1. Estate Planning Kim Scouller
Licensed to practice law in Georgia and Kentucky.
Not intended as legal advice.
Please consult a qualified attorney for a specific legal question.

2. Wills The purpose of a Will is to identify:
How you would like your property distributed
Who should serve as the guardian of your minor children
Who will take control over your estate and carry out your wishes
Any strategies to avoid estate taxes

3. Facts… 70% of all Americans do not have a will
50% of Americans with children do not have a will
The top three reasons cited by survey respondents for not having a will: procrastination, a belief that they don't need one, and cost

4. Georgia Law
If you die without a Will, your property will be distributed:
Spouse and children (spouse’s share cannot be less than one-third)
Grandchildren
Parents
Siblings
Nieces and nephews
Grandparents
Uncles and aunts
Cousins

5. South Carolina Law
If you die without a Will (Intestate), your property will be distributed to your:
Spouse
Spouse and Issue (spouse’s share cannot be less than one-half)
Children and Grandchildren
Parents
Siblings, Nieces and Nephews
Grandparents
Uncles and Aunts, Cousins
Great Grandparents, Great Uncles and Aunts
State of South Carolina

6. Other Estate Planning Documents
Financial Power of Attorney
Living Will/Healthcare POA
Health Insurance Portability and Accountability Act (HIPAA) Release
Trusts
Each spouse should have his/her own set of documents

7. Non-Probate Property Joint Tenants with Right of Survivorship
Joint Accounts
Transfer on Death
Designated Beneficiaries
Trusts

8. Federal Estate Tax Exclusions
Year in Which
Death Occurs
Amount That Can Be Transferred Free of Federal Estate, Gift, and GST Tax
Highest Estate and
Gift Tax Rates
2016+
$5.45 Million plus Annual
Inflation Increase
40%

9. Exclusion Amount Portability
No estate taxes on transfers to surviving spouse
Exclusion amount is portable so surviving spouse can claim a total exclusion amount of $10 million+

10. Trusts Revocable or Living Trust Special Needs Trust
Testamentary Trust
Irrevocable Life Insurance Trust (ILIT)
Charitable Remainder Trust

11. Revocable or Living Trust
Management of assets
Control over assets
Protection of minor children
Privacy
Will contest potential reduced
Probate avoidance in all states
Will not protect assets from creditors

12. Special Needs Trust
Protects children and beneficiaries with special needs from losing Federal and State assistance and benefits

13. Testamentary Trust Created under a Will
Comes into existence upon the death of the grantor
Used to protect minor children

14. Irrevocable Life Insurance Trust (ILIT)
Face amount of life insurance is included in determining value of estate for estate tax purposes
Removes life insurance from the estate by placing it in a separate and irrevocable trust
Life insurance proceeds provide a fund to pay estate taxes or as wealth replacement for beneficiaries
Life insurance proceeds are income tax and estate tax free
Gift tax rules apply to value of policy transferred and to premiums paid

15. Charitable Remainder Trust
An irrevocable trust that creates two types of beneficiaries: Income recipients and Charitable remainder recipients
Grantor may serve as trustee and can manage assets and change charitable beneficiaries
Transferred assets are removed from the grantor’s estate

16. Charitable Remainder Trust
Along with the CRT, the grantor may create an ILIT to provide wealth replacement for the grantor’s heirs
Life insurance proceeds are income tax and estate tax free

17. Tax Consequences
Revocable or Living Trust usually treated as a pass-through entity for tax purposes
Other types of Trusts are usually treated as separate entities and require a separate Tax ID number

18. Example 1 – Business Owners
Husband (63) and Wife (61) own 2 hardware stores in California and the underlying real estate
Value of business and real estate is $20 million
Potential estate tax liability for heirs is 40% of $9 million or $3,600,000

19. Example 1 - Solution Irrevocable Life Insurance Trust (ILIT)
$10 million Second-to-Die IUL
Premium Finance Loan of $4,426,582 paid by Lender
Interest Charges of $1,468,180 paid by business owners
Loan paid off by IUL Policy in Year 17

20. Example 2 – Business Owners
3 Unrelated Business Owners
What happens if one of the Owners dies?
Will the Deceased Owner’s Family become an Owner?
Will the Surviving Owners need to Pay Off the Estate?

21. Example 2 - Solution
Bylaws, LLC Operating Agreement or Buy-Sell Agreement
Term Insurance or IUL Policy provides source to Pay Off Estate
LTC Insurance for Disabled Owners

22. Maintenance and Updates
Have there been any changes since you created your estate documents?
Have you moved to another state or purchased real estate in another state?
What are the costs to update or to maintain your estate plan?

23. Common Mistakes Not funding the Trust
Not discussing your Estate Plan with your family
Not discussing your medical preferences with your family
Not updating your Estate Plan when there are changes
Not considering a beneficiary with special needs

24. Questions Kim Scouller Attorney at Law Jade Law Offices
Licensed to practice law in Georgia and Kentucky.
Not intended as legal advice.
Please consult a qualified attorney for a specific legal question.
© Jade Law Offices of Kim Scouller, LLC.