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A Sensible Approach to Planning Your Estate. Goals include, but are not limited to: Accumulating or creating your legacy Planning for the orderly distribution.

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Presentation on theme: "A Sensible Approach to Planning Your Estate. Goals include, but are not limited to: Accumulating or creating your legacy Planning for the orderly distribution."— Presentation transcript:

1 A Sensible Approach to Planning Your Estate

2 Goals include, but are not limited to: Accumulating or creating your legacy Planning for the orderly distribution of your assets Passing your assets intact by incorporating the necessary liquidity Please note: This document is designed to provide introductory information on the subject matter. MetLife does not provide tax and legal advice. Clients should consult their attorney and/or tax advisor before making financial investment or planning decisions. What is Estate Planning?

3 1. What do you want to accomplish? 2. What are the basics? 3. What are the challenges? 4. What strategies are available? 5. What can you do to ensure your goals are achieved? Five Questions to Consider

4 Estate Planning Goals Organize your personal affairs Provide for a surviving spouse and/or dependents Leave assets to your beneficiaries Reduce estate costs and taxes Protect your assets from unintended recipients 1. What Do You Want to Accomplish?

5 Property in your name Your interest in joint property Life insurance you own in your name IRAs and retirement plans Whats Included in Your Estate? 2. What Are the Basics?

6 How Property Passes at Death You Operation of Law Will Operation of Law Operation of Law Contract 2. What Are the Basics?

7 Work with a Team Financial professional Accountant Estate planning attorney 2. What Are the Basics?

8 Documents to Create with Your Attorney Will Power of Attorney (Health) Durable Power of Attorney (Financial) Living Will Documents related to small business ownership Trusts 2. What Are the Basics?

9 Trusts Grantor - Sets it up Trustee - Executes the instructions Beneficiary – Receives the benefits 3. What Are the Basics?

10 Final Expenses Debts Long term care Funeral bills Medical bills Probate expenses Taxes (federal and/or state) 4. What Could Present Challenges?

11 Probate Public can access documents Process can be slow and costly 4. What Could Present Challenges?

12 Income in Respect of a Decedent (IRD) Not only can you not take it all with you, but IRD may also prevent your beneficiaries from taking it all with them too.* If you didnt pay tax on accrued income, your beneficiaries will have to. *IRD tax deduction may be available. 4. What Could Present Challenges?

13 Potential Transfer Tax Exposure Federal estate/gift tax on estates over $5M per person (indexed for inflation after 2011) Residents of certain states with inheritance taxes or states which have decoupled Owners of highly appreciating assets Individuals expecting additional inheritances (resulting in a total estate over the basic exclusion amount) 4. What Could Present Challenges?

14 Unlimited Marital Deduction and Spousal Portability No estate taxes due on assets passing from one U.S. citizen spouse to another 5. What Strategies are Available?

15 Lifetime Gifting Annual gifting of up to $14,000* Unlimited payments directly to institutions providing certain education or medical expenses on behalf of another individual Unlimited gifts to charitable organizations 5. What Strategies are Available? *$28,000 if spouses split the gift.

16 5. What Strategies are Available? Applicable Exclusion Amount Year 2013 Estate/Gift/GST $5.25m Amount exempt from estate, gift and GST tax by the applicable credit

17 Irrevocable Life Insurance Trust Trust is owner and beneficiary of a life insurance policy Donor dies, trust lends money to, or purchases assets from, the estate Cash used to pay estate taxes 5. What Strategies are Available?

18 Life insurance Income tax deferred growth potential Income tax free death benefit Creates liquidity to pay taxes or divide illiquid assets more equitably If large charitable gifts are planned, may replace value of those gifts for heirs Possibility to leverage a limited number of premiums into sizeable death benefit Potential for guaranteed death benefits* Within an irrevocable trust Gifts to irrevocable trust reduce size of taxable estate Estate tax free death benefit *Guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company.

19 5. What Strategies are Available? Do they reflect your current wishes? Are all of your assets addressed? Do they reflect your current beneficiaries? Is there adequate liquidity to accomplish your goals? Are they flexible to accommodate future changes? Review your wills and trusts

20 Important Information Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. You should seek advice based on your particular circumstances from an independent tax advisor. MetLife, its agents and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on their own independent legal and tax advisers regarding your particular set of facts and circumstances. Like most insurance policies, MetLifes policies contain charges, limitations, exclusions, termination provisions and terms for keeping them in force. Consult the policy for costs and complete details. Insurance Products: Not A Deposit Not FDIC-Insured Not Insured By Any Federal Government Agency Not Guaranteed By Any Bank Or Credit Union May Go Down In Value CLVL23130 L [0614] © 2013 METLIFE, INC. PEANUTS © United Feature Syndicate, Inc. Life insurance products are issued by: MetLife Investors USA Insurance Company 5 Park Plaza, Suite 1900 Irvine, CA And in NY only by: Metropolitan Life Insurance Company First MetLife Investors Insurance Company 200 Park Avenue New York, NY 10166


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