Family Training Session Part 2:Family Training Session Part 2:What to Do When a Loved One What to Do When a Loved One

Passes AwayPasses Away

for

Peace of Mind Legacy PlanningPeace of Mind Legacy Planning™ ™ HelpersHelpers

How A Trust WorksHow A Trust Works

After a person passes away the After a person passes away the process of “winding down of process of “winding down of affairs” beginsaffairs” begins

Referred to as “Trust Settlement” Referred to as “Trust Settlement” or “Trust Administration”.or “Trust Administration”.

Things to Do!Things to Do! Do call the law firm immediatelyDo call the law firm immediately Do know where the red and white books are Do know where the red and white books are

locatedlocated Do review the Final Arrangements instructionsDo review the Final Arrangements instructions Do arrange for the immediate care of petsDo arrange for the immediate care of pets Do secure the houseDo secure the house Do schedule a settlement conference with the Do schedule a settlement conference with the

law firm within two weekslaw firm within two weeks Do make a list of questionsDo make a list of questions

Things NOT to Do!Things NOT to Do! Do NOT race to the Do NOT race to the

bank and close bank and close accountsaccounts

Do NOT rollover IRA’s, Do NOT rollover IRA’s, 401(k)’s or other 401(k)’s or other Qualified Retirement Qualified Retirement PlansPlans

Do NOT drive the Do NOT drive the decedent’s automobiledecedent’s automobile

Things NOT to Do!Things NOT to Do! Do NOT remove any Do NOT remove any

household furnishingshousehold furnishings Do NOT pay any bills Do NOT pay any bills

– Ask for a 2-4 week – Ask for a 2-4 week extension on funeral extension on funeral expensesexpenses

Do NOT use the Do NOT use the decedent’s credit decedent’s credit cardscards

Things NOT to Do!Things NOT to Do! Do NOT contact life Do NOT contact life

insurance and annuity insurance and annuity companiescompanies

Do NOT use any power Do NOT use any power of attorneys – they are of attorneys – they are VOID after the death VOID after the death of the maker and of the maker and would therefore would therefore constitute fraud if constitute fraud if utilizedutilized

Settlement Conference: Settlement Conference: AgendaAgenda Bring written list Bring written list

of questionsof questions We will send you a We will send you a

list of documents list of documents to bringto bring

Ethical Guidelines Ethical Guidelines require that we require that we onlyonly meet with meet with the Successor the Successor Trustees and Trustees and Named Named BeneficiariesBeneficiaries

Settlement Conference:Settlement Conference:AgendaAgenda Overview of how the plan worksOverview of how the plan works Review of Settlement ProcessReview of Settlement Process Discuss possible tax planning Discuss possible tax planning

strategiesstrategies Delegate Tasks – Who is doing whatDelegate Tasks – Who is doing what Establish Time TablesEstablish Time Tables Address Questions & FeesAddress Questions & Fees Sign Engagement LetterSign Engagement Letter

Overview of the Living Overview of the Living TrustTrust

Three main time periodsThree main time periods

Alive and HealthyAlive and Healthy

DisabilityDisability

DemiseDemise

Mary’sLivingTrust

Administrative

Trust

Susan’sProtective

Trust

John’sProtective

Trust

The Administrative TrustThe Administrative Trust

Build an Inventory of Build an Inventory of ALLALL Assets Assets Secure Valuations on all assetsSecure Valuations on all assets Settle Life Insurance, Annuities, Settle Life Insurance, Annuities,

Qualified Retirement PlansQualified Retirement Plans Identify, Negotiate and Pay all Identify, Negotiate and Pay all

final debts and expensesfinal debts and expenses Track IncomeTrack Income

The Administrative TrustThe Administrative Trust

Prepare Final Income Tax ReturnsPrepare Final Income Tax Returns Prepare applicable Estate Tax Prepare applicable Estate Tax

ReturnsReturns Educate BeneficiariesEducate Beneficiaries Asset Transfer ProcessAsset Transfer Process

Administrative TrustAdministrative Trust

Time Time Expectations: Expectations: 3 months to 3 months to 12 months12 months

Periodic Periodic Meetings by in Meetings by in person or by person or by teleconferencteleconferencee

TrusteesTrustees

Article 15 for Married Clients and Article 15 for Married Clients and Article 12 for Single Clients names Article 12 for Single Clients names the Trusteesthe Trustees

Assume complete financial control of Assume complete financial control of trust assets on death of Trustmakertrust assets on death of Trustmaker

Serve subject to instructions and Serve subject to instructions and priorities contained in the trustpriorities contained in the trust

Responsible for Managing AssetsResponsible for Managing Assets

Distribution of AssetsDistribution of Assets

Three Types of DistributionsThree Types of Distributions

““Special Stuff” listSpecial Stuff” list Specific Distributions in Article 7Specific Distributions in Article 7 Percentage Distributions in Article Percentage Distributions in Article

9/129/12

Distribution of AssetsDistribution of Assets

““Special Stuff” Lists:Special Stuff” Lists: Provides a list of special items that are to Provides a list of special items that are to

be distributed before any other assetsbe distributed before any other assets Typically these items have sentimental Typically these items have sentimental

valuevalue Identifies the item and the recipientIdentifies the item and the recipient Red Estate Planning Portfolio behind the Red Estate Planning Portfolio behind the

tab called “Personal Effects”tab called “Personal Effects” Not all clients complete a Special Stuff ListNot all clients complete a Special Stuff List

DistributionsDistributions

Specific Distributions:Specific Distributions: Listed in Article 7 ScheduleListed in Article 7 Schedule Can be used for distributing Can be used for distributing

specific sums of cash, investment specific sums of cash, investment accounts, automobiles, etc.accounts, automobiles, etc.

DistributionsDistributions

Percentage DistributionsPercentage Distributions All remaining trust assets not All remaining trust assets not

previously distributed are divided previously distributed are divided amongst the beneficiaries in amongst the beneficiaries in Article 12/9Article 12/9

Article 12/9 provides a Article 12/9 provides a beneficiary’s inheritance is to be beneficiary’s inheritance is to be divided into a separate trust divided into a separate trust share for their benefitshare for their benefit

Trust ProtectionsTrust Protections

Catastrophic Illness ProtectionCatastrophic Illness Protection Catastrophic Creditor Protection Catastrophic Creditor Protection

(i.e. School Bus Trusts)(i.e. School Bus Trusts) Divorce ProtectionDivorce Protection Bloodline ProtectionBloodline Protection Values PromotionValues Promotion

Trust ProtectionsTrust Protections

A “Protective Trust” only works if two A “Protective Trust” only works if two requirements are met:requirements are met:

The Beneficiary is NOT the sole The Beneficiary is NOT the sole Trustee (Note this does not mean the Trustee (Note this does not mean the Beneficiary does not control the Beneficiary does not control the trust!)trust!)

The Beneficiary is educated as to The Beneficiary is educated as to what actions will destroy the Trust what actions will destroy the Trust ProtectionsProtections

Helper HandbookHelper Handbook

Trust Settlement Trust Settlement Instructions Tab contains Instructions Tab contains more detailed informationmore detailed information

FAQ’s (Frequently Asked FAQ’s (Frequently Asked Questions) provide a short Questions) provide a short summary of common summary of common questions and answersquestions and answers

Helper HandbookHelper Handbook

Resources – provide Resources – provide local resources to local resources to consultconsult

We are here to help We are here to help beyond the “Legal” beyond the “Legal” issuesissues

Glossary – defines Glossary – defines various termsvarious terms

Closing CommentsClosing Comments

We recommend you attend this We recommend you attend this presentation again within 5 yearspresentation again within 5 years

New Client Orientation New Client Orientation Workshops are offered through Workshops are offered through out the year – Please contact us out the year – Please contact us for more information!for more information!

Thank you for coming!Thank you for coming!