ADVOCIS BANFF SCHOOL --- August 2006

PRACTICAL ESTATE PLANNING ISSUES

Peter Rudin, CA, CLU

To Be Addressed---

Definitions, Etc. Beneficiaries (Who, Why, How Long) Objectives (Approach, Scope, Duration and

Strategies) Executors (Choices, Implications) Wills (From KISS to Complex) Powers of Attorney (Who, What, Etc…) Personal Directives, Etc. Oh Yes, About Insurance…

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I. Definitions, Etc: “What is Estate Planning?”

Estate planning can be described as the process by which individuals arrange for the ultimate transfer of their property so as to satisfy their personal objectives while trying to minimize consequent taxes and other costs. For individuals with simple estates, this may involve little more than some discussions followed by the execution of a will, powers of attorney and acquiring some life insurance. For business owners and other high net worth clients, it can be a lengthy process involving their family members, business associates and professional advisors complete with sophisticated tax planning and a wide array of complex legal documents.

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The process can be costly and time-consuming, but can provide great benefits to one’s family and to the community. Financial advisors often have a vital role to play in ensuring that estate planning is not only considered but actually carried out.

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Please see the new Estate Planning section in the Advocis Best Practices Manual for more detailed information about the Financial Advisor’s role in estate planning, the role of other professionals, and the process itself.

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II. The Beneficiaries:

(Those who benefit from the individual’s estate)

WHO IS TO BENEFIT –– Spouse – Children– Parents– Other relations– Other dependants– Charities & Institutions– Friends

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WHY THEY ARE TO BENEFIT –

– Need– Deserving– Conscience Requires– Somebody Has To …

STATUS / ENDURANCE OF BEQUEST

– Permanent & Outright– Benefit for a Period of Time– Contingent

--- PERIODIC REEVALUATION - Changing views

– How often to revisit?

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III. Testator’s Objectives

APPROACH ---

Explicit vs. Default

SCOPE ---

1. Goals for: Family & Friends Specific Community or Group Society as a Whole

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2. Duration:

– Focus on the Next Generation– Focus on the Current/Prior Generation– Long term (Multi-Generational) Focus

3. Strategies

– Efficient Probate– Tax Minimization– Customize and Systemize– KISS Principle

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IV. Executor Selection

– Obvious/Default Choices (Family, Friends and Advisors)– Issues to Consider (Competency, Willingness, Jurisdiction,

Conflicts, Numbers)– Alternates and Substitutes (Needed)– Better Choices – Impact on Objectives– Periodic review

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V. Wills

– Simple Vs. Effective & Detailed– Who is Drafting / Executing– It Takes Time…– Periodic Updating– Cost/Benefit

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VI. Powers of Attorney

– Who? (Competency, Willingness, Conflicts)– How Many? (One vs. Plural; Together or Split Duties)– Alternates (Needed)– Powers– Enduring Nature

--- Periodic Reevaluation

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VII. Personal Directives, Etc.

– Needed, Wanted or Not???– Who? (Competency, Willingness, Conflicts, Numbers)– How Many?– Alternates– Powers vs. Instructions

– Again, Periodic Reevaluation

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VIII. Oh Yes, About the Insurance…

– Family Liquidity Needs / Wants– Addressing Taxation– Bequests– Timing --- The Beauty of Insurance

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VIII. Oh Yes, About the Insurance…

– Confidentiality / Security– Joint Last Coverage– Beneficiary Designations– Policy Ownership

….Copyright RUDCO Insurance Inc. (2006)