1. Planning for Blended Families
Presented to: Georgia Forum
Presented by: Lewis W. Dymond WealthCounsel, LLC
WealthCounsel, LLC

2. Planning for Beneficiaries
The “Tail” that Should Wag the Dog.
Proper WealthCounseling.
It is a process;
It is not a transaction.
It involves not only your clients;
It involves those your clients love the most;
And it can influence many generations.
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3. Planning for Beneficiaries
Definition of WealthCounseling.
Control my property while I’m alive and well;
Provide for myself and my loved ones if I become incapacitated;
Give what I have;
To whom I want;
The way I want; and
When I want.
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4. Planning for Beneficiaries
Proper WealthCounseling.
Care for loved ones as if you were still there:
With your resources;
With your love;
With your wisdom.
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5. Planning for Beneficiaries
The WealthCounseling Process.
Education.
Design.
Drafting documents.
Implementation.
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6. Planning for Blended Families
Importance of Initial Meeting and Information Gathering are increased dramatically.
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7. Planning for Blended Families
Initial (Education) Meeting.
Who needs to be educated?
Levels of communication.
Black.
Blue.
Red.
Green.
SPIN.
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8. Specifically examines selling high-value products and services.

9. Planning for Blended Families
Variety pack of blended families.
Length of marriage.
Clients’ ages and age differences
His; hers and ours.
Children’s ages.
Children’s ages at time of marriage.
Values of separate and joint property.
Incomes and income capabilities.
Insurance and insurability.
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10. Planning for Blended Families
Who do you represent?
Both parties.
Conflict of interest?
Advise of right to separate counsel.
Waiver.
Conflict may become apparent during planning.
One party.
Other party represented.
Other party not represented.
WealthCounsel, LLC

11. Planning for Blended Families
Information Gathering.
Asset information:
Separate property.
Joint property.
Does titling confirm this?
Existing insurance.
Existing retirement plans.
Existing estate plan.
Existing prenuptial or postnuptial agreements.
Divorce agreement.
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12. Planning for Blended Families
Review of existing prenuptial or postnuptial agreements.
What does it say?
Define separate property.
Define rights at time of death.
Define rights in case of divorce.
What do clients think it says?
Is it valid?
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13. Planning for Blended Families
Validity of existing prenuptial or postnuptial agreements in Georgia.
No Georgia statute enacted with regard to prenuptial agreements.
Georgia has long held that prenuptial agreements settling property rights at death are valid.
Made in contemplation and as inducement to marriage.
Division or transfer only to occur if the parties remain married to death.
Death focused instead of divorce-focused.
Nally v. Nally 74 Ga. 669 (1885).
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14. Planning for Blended Families
Validity of existing prenuptial or postnuptial agreements in Georgia.
Prior to 1982 Georgia courts deemed prenuptial agreements dealing with divorce contrary to public policy.
Scherer v. Scherer, 249 Ga. 635, 292 SE2nd 662 (1982).
Mallen v. Mallen 622 S.E.2d 812 (Ga. 2005).
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15. Planning for Blended Families
Designing, drafting and executing a postnuptial agreement in connection with estate planning.
Need for separate counsel?
If includes what happens in case of divorce?
If only covers property rights at death?
Agreement that asset transfers are for controlling property at death and not in the event marriage terminates other than by death.
WealthCounsel, LLC

16. Planning for Blended Families
The Design Meeting.
The design options for a blended family are far greater than for a first marriage family.
Increases the importance of the initial meeting.
You need to be ready with solutions rather than options.
Family meetings.
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17. Planning for Blended Families
Drafting the Revocable Living Trust.
Individual trusts.
Joint pour-over trust.
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18. Planning for Beneficiaries
Using WealthDocx – Blended Families
Assuming separate distribution plans use individual trusts.
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19. Planning for Beneficiaries
Using WealthDocx – Blended Families
If significant community property use Individual Trusts AND Joint Pour-over Trust
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20. Planning for Beneficiaries
Using WealthDocx – Blended Families If significant community property use Individual Trusts AND Joint Pour-over Trust
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21. DIAGRAM OF TWO GRANTOR ESTATE PLAN WITH SEPARATE LIVING TRUSTS
GRANTORS
ASSETS OF GRANTORS
JOINT REVOCABLE LIVING TRUST
HUSBAND’S
SHARE OF ASSETS
WIFE’S
SHARE OF ASSETS
HUSBAND’S
LIVING TRUST
WIFE’S
LIVING TRUST
HUSBAND’S
ESTATE TAX EXEMPTION AMOUNT
BALANCE OF
HUSBAND’S
ASSETS
HUSBAND’S
FAMILY
TRUST
HUSBAND’S
MARITAL
TRUST
Division into separate share trusts for wife’s descendants
Division into separate share trusts for husband’s descendants

22. Planning for Blended Families
Importance of including statement of the Grantor’s purpose or intent.
Reflect the client’s hopes, fears, dreams and values.
Assistance to the Trustee, even if the beneficiary serves as his or her own Trustee.
It is the client’s trust.
Comment to Uniform Trust Code Section 801
“This section confirms that a primary duty of a trustee is to follow the terms and purposes of the trust and to do so in good faith. Only if the terms of a trust are silent or for some reason invalid on a particular issue does this Code govern the trustee’s duties.”
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23. Planning for Blended Families
Importance of including statement of the Grantor’s purpose or intent.
Drafting Guidelines - Precatory or Directive.
Flexibility.
Asset Protection.
Certainty.
Corporate, family member or beneficiary as Trustee.
WealthCounsel, LLC

24. Planning for Blended Families
Importance of including statement of the Grantor’s purpose or intent.
Drafting Guidelines - Suggestions.
While the guidelines are intended to express the client’s hopes, fears and dreams, the client will need help in drafting their guidelines.
Practice drafting guidelines to cover different situations.
Easier to edit than draft.
Keep your drafted guidelines in mind while in the design phase with client.
WealthCounsel Knowledge Base as a starting point.
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25. Planning for Blended Families
Importance of including statement of the Grantor’s purpose or intent.
Guidelines – WealthCounsel Knowledge Base.
WealthCounsel, LLC

26. Planning for Blended Families
Importance of including statement of the Grantor’s purpose or intent.
Guidelines – WealthCounsel Knowledge Base.
WealthCounsel, LLC

27. Planning for Blended Families
Importance of including statement of the Grantor’s purpose or intent.
Guidelines – WealthCounsel Knowledge Base.
WealthCounsel, LLC

28. Planning for Blended Families
Using the WealthCounsel Knowledge Base.
Contains sample language shared by WealthCounsel principals and members.
Not reviewed, edited or approved by WealthCounsel.
Some of these documents reflect a strong religious influence. WealthCounsel does not promote one set of religious values over other religious or even non-religious values. WealthCounsel welcomes all viewpoints. No matter your religious views, these documents are intended to provide help to all members.
We appreciate you sharing your language.
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29. Planning for Blended Families
Providing for spouse vs. providing for children.
Family dynamics.
RLT formula options.
Life insurance.
Retirement plans.
Gifting trusts.
QPRTs.
WealthCounsel, LLC

30. Planning for Beneficiaries
Using WealthDocx – Blended Families
Providing for the Surviving Spouse – Formula options
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31. Planning for Beneficiaries
Using WealthDocx – Blended Families
Providing for the Surviving Spouse – Formula options
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32. Planning for Beneficiaries
Using WealthDocx – Blended Families
Providing for the Surviving Spouse – Distribution options:
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33. Planning for Beneficiaries
Using WealthDocx – Blended Families
Providing for the Surviving Spouse – Designing the QTIP Trust:
Income only.
Principal distributions?
Consider Total Return (Unitrust) option when selecting income only?
$5K or 5% withdrawal power?
Testamentary Power of Appointment:
None or limited to descendants.
WealthCounsel, LLC

34. Planning for Beneficiaries
Using WealthDocx – Blended Families
Providing for the Surviving Spouse – Designing the Family (Bypass/Credit Shelter) Trust:
Consider straight to residuary beneficiaries?
Income only?
Principal distributions?
Consider Total Return (Unitrust) option when selecting income only?
$5K or 5% withdrawal power?
Testamentary Power of Appointment:
None or limited to descendants.
WealthCounsel, LLC

35. Planning for Beneficiaries
Using WealthDocx – Residuary Beneficiaries
GSTT Provisions.
Residuary Beneficiary options.
Common Trust for descendants.
Trust design for individual residuary beneficiaries.
Distribution of Income (Unitrust or Total Return Trust).
Discretionary Distribution Standards.
Discretionary Guidelines.
Withdrawal Rights and Termination.
Lifetime Power of Appointment.
Testamentary Power of Appointment.
Lapse Options.
Distribution if Deceased.
WealthCounsel, LLC

36. Planning for Beneficiaries
Using WealthDocx – GSTT Provisions.
Explicit or Permissive.
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37. Planning for Beneficiaries
Using WealthDocx – GSTT Provisions
Explicit:
Used if you want to have a different distribution pattern or design for the GSTT Exempt and Non-Exempt property.
Exempt property has a GSTT inclusion ratio = zero.
Non-exempt property has a GSTT inclusion ratio = 1.
WealthCounsel, LLC

38. Planning for Beneficiaries
Using WealthDocx – GSTT Provisions
Permissive:
The Trustee has the authority to divide any trust into Exempt and Non-Exempt shares.
Exempt property has a GSTT inclusion ratio = zero.
Non-exempt property has a GSTT inclusion ration = 1.
Each share will have the same terms.
Use the “hybrid” power of appointment or the limited power of appointment.
If you use the limited power of appointment, the authority to divide a trust into Exempt and Non-Exempt shares, includes the authority to grant the beneficiary a general power of appointment.
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39. Planning for Beneficiaries
* If you include Trust Protector provisions, this power will be given to the Trust
Protector rather than to an Independent Trustee.
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40. Planning for Beneficiaries
Using WealthDocx – Residuary Beneficiary options
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41. Planning for Beneficiaries
Using WealthDocx – Residuary Beneficiary options
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42. Planning for Beneficiaries
Using WealthDocx – Common Trust
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43. Planning for Beneficiaries
Using WealthDocx – Common Trust
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44. Planning for Beneficiaries
Using WealthDocx – Common Trust
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45. Planning for Beneficiaries
Using WealthDocx – Trust Design
Descendants as Current Beneficiaries:
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46. Planning for Beneficiaries
Using WealthDocx – Trust Design
Distributions of Income – Income Options:
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47. Planning for Beneficiaries
Using WealthDocx – Trust Design
Discretionary Distributions:

48. Planning for Beneficiaries
Using WealthDocx – Trust Design
Discretionary (Precatory) Guidelines:
WealthCounsel, LLC

49. Planning for Beneficiaries
Using WealthDocx – Trust Design
Discretionary (Precatory) Guidelines:
WealthCounsel, LLC

50. Planning for Beneficiaries
Using WealthDocx – Trust Design
Withdrawal Rights and Termination:
WealthCounsel, LLC

51. Planning for Beneficiaries
Using WealthDocx – Trust Design
Lifetime Limited Power of Appointment:
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52. Planning for Beneficiaries
Using WealthDocx – Trust Design
Testamentary Power of Appointment:
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53. Planning for Beneficiaries
Using WealthDocx – Trust Design
Lapse Options – What happens to what is left?
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54. Planning for Beneficiaries
Using WealthDocx – Trust Design
Provisions for Afterborn or Adopted Children:
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55. Planning for Beneficiaries
Using WealthDocx – Trust Design
Provisions for Descendants of a Deceased Child:
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56. Planning for Beneficiaries
Using WealthDocx – Trust Design
Distribution if Deceased (Named beneficiaries only):
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57. Planning for Blended Families
Case Study #1:
Tom and Cindy Client, both 65 years of age.
Married in 1977.
Each has one adult son and one joint daughter
Joint assets totaling $10M.
WealthCounsel, LLC

58. Planning for Blended Families
Case Study #2:
Tom and Cindy Client, both 50 years of age.
Married in 1995.
Tom has one adult son and one daughter, 15.
Cindy has one son in college, 20.
Total net worth $1.3M.
WealthCounsel, LLC

59. Planning for Blended Families
Case Study #3:
Tom Client, age 65 and Cindy Client, age 38.
Married in 2005.
Tom has three adult children.
Cindy has one daughter, age 13.
Total net worth $11.6M.
WealthCounsel, LLC

60. Planning for Blended Families
Case Study #4:
Tom Client, age 65 and Cindy Client, age 38.
Married in 2005.
Tom has three adult children.
Cindy has one daughter, age 13.
Tom’s total net worth $60M.
Cindy’s total net worth $2.5M.
WealthCounsel, LLC