1. HAUSWIESNER KING LLP Estate Planning 101 Wills, Trusts and Powers of Attorney Peter King HAUSWIESNER KING LLP February 21, 2007

2. HAUSWIESNER KING LLP Will Legal declaration of person's wishes regarding disposition of his or her property or estate after death Legal declaration of person's wishes regarding disposition of his or her property or estate after death

3. HAUSWIESNER KING LLP Why a will? Property Distribution Property Distribution Reduce Taxes Reduce Taxes Name Fiduciaries Name Fiduciaries Allows executor Allows executor Designates individuals as guardians for children Designates individuals as guardians for children Waives security on bond Waives security on bond Provides for disabled family member Provides for disabled family member

4. HAUSWIESNER KING LLP Trust A fiduciary relationship with respect to property, in which the trustee holds property for the benefit of another person (the beneficiary). A fiduciary relationship with respect to property, in which the trustee holds property for the benefit of another person (the beneficiary).

5. HAUSWIESNER KING LLP Trust Advantages Avoid Probate Avoid Probate Funded living trust avoids having assets included in the grantor’s probate estate Funded living trust avoids having assets included in the grantor’s probate estate Avoids delay of probate and reduces expenses Avoids delay of probate and reduces expenses Privacy Privacy No public record; avoids publicizing asset value No public record; avoids publicizing asset value Easier Management During Incapacity Easier Management During Incapacity Tax Savings Tax Savings

6. HAUSWIESNER KING LLP Trust Types Revocable v. Irrevocable Revocable v. Irrevocable Grantor v. Non-Grantor Grantor v. Non-Grantor Living v. Testamentary Living v. Testamentary Funded v. Unfunded Funded v. Unfunded

7. HAUSWIESNER KING LLP Revocable v. Irrevocable Revocable Trust: Settlor retains right to alter, amend or revoke trust and re-acquire assets Revocable Trust: Settlor retains right to alter, amend or revoke trust and re-acquire assets Irrevocable Trust: Settlor cannot revoke but may retain power to make investment decisions and control distribution of income and principal to beneficiaries (Relinquishing all rights may be better for estate tax purposes) Irrevocable Trust: Settlor cannot revoke but may retain power to make investment decisions and control distribution of income and principal to beneficiaries (Relinquishing all rights may be better for estate tax purposes)

8. HAUSWIESNER KING LLP Grantor v. Non-Grantor Grantor: Settlor retains certain rights or powers over trust, will be taxed on income generated Grantor: Settlor retains certain rights or powers over trust, will be taxed on income generated Non-Grantor: Settlor gives up any right to income and most discretionary powers; trust becomes separate entity for tax purposes Non-Grantor: Settlor gives up any right to income and most discretionary powers; trust becomes separate entity for tax purposes

9. HAUSWIESNER KING LLP Living v. Testamentary Living Living Trust created during settlor’s lifetime Trust created during settlor’s lifetime In Virginia trustee is not required to file annual accountings with the commissioner of accounts unless required to do so by instrument or court order In Virginia trustee is not required to file annual accountings with the commissioner of accounts unless required to do so by instrument or court order Testamentary Testamentary Trust is created under a testator’s will Trust is created under a testator’s will Trustee is required to file accountings with commissioner of accounts unless decedent directs accountings are not required Trustee is required to file accountings with commissioner of accounts unless decedent directs accountings are not required

10. HAUSWIESNER KING LLP Funded v. Unfunded Funded: Property from settlor’s estate is placed in trust Funded: Property from settlor’s estate is placed in trust Unfunded: Trust is set up without any property in it. The property “pours over” from a clause in the pour-over will Unfunded: Trust is set up without any property in it. The property “pours over” from a clause in the pour-over will

11. HAUSWIESNER KING LLP Common Trusts Bypass Trust Bypass Trust Qualified Terminable Interest Property Trust (QTIP) Qualified Terminable Interest Property Trust (QTIP) Special Needs Trusts Special Needs Trusts Pet Trust Pet Trust Spendthrift Trusts Spendthrift Trusts Irrevocable Life Insurance Trusts Irrevocable Life Insurance Trusts Charitable Remainder Trusts Charitable Remainder Trusts

12. HAUSWIESNER KING LLP Trust Alternatives Uniform Transfers to Minors Act Uniform Transfers to Minors Act Uniform Custodial Trust Act Uniform Custodial Trust Act POD Bank Accounts, Savings Accounts, US Savings Bonds, TOD Investments POD Bank Accounts, Savings Accounts, US Savings Bonds, TOD Investments Family Limited Partnerships Family Limited Partnerships

13. HAUSWIESNER KING LLP Powers of Attorney Durable Power of Attorney Durable Power of Attorney Principal authorizes agent (attorney-in-fact) to act on his/her behalf in the event of disability or incapacity Principal authorizes agent (attorney-in-fact) to act on his/her behalf in the event of disability or incapacity Advanced Medical Directive (Medical Power of Attorney) Advanced Medical Directive (Medical Power of Attorney) Specifies desires during a terminal illness where death is imminent Specifies desires during a terminal illness where death is imminent Allows principal to designate agent to make health care decisions if incapacitated or disabled Allows principal to designate agent to make health care decisions if incapacitated or disabled Indicates procedures principal authorizes agent to withhold and withdraw Indicates procedures principal authorizes agent to withhold and withdraw