Family Wealth Planning
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1 Family Wealth Planning FWP is an extremely broad topic. It has been defined as the accumulation, conservation, and distribution of wealth. The practice of estate planning is broader than this definition and reaches the personal life of the client, the client’s family and business.
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Family Wealth Planning. FWP is an extremely broad topic. It has been defined as the accumulation, conservation, and distribution of wealth. The practice of estate planning is broader than this definition and reaches the personal life of the client, the client’s family and business. - PowerPoint PPT Presentation
Transcript of Family Wealth Planning
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Family Wealth Planning
FWP is an extremely broad topic. It has been defined as the accumulation, conservation, and distribution of wealth. The practice of estate planning is broader than this definition and reaches the personal life of the client, the client’s family and business.
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Family Wealth Planning
Personal Profile
1. Assets
2. Liabilities
3. Responsibilities
4. Personal choices
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Family Wealth Planning
Form of Property Ownership
1. Individual
2. Tenancy in Common
3. Joint Tenancy (JTROS)
4. Tenancy by the Entireties
5. Community Property
6. Living Trust
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Family Wealth Planning
Living TrustA will substitute in which an individual transfers assets into a revocable trust and usually remains as trustee and beneficiary. At death the assets are managed/ distributed according to the terms of the trust. There are NO greater tax benefits than those available using a tax planned will. Assets in a living trust are not subject to probate. Probate is usually a simple process in PA and NJ
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Family Wealth Planning
Living TrustAssets owned by TrustRevocableGrantor is Trustee and BeneficiarySuccessor TrusteeFuture IncompetencyPrivacy
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Family Wealth Planning
Living Trust (cont.)Avoid ProbateNo Automatic Tax Savings
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Family Wealth Planning
Effect of Contract1. Retirement plans and IRAs - N.B.
Qualified retirement plan and conventional IRA assets are subject to income taxes in addition to death taxes.
2. Life insurance3. Business and marital agreements
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Family Wealth Planning
Wills and related issues
1. Intestacy
2. Identification of instrument, testator (rix) and domicile
3. Debts and taxes
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Family Wealth Planning
Wills and related issues
4. Property distribution
a. Form of ownership
b. Contracts
c. Miscellaneous personal property
d. Specific bequests
e. Residuary
f. Elective share
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Family Wealth Planning
1. Per Stirpes By right of representation Takes ancestors’ share
2. Per Capita By head Take in own right
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Family Wealth Planning
Parent
Child 1 Child 2
Grandchild 1 Grandchild 3Grandchild 2
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Family Wealth Planning
Wills and related issues
5. Protection of dependents and others
a. Guardianship (choice of guardian)
b. Protective trusts (choice of trustee)
c. Life insurance
d. Spendthrift provision
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Family Wealth Planning
Pot Trust (3 children)• Inc. & Prin. for benefit of all• When youngest reaches 23 split into three shares / trusts• Issue of advancements• Terms of shares / trusts
v.
1/31/3 1/3
Separate Trusts / Shares
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Family Wealth Planning
Wills and related issues
6. Personal representative – executor (rix)
7. Fiduciary powers and duties
8. Accounting and bonding
9. Legal formalities
10. Self-proving
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Estate Administration
Decedent’s Personal Representative executor/executrix
letters testamentary administrator/administratrix
letters of administration CTA (cum testimonium annexum) trustee of living trust
Trust already owns the assetsNot really probate, but trust administration
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Estate Administration
Collect Assets Preserve Assets Pay Debts, Expenses and Taxes Distribute Estate
