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Estate and Trust info.
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CERTIFIED ESTATE AND TRUST SPECIALIST™
CES™
PROGRAM OUTLINE
OVERVIEW
The CES™ program lays a solid foundation and explains core concepts before tackling
sophisticated estate planning techniques. Materials that have been written with an eye toward
real-world situations. The content is both practical and simple to follow, unlike similar business
and law school courses. The building blocks of an effective estate plan are a will and one or
more trusts. Our estate planning education materials are written so the client can also understand
them, enhancing your services as a financial professional.
MODULE I:
INTRODUCTION TO ESTATE
PLANNING
GOALS, OBJECTIVES AND RISKS
Estate Planning Defined
Who Needs Estate Planning
Why the Interest in Estate Planning
Tools for Wealth Protection
THE ESTATE PLANNING PROCESS
Six Basic Steps
Establishing a Client/Planner Relationship
Collecting Client Information
Defining Transfer Objectives
THE ESTATE PLANNING TEAM
Unauthorized Practice of Law
ESTATE PLANNING DOCUMENTS
WILLS
Intestacy
Advantages of Wills
Limitations of Wills
Types of Wills
Legal Capacity to Execute a Will
Clauses in Wills
Sample Wills
Revoking and Changing Wills
Side Instruction Letters
Statutes Affecting Wills
Avoiding Will Contests
POWERS OF ATTORNEY
General and Limited Power of Attorney
Durable Feature / Springing Power
Power of Attorney for Property
Disadvantages of a Power of Attorney
DIRECTIVES REGARDING HEALTH CARE
Durable Power of Attorney for Health Care
Living Wills/Advance Medical Directives
Do Not Resuscitate Order (DNRs)
MODULE II:
TYPES OF PROPERTY INTEREST
PROPERTY INTERESTS
Fee Simple
Tenancy in Common
Joint Tenancy with Rights of Survivorship
Tenancy by the Entirety
Community & Separate Property in
Community Regimes
OTHER OWNERSHIP TOPICS
Partial Ownership
Legal Ownership vs. Equitable Ownership
THE PROBATE PROCESS INTRODUCTION
Testate vs. Intestate Succession
Transfer of Assets
Advantages of Probate
Disadvantages of the Probate Process
Nontraditional Relationships
THE PROBATE PROCESS
State Probate Laws
Beginning the Probate Process: Producing a
Will
The Probate Court
Personal Representatives: Executors and
Administrators
Managing and Distributing the Estate
Potential Distribution Problems
PROPERTY PASSING THROUGH PROBATE
PROPERTY PASSING OUTSIDE OF
PROBATE
State Contract Laws
State Titling Laws
State Trust Laws
GIFT TAX THE GIFT TAX SYSTEM
Historical Background and Purpose
Estate and Gift Tax Reform
CHARACTERISTICS OF A GIFT
Parties
Definition and Elements of a Gift
Consideration and Valuation
Types of Gifts
EXCLUSIONS & EXEMPTIONS
The Annual Exclusion
Split Gift Elections
Gifts of Joint and Community Property
Applicable Credits
GIFTS OF A PRESENT & FUTURE INTEREST
Present and Future Interest Gifts
The Crumney Provision
The 5/5 Lapse Rule
TRANSFERS RESULTING IN NO GIFT TAX
Transfers to Political Organizations
Qualified Transfers
Payments for Support
Payments Between Divorcing Spouses
Transfers within a Business Setting
Gifts to Spouses
Charitable Gifts
THE GIFT TAX RETURN
Form 709
Statute of Limitations
Calculation
INCOME TAX ISSUES
Donee’s Adjusted Basis
Exceptions
STRATEGIES
Achieving Client Goals with Direct Gift
Gifts of Appreciating Property
Gifts to Spouses and Minors
Single and MultiParty Gift Strategies
MODULE III:
ESTATE TAX
THE GROSS ESTATE
Decedent Owned Property
Dower Interests
Gifts Within Three Years of Death
Transfers with Retained Life Estate
Transfers Taking Effect at Death
Revocable Transfers
Annuities
Joint Interests
Powers of Appointment
Life Insurance Proceeds
Previously Allowed Marital Deduction
VALUATION OF ASSETS AT DEATH
Hard-to-Value Assets
Financial Securities
Life Insurance
Alternate Valuation Date
DETERMINING TAXABLE ESTATE
The Charitable Deduction
Unlimited Marital Deduction
DETERMINING TENTATIVE TAX
Post-1976 Taxable Gifts
Tentative Tax Base
CREDITS FROM TENTATIVE TAX
Applicable Estate Tax Credit
Credit for Tax Paid on Prior Transfers
Foreign Death Tax Credit
PAYING AND REPORTING ESTATE TAXES
Filing Requirements
Penalties
ADJUSTED BASIS TO HEIRS
IRD Assets
Heir Donor
Surviving Owner
Community Property
Rules for Years Beginning After 2009
LIFE & DEATH TRANSFERS
INTRODUCTION
Lifetime Transfers
ARM’S-LENGTH TRANSACTIONS
Sale
Installment Sale
Exchange
TRANSFERS TO LOVED ONES
Transfers Not Subject to Gift Tax
Gifts Outright and in Trust
Partial Sale-Gift Transactions
Full Consideration Transfers/Sales
Family Limited Partnerships (FLP)
TRANSFERS AT DEATH
Transfers by Will
Property Transferred at Death by Contract
Transfers at Death by Operation of Law
Charitable Transfers at Death
MODULE IV:
TRUSTS
DEFINITIONS AND PARTIES
Grantor (Trustor)
Trustee
Beneficiary
WHY USE A TRUST
Management
Creditor Protection
Split Interests in Property
Avoiding Probate (Living Trust)
Minimizing Taxes
THE RULE AGAINST PERPETUITIES
ACCOUNTING AND INCOME TAXES
Income Taxation
Gift Tax as Applied to Trusts
Inclusion/Exclusion from Gross Estate
TRUST AGREEMENT CLASSIFICATIONS
Revocable and Irrevocable Trusts
Inter Vivos and Testamentary Trusts
Standby and Pourover Trusts
Grantor Trusts
Funded and Unfunded Trusts
Simple/ and Complex Trusts
TRUSTS USED IN ESTATE PLANNING
Life Insurance Trusts (ILITs)
Bypass (Credit Shelter) Trusts
Power of Appointment Trusts
Qualified Terminable Interest Trusts
Grantor Retained Trusts
Qualified Personal Residence Trusts
Tangible Personal Property Trusts
Dynasty and Grantor Trusts
Trusts for Minors
Crumney and Totten Trusts
Charitable and Blind Trusts
CHARITABLE GIVING
INTRODUCTION
Contribution and Taxation Issues
Qualifying Organizations
Types of Charities
CHARITABLE GIFTS DURING LIFE
Gifts of Cash, Services and Property
Contribution Base Limitations
Choosing Adjusted Basis over FMV
Valuation, Record Keeping and Reporting
OTHER OUTRIGHT GIFTS TO CHARITY
Bargain Sales of Property to Charities
Bargain Sales of Appreciated Property
Charitable Gift Annuities
Encumbered Properties
Gifts of Life Insurance to Charities
Group Term Life Insurance
CHARITABLE GIFTS OF A SPLIT INTEREST
Pooled Income Funds
Charitable Remainder Annuity Trust
Charitable Remainder Unitrust
Gift and Remainder Interest Calculation
CRT and Insurance for Wealth Replacement
Charitable Lead Trusts
ADVANCED PLANNING TOPICS
Tangible Property
Community Property
Choosing Between the CRAT or the CRUT
Reformation of Disqualified Split Interests
MODULE V:
UNLIMITED MARITAL DEDUCTION
DEDUCTION DEFINED
The Single Economic Unit
Advantages and Requirements of the UMD
Limitations
UMD QUALIFICATION
Inclusion in Decedent’s Gross Estate
Property Transferred to Surviving Spouse
Terminable Interest Rule
OUTRIGHT SPOUSAL BEQUESTS
Limiting a Direct Transfer
QTIP TRUSTS
Qualifying as a QTIP Trust
Lifetime Transfer Device
Estate Taxes
PLANNING FOR NONCITIZEN SPOUSE
Qualified Domestic Trust
ALTERNATIVES TO QUALIFICATION
Over- and Under-qualification
Bypass Trust
Common Trust Arrangements
Disclaimers
Irrevocable Life Insurance Trusts
LIFE INSURANCE
OBJECTIVE OF LIFE INSURANCE
Protect Income Stream for Beneficiaries
A Source of Funds for Education
Provide Liquidity at Death
Retirement Income
Create or Sustain Family Wealth
TYPES
Term and Whole Life Insurance
Universal and Variable Universal Life
First- and Second-to-Die
PARTIES TO A LIFE POLICY
Owner
Insured
Beneficiary
TAX TREATMENT OF LIFE INSURANCE
Transfer for Value
Settlement or Cash Surrender
Policy Dividends and Loans
MECs and 1035 Exchanges
Accelerated Death Benefits
GIFT TAX TREATMENT
Changing Beneficiaries
Outright Gift
Gifts of Premiums
Gifts of Life Insurance
ESTATE TAX TREATMENT OF INSURANCE
Insurance on Someone Else’s Life
Insurance on Insured/Decedent’s Life
Three-Year Look Back Rule
CREATION OF LIFE INSURANCE TRUST
Using Annual Exclusion
Other Objectives
MODULE VI:
POST MORTEM PLANNING
LIQUIDITY NEEDS
Last Medical Costs
Funeral and Administrative Costs
Transition/Adjustment Period Costs
Income, and Estate Taxes
Generation-Skipping Transfer Taxes
LIQUIDITY SOURCES AND IMPLICATIONS
Sale of Assets
Life Insurance
Tax-Advantaged Accounts
Closely Held Businesses
Distribution of Assets
Loans for Taxes and Other Costs
DECEDENT’S FINAL INCOME TAX RETURN
Joint or Separate Final Return
Passive Losses
Expense Elections
ESTATE FIDUCIARY INCOME TAX RETURN
Selection of Tax Year
Expense Elections
Waiver of Executor’s Fees
Income in Respect of Decedent
Distributions and Tax Bracket Analysis
GIFT TAX ISSUES
Election to Split Gifts in Year of Death
POST MORTEM PLANNING
Valuation of Assets
Selection of Valuation Date
Alternate Valuation Date
Installment Payments
Special Use Valuation
QTIP and QDOT Election
Generation-Skipping Transfer Tax Elections
GENERATION TRANSFERS
GENERATION-SKIPPING TRANSFERS
Transferor and Transferee
Qualified Disclaimers
TAXABLE TRANSFERS
Direct Skip
Taxable Termination and Distributions
Filing Requirements and Returns
INTRODUCTION TO DYNASTY TRUSTS
Rule Against Perpetuities
Taxation of Dynasty Trusts
Basic Structure and Types of Dynasty Trusts
Dynasty Trusts and Business Planning
Types and Funding of Dynasty Trusts
Drafting Issues
BASIC ESTATE PLAN
ESTATE PLANNING PROCESS
Determine Client’s Financial Situation
Develop Estate Plan
Implementation and Monitoring
Comprehensive Case Example