Fun.4.PPT.14 - Michael A Dalton | James F Dalton | Joseph M...

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Michael A. Dalton | James F. Dalton | Joseph M. Gillice | Thomas P. Langdon
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Fundamentals of Financial Planning © 2014 Money Education Chapter CHAPTER 14: ESTATE PLANNING
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Fundamentals of Financial Planning © 2014 Money Education Chapter ESTATE PLANNING Is broadly defined as the process of accumulation, management, conservation, and transfer of wealth considering legal, tax, and personal objectives. Goal of estate planning is the effective and efficient transfer of assets. Effective transfer occurs when a person’s assets are transferred to the person or institution intended by that person. Efficient transfer occurs when transfer costs are minimized. 3 14
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Fundamentals of Financial Planning © 2014 Money Education Chapter GOALS AND OBJECTIVES Fulfill client’s property transfer wishes. Minimize transfer taxes. Minimize transfer costs. Maximize net assets to heirs. Provide for guardianship of children or others. Provide needed liquidity at death. Fulfill client’s healthcare decision. An heir is a person who inherits under state law. A legatee is a person named in a will 4 14
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Fundamentals of Financial Planning © 2014 Money Education Chapter ESTATE PLANNING PROCESS Six basic steps: 1. Establish the client/planner relationship. 2. Gather client information, including the client’s current financial statements and establish the client’s transfer objectives, including family and charitable objectives. 3. Determine the client’s financial status. 4. Develop a comprehensive plan of transfers consistent with all information and objectives. 5. Implement the estate plan. 6. Review the estate plan periodically and update the plan when necessary (especially for changes in family situations). 5 14
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Fundamentals of Financial Planning © 2014 Money Education Chapter ESTABLISH THE CLIENT / PLANNER RELATIONSHIP Clients are often reluctant to seek out a planner to plan their estate. Opportunity to discuss the issue of estate planning generally arises when the planner is meeting with the client for financial planning matters. 6 14
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Fundamentals of Financial Planning © 2014 Money Education Chapter COLLECTING CLIENT INFORMATION & DEFINING TRANSFER OBJECTIVES Information about prospective heirs and legatees needs to be collected to properly arrange for any transfer that the client wants to make. 1. Transfer property as desired and minimize estate and transfer taxes to maximize the assets received by heirs. 2. Avoid the probate process. 3. Use lifetime transfers – gifts. 4. Meet liquidity needs at death. 5. Plan for children. 6. Plan for the incapacity of the transferor. 7. Provide for the needs of the transferor’s surviving spouse. 8. Fulfill the transferor’s charitable intentions. 7 14
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Fundamentals of Financial Planning © 2014 Money Education Chapter BASIC DOCUMENTS INCLUDED IN AN ESTATE PLAN Basic documents are: Wills Side letters of instruction Powers of attorney for property Durable powers of attorney for health care Living wills or advance medical directives Do not resuscitate orders 8 14
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  • Spring '14
  • GlennL.Wood
  • Inheritance, Money Education

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