC Office of Gift Planning BASIC CALIFORNIAESTATE PLANNING_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Lindsay Sellers, J.D.USC Office of Gift Planning
2 TODAY’S TOPICSPlanning starts with goals & values – strategies & techniques followEveryone should have an estate planPlanning for potential diminished capacityUpdate on 2014 Estate and Gift TaxCommunicate with family and advisors
3 GOALS AND VALUES Set your goals Communicate your values – in words, deeds and estate planStrategies and techniques follow goals and values
4 ESSENTIAL ESTATE PLAN Everyone needs an estate plan Foundational documents:A WillRevocable Living TrustPower of Attorney for Financial MattersPower of Attorney for Health Care
5 LAST WILL AND TESTAMENT Most Wills are “pour over” Wills used in conjunction with an existing revocable Living TrustIf a Will is used as the only estate planning document, it will have to be submitted to the local Probate Court at death for a supervised administration process (2-3 years)Executor administers a Will and may have to post a “bond”
6 REVOCABLE LIVING TRUST Living trusts can be individual or joint (spouses)Living trusts may be changed at any time by a signed amendment made by the creator(s) of the trustJoint living trusts generally become partially irrevocable (i.e. unchangeable) at the death of the first creatorCan be funded during life without altering ability to access , invest, and spend assetsBiggest advantage - fully funded living trusts avoid the need for probate at death of creator(s)Protection for children of prior marriagesGeneral Assignments
7 ORGANIZATION IS KEY Keep an updated inventory of assets Keep important documents in a safe place – easy to remember and where others knowGive copies to your advisors
8 “TITLE” TO ASSETS – IMPORTANT Know how title is held for every asset“Funded” living trustReal estate – joint tenancy, community property, tenants in commonSuccessor beneficiary designations:Pensions/IRAs/retirement plansSecurities and bank accountsLife insurance
9 UPDATE YOUR PLAN Tax laws change Your goals and values change Your family changesYour advisors changeYour estate planning documents may need to change too!
10 DIMINISHING CAPACITYRisk of diminishing mental or physical capacity is a reality of aging.How can you protect yourself?How can powers of attorney help?If you have a funded Living Trust, Successor Trustees have the power to continue to administer your assets while you are alive.
11 POWERS OF ATTORNEY Management of Non-Trust Assets During Life Who should be your attorney-in-fact?If more than one – must they act jointly?What powers should they get?When should they get them? Immediately (i.e. to be able to use it if you are unavailable) or only upon your incapacity?Can be used to fund a Living Trust prior to death
12 HEALTH CARE POWERSCommunicate wishes with your doctors & person with the powerFill out forms at hospitals/clinicsCalifornia Medical Association – Advanced Health Care Directive KitOptions:Organ donationLife support preferencesReligious or other special directives
13 FIND TRUSTED ADVISORSAccountant, attorney, financial planner, insurance agentSelect them carefullyCommunicate honestly and openly with themEstimated Legal Costs: $2K-$5KFollow their advice!
14 2014 ESTATE AND GIFT TAX Estate tax exemption: $5,340,000 per person ($10.68M per couple)“Portability” of spousal exemptionTax rate – maximum rate of 40%Gift tax exemption:$5,340,000 for lifetime gifts$14,000 annual exclusion amount per donor, per doneeEducation and medical expenses
15 WE ALL LEAVE A LEGACY Avoiding Pitfalls from Bad Planning Caveat - different treatment of relatives in estate plan sometimes alienates family membersCalifornia-specific issues - litigation, community property disputes, delays, administrative and probate court expensesProp 13 and Prop 58 – exceptions to avoid reassessment of real property for property tax purposes upon a transfer to someone other than your living trust or your spouse
16 WE ALL LEAVE A LEGACY Intangible Benefits of an Estate Plan Your own peace of mindBring and keep family togetherProvide for loved onesProtect your heirsIf important, support philanthropy
17 USC Office of Gift Planning (213)usc.plannedgiving.orgLindsay Sellers, J.D.Director of Gift Planning