Before I get going on the presentation, I do want to let you know that we cannot record these or I can’t uh give out the actual presentation or the deck it’s termed. Uh so for compliance per reasons I I’m not able to share that or to record this and we do ask that if someone uh that you cannot record either and distribute these. It has happened in the past. Uh so these cannot be recorded and then redistributed. So, uh, also I do have some other presentations coming up. I have IRA planning coming up in, uh, November 3rd at 6:00 PM here, Central time. Uh, talking about different types of IAS and planning that, what should you be having, uh, or creating or, you know, funding as you get closer to retirement or maybe in retirement, what types of accounts are the best for you moving forward for tax reasons. another presentation, the good, the bad, and the ugly on annuities, talking about different types of annuities, which there are many different types of annuities out there. Uh some uh that I would certainly recommend, some that I probably would not recommend uh in various reasons uh or situations. So, uh again, there are many different types there. Learn a little bit about that. So, I’d love to see you on Wednesday, November 18th on that one. that will be at 2 pm central time for that presentation as well. Uh you do also have some access to some educational resources for uh webinars to see what else is uh coming up uh that you would like to listen to and invest savvy podcast that you have access to to hear and also our AIS website and blog mean Aerys meaning Alliance Retirement and Investment Services. That’s what ARIS stands for there. And you can see check out our website uh see bios of all of us on on this team and see what types of products and services that we do offer which I’ll be talking about that at the end of the presentation as well. So digging into an estate plan. What is an estate plan? It’s a basically it’s a map. It’s a it’s a way to get from where you are now to where you would like to be in retirement um and you know at the end of life basically. So, how are you going to pass things during your lifetime, maybe to other family members, generations, or after death? How do uh things pass um the way you would like them to? It reflects a way that you want your personal and financial affairs to be handled in case of incapacity or death. Who needs an estate plan? Most likely you. So it’s not just for ex you know extreme wealth although that’s even a different level of estate plan that would be needed if you are uh do have uh higher wealth and we’ll talk about some estate uh tax levels of what type of an estate uh you would have to have for additional taxes on there. Uh so without an estate plan you can’t control what happens to your property if you die or become incapacitated. An estate plan makes your wishes clear. Um things need to be documented in an estate plan. Uh many times you might tell a person, I’m going to leave you something, but if it’s not documented, it may not be honored. Uh proper estate planning can preserve assets and provide for loved ones. especially needed if your spouse isn’t comfortable with um estate matters or financial matters. If you have minor children that need to be cared for, that does need to be documented on what the wishes are. And if your net worth exceeds, again, here’s where I was talking about some more extreme wealth. If you have an estate uh of more than 15 million, that’s where the transfer uh tax exclusion uh ends. That’s where uh that is up to 15 million. If you have, let’s say, a $16 million estate, the first 15 million is not subject to estate taxes, but anything above that, that 1 million would be subject to the estimated 40% estate tax. And as I go through this as well, there is a big difference between estate tax and uh income tax of things that would be taxable is if you inherited that you might have to pay income taxes on. But that is very different from the estate tax which is what this is referring to this up to 15 million if you own property in more than one state and financial privacy is a concern. Uh the reason the financial privacy because if an estate does go through probate that is public information. So your estate uh information can be out there of uh when you passed away who beneficiaries may be and uh someone could come out of the woodwork and say hey that person was going to leave me something. Uh you know but it does need of of course to be documented but it’s certainly public information.
basic estate planning concepts, uh planning for incapacity,
uh health care, property management, uh planning for death, uh wills and probate, uh tax basics, lifetime gifting, and life insurance and trusts. Uh these are all big parts of the estate plan. Do you need some of this or do you need all of these? planning for incapacity and can strike anyone at any time. Uh failing to plan uh to plan means you could have uh to appoint a guardian. And one of the things as I go through this uh screen on here is uh if you remember a a case back in the ‘9s, Terry Shybo uh Terry Shybo in the state of Florida was a 26-year-old um went into a coma from a heart uh condition and was incapacitated for a very long time. They she was on a feeding tube and her husband eventually after a long period of time wanted to remove her from the feeding tube and let her go naturally. Her parents got involved and said no, do not do that. And so the courts got involved on who had to say so first. Was it the parents or the spouse of this person? And it went on for I believe it was about 14 years total where the court said remove the feeding tube. Then the higher court said, “No, do not re put the feeding tube back in.” And it was just a big uh legal mess, but planning for incapacity is ultra important. Even if you are younger or older, it’s still something that needs to be planned for. and that 14-year process. I don’t know how much attorneys they uh that cost both sides for the spouse and uh the parents, but uh what a mess because things were not documented. Planning for incapacity for healthc care d uh directives is uh first of all having a will uh durable power of attorney for health care. These are important documents that if you are incapacitated and cannot make decisions on your own uh and who’s going to sign off, if there needs to be surgeries or anything that needs to be done on your behalf, who’s going to be able to sign off legally on these things. And having these documents is vital. It’s very important to have um you know the will with a power of attorney and do not resuscitate orders. My mother-in-law who lived with me and my wife uh for the last three years of her life uh did actually have that in her uh directives that uh if you know if she her heart did stop they can take certain measures CPR but they had a do not intubate and if something and they had a do not resuscitate. Uh so um that is certainly something that is important because uh my wife’s sister who was the healthc care power of attorney is the one who could authorize what measures to take. So your living will puts your instructions in writing uh lets you designate an agent or someone to act on your behalf to make medical decisions or healthc care uh decisions and do not resuscitate. uh directs that uh uh resuscitative measures be withheld or withdrawn. Again, as I go through the presentation, if you do have any questions on any of these slides, please go ahead and type it in in the question and answer the Q&A or the chat box, and I will get to those at the end. Planning for incapacity property management tools. So, joint ownership, power of attorney for financial, this is different than power of attorney for healthcare. I’ve seen that situation where someone had come in and uh to uh to actually it was a bank that I was working at and said uh his mother was in the hospital. I have power of attorney. I need to help her pay her bills. Who do I speak to or how do what do I do with this power of attorney? And it turned out he had the healthc care power of attorney not the financial power of attorney. So it’s very important to know which documents are for health care or for property uh or financial. But uh joint ownership first is something that you would put to have joint people on your account. Maybe it’s a spouse, maybe it’s adult children or a another trusted adult that can uh have access to your funds. Uh and if they are joint ownership, they do have 100% access to your assets on whatever they are joint on. So hopefully it is a trusted person that uh has access but they can easily pay bills for you, do any financial transactions uh of accounts that they have access to. Durable power of attorney is they don’t have uh full access but they do have uh you know they can actually make withdrawals on your behalf. They can write checks on your behalf if they do have power of attorney. a living trust. Uh a trust might be something that is important. A trust uh is what you would be what’s called the trustee on your trust. If you have um typically what you would name is if you pass away or are incapacitated in your trust documents, you would pre-name a successor trustee who would take over of all the assets that are in that trust. they can act on whether you are living but incapacitated or if you pass away they automatically become the trustee and would have access to all of those assets. What happens if you die without an estate plan? Some property passes automatically if you do have joint ownership or if you have beneficiaries designated on accounts like IAS, other retirement, life insurance, uh anything, you know, if you have a savings or checking account here at Alliant, we highly recommend that you have either joint owners or beneficiaries named on each of your accounts that you have. Whether you have savings or CDs or IAS, make sure you have beneficiaries named on all of those. Not just uh you can’t just name one beneficiary across the board. You have to name it on your savings and checking. You have to name it separately for your IRA. And if you open up CDs, you have to add beneficiaries on those as well. Uh so it’s very important to know what you have, what types of accounts do you have and are there beneficiaries named on these. So if you have um you know it you know automatically passes to if you pass away if you have a joint owner on uh these joint accounts that joint person automatically owns the assets if you do pass away. If you do pass away with uh IAS or anything that has beneficiaries named, there’s a couple of documents needed. Number one, like a death certificate that we would need or a financial institution would need. Uh and sometimes it’s a letter of instruction or some type of beneficiary form to complete to get those assets. And those do pass without going through probate. As long as you have beneficiaries named or joint ownership, these do not go through probate and which is uh what you see on all other property generally passes according to state intestasy laws which is basically going through probate. What happens if you do die without uh an estate plan and it goes through intestasy or uh probate? Intesty laws vary for each state. I went through this with my parents when my father passed away first in 2015. Uh my mother was diagnosed with cancer very soon after within weeks of him passing uh and she passed away in 2016. So they passed away about 15 months apart. And when we found out uh you know that after she passed and we were starting to go through everything uh looking for statements on anything, did she have any credit cards that need to be paid? Uh there was a credit card that she paid off every month but had about a 2250 $250 balance uh that we had to pay. Uh so and some debts need to be paid, you know, if someone passes away. And then you also have to make sure that there’s beneficiaries or how do these things pass. So we did find out from my uh mothers going through everything and we actually saw an attorney that she updated her will after my father passed away. She did update the will but we found out she didn’t get to everything. There was two accounts, two savings accounts, one with the CD um and one uh bank had a CD and a savings, but that was a total of about $80,000 that did not have beneficiaries named or no joint owners. And we also she had her condo in uh Florida. So her condo was valued at about at the time about 220,000. So no beneficiary named on a on a condo. The condo was just in her name. She did take my father’s name off of the condo, but uh she didn’t take any other uh further steps. Again, she was diagnosed with cancer very soon after my my father passed away. So now we have about a $300,000 estate, $220,000 in the condo and 80,000 in the savings and CD. So $300,000 estate goes through probate. So, Florida law is waiting for about six, seven months to pass by. Probate is open. The attorney takes the will again, which was updated even though she instructed in the will that everything is divided by five and goes to the five kids. I’m one of five uh children. And so, that’s all the instruction was there, but a will goes through probate. A will opens up probate. So, we go through all the process on there. And finally, six, seven months later, a judge stamps and says, “Okay, probate is closed. Go ahead and put all the accounts in the five kids’ names.” So, we could put the condo in our names, all five of us. And then we can uh end up closing out the savings and CD that uh that were there and that 80,000 became available. But as we’re going through all this and speaking with the attorney on and off and my sister was the executive of this estate and uh you know just working with this attorney for the six seven months of this probate time. Everything is closed. We got the accounts. We got the condo in our names which we ended up selling. Uh but then we get the bill from the attorney. Little over $9,000 for the for probate. Um and we did most of the work on that. That’s what the uh uh the big part is on that. We did a lot of the leg work on it and uh a little over $9,000 attorney bill. So, how much could we have saved or it could have been saved if uh joint ownership uh even, you know, maybe even on the property? Are the beneficiaries uh making sure everything is in order? Boy, there could be a big difference. Sometimes people need a trust, a trust and wills. And if you go to an attorney, maybe it might be a couple thousand dollar, but it is going to be a lot less than fixing it all later and going through probate. So, sometimes biting the bullet on that. If you do need an attorney and as I end this presentation today coming up in in a little bit that I will put up that survey, please say yes and you and I can have a one-on-one conversation to see what is your situation. Do you need to speak to an attorney? And we’ll certainly go through it first.
So, what happens if you die without an estate? Here’s another example of husband passes away and there’s an account in his name or just some asset in the husband’s name and there’s a spouse and two children. Typically, maybe that uh husband would have said, “Of course, if I pass away, just everything goes to my wife.” But in some state law, it could be that if there is no estate plan or no beneficiaries named that the state going through probate might say 50% goes to the spouse and the other 50% go to the surviving children when his wishes may were not to give the children assets yet. Uh but uh just give everything 100% to his wife. Uh but because there was no directive on there, there could been that state law that says this may have happened. Wills and probate. Again, a will is a cornerstone of the estate plan. Directs how your property will be distributed. Again, that’s what my mother did have. Names an executive, which she did as well. Uh can accomplish other estate planning uh goals, written, signed, and witnessed. Uh most wills must be probated. Again, that’s that long waiting period where again, it’s public information. Someone can come out of the woodwork and say, “Hey, if that person was going to leave me something, of course, there needs to be documentation.” Uh, but if there is, you know, could that delay or even extend that probate period if it is contested? It certainly could. And then now we’re talking more fees, more lawyers, more uh just legal things going through a process. Uh the will is filed with the probate court. Again, when my mother passed away and we see the attorney, he took the will and he filed that with the court and now probate opens and it becomes public record. The executive collects the assets, pays the debts and that’s what again what my sister at the time did. We did file one final tax return for my mother uh when she passed away in 2016. So 2017 before April 15th, we did file her final taxes. Uh typically process lasts several months to a year or longer if it is contested. Pros and cons when we talk about the first one here, time and costs are modest. The cost of the actual probate might be modest in the time. Uh court supervision protects against creditors. So uh if there are is extensive debt um that things can be frozen during the probate period when maybe you can’t get assets yet. Uh so there is protection from the court on those things. Cons uh that can be time consuming especially if it’s a complex estate. Uh title transfer delays. Now we’re talking the fees of attorney fees and things like that. That’s the over 9,000 that we had paid. And then ancillary probate if there’s uh anything ancillary probate maybe if it was done uh maybe created in another state but they live in uh a different state now uh so there could be some uh state issues on that uh depending where a will or um uh you know trusts were created and I do recommend that if you did live in one state let’s say you lived in Illinois which is where I am now if you live in Illinois now, but you moved to, let’s say, Florida and but you did all your documents in Illinois. I would see an attorney in Florida just to make sure everything is uh is okay, up to date, and maybe the term reciprocal. What was done in Illinois would be honored still in Florida, but it would be recommended to at least see somebody on making sure that everything is in order from moving from one state to another.
Uh sorry if I can go back. Uh all right. So and again it is public record wills and probate. Avoiding probate. Can you avoid probate? Yes, you certainly can with an estate plan and making sure that you have beneficiaries named. Uh things that don’t have a beneficiary. Uh a lot of things that come up is what about my house? Can I can I add a beneficiary on a house? Some states you can. Uh you can go into to the county and you can record a deed with a beneficiary. Um check you know you might have to you know do some AI search on that to see what state you are in. If the state allows you to add a beneficiary on a home if it is not how do you how does a house not go through probate then? Maybe it’s creating a trust or adding joint people on your home. Here’s a, you know, an example of if, let’s say, a mother says, I want to add my adult son on my house. Can I do that? Yeah, you can record a deed. Add your son on the house. Uh, certainly something that can be done, but now your son does have access to this house. He is an owner on this house. Um, and there’s also, you know, some of the protection things of what if the son in this example had some legal issue, intentional or not intentional, doesn’t matter, but what if there was some type of legal issue, maybe gotten an accident and is going to be sued for whatever reason? your home is now part of that uh potential asset that could be seized or something. If um if there are uh some legal issues on that because your son is owner on the house, maybe it could be subject. Now, that’s where seeing an attorney would hopefully uh protect a lot of these things. But, uh just know that adding joint people on could give them access to an asset that maybe you don’t want someone else to have an uh uh access to. But yes, certainly the estate uh can avoid probate, making sure you have beneficiaries named, maybe a trust, making sure your wills are updated, uh you know, uh powers of attorney, again, all of these documents. So, own property jointly with rights of survivorship, complete beneficiary forms for all of your accounts, uh and life insurance, uh maybe a potential trust, and start to make gifts if you would like to start gifting money away. uh while you’re living. Some people say, “I wish I could give the money to my kids while I’m alive so I could see them enjoy whatever they’re going to use it for.” That certainly can be, but uh there might be some limits on what you can gift. So, transfer taxes. Um if you start to give money away, there’s a federal gift tax imposed on transfers you make during your life. And then there is a federal estate tax imposed on transfers made after you die. So during your life, federal gift tax after you pass away, it is a federal estate tax. Federal um uh there’s also what they call a generation skipping tax uh that you can also gift to grandchildren and below. So not going directly to your children but maybe to grandchildren.
So, lifetime transfers for the federal gift tax. This is giving while you are still alive. Gift tax applies to transfers made during your life. Now, you can there is an exclusion that you can gift $19,000 per person uh to not be taxed. And so if you are a single person and you want to if you have let’s say three children you can give each of them 19,000 without going through any type of issue for taxes on any for anyone. So you can give that 19,000 per person. If you are married filing joint you can each gift 19,000 per child. So you can give 38,000 to each child uh each year if you wanted to uh up to $15 million. So this uh you can gift this $15 million for a combination of while you are living and after you pass away you can give up to 15 million without going through the estate tax. The 15 million exclusion is the largest it’s ever been. uh transfer on death, federal estate tax. Now, we’re talking after death. Uh estate tax applies to transfers made at death. Generally does not apply to transfers made to your spouse or charity. So, if it’s to your spouse, that is not a taxable event. Even if it’s more than the 15 million, 15 million is excluded from all uh transfers, gifts, and estates combined in 2026. So what that means is that if you gifted while you were alive over your lifetime, if you gifted $5 million and after you passed away, if your estate is under $10 million remaining, that is a total of 15 million. So those are a combination of what you gift during your lifetime and after you pass away, you can gift up to $15 million combined. any portion of exclusion used for gifts uh will be unavailable to the estate.
Uh important consideration for married couples that these are what is called portable. What that means is that each of you can have a $15 million estate. If the husband let’s say in as as an example the husband if let’s say they have two separate estates the husband has 20 million and the wife has 10 million. If the husband passes away his 20 million can go to the wife tax-free even though it exceeds that 15 million because it’s going to the spouse and if the spouse passes away for with an estate of 30 million then it is fine. it it does not go through the estate tax um because there’s you know that portability is a total of $30 million that can be left. There is also the generation skipping tax. Um this is where it goes to grandchildren or below. This is actually an additional 15 million that can be done. uh as I was researching this is that the uh the you know the estate tax and the gifting up to that 15 million the generation skipping has an additional 15 million. If you have questions on that see an attorney you if you have an estate that is going to be subject to some of these uh I would highly recommend speaking with an attorney on that. So, there’s a $15 million for the generation skipping tax uh and or for the exclusion for that. Uh unlike the gift uh tax, this is not portable. Meaning, if you have um you know that you’re going to do that, that $50 million does not carry from husband to wife in that same example. Uh it does not do that for the generation skipping. So, here’s where what estate taxes look like. So going back from 2024, 25, and 26, uh you could see how it’s in increased a little bit. Now we’re at $15 million for the uh for the exclusion. If you have again a $16 million estate, if you are a single person and you leave $16 million, that first $15 million is not taxed. That million above that will be taxed at 40%. even though it could be money that was already taxed. Uh maybe it’s all in savings and it was already money that was earned and taxed already. Uh there’s an additional estate tax if it’s over 15 million. Now, as I said earlier that there is a difference between estate tax and income tax. So what might a beneficiary have to pay in income tax? Uh basically anything that has not been taxed yet. For example, an IRA. Let’s say mom has an IRA. Let’s say it’s $400,000. And an IRA that maybe she’s been doing some required distributions on, taking money out over time, passes away with this $400,000 traditional IRA in this example, and has a son who is a 100% beneficiary. Uh, so that son now inherits this $400,000 traditional IRA. And again, this is money that has never been taxed yet. So it has not been taxed. So the son has to pay tax on that $400,000. But does he have to pay it all at one time? Can he spread it out over a period of time? If that son inherits that, now we’re talking he has 10 years to liquidate that IRA. So say 40,000 plus interested growth over that 10-year period on average is what he would have to uh take out and pay taxes on. So that is based on income tax that would be taxed at the son’s tax bracket. But again that is different than the estate tax. So that’s an example of what might a beneficiary have to pay in income taxes. Lifetime gifting allows you to see the recipient enjoy your gift allows you to uh minimize transfer taxes by taking advantage of the $19,000 annual gift exclusion and that is per person. Removes future appreciation of your uh property. So, if you gift uh you know at you know $19,000 maybe that’s um and they invest that the people that inherit you don’t have to pay taxes on any of that growth because you gifted it away. No step up in basis in your property. So, if you um have not gifted this money uh or if you did gift it, there’s not a step up in the cost basis. Here’s an example of what stepped up cost basis means. If you have a stock, let’s say a brokerage account that is not an IRA, and I’ve seen this example many different times, but here’s an example of let’s say someone had a stock account or a brokerage account with individual stocks in there of stocks that someone owned for years, maybe let’s say like Exxon Mobile or something that’s been around a long time. And let’s say that stock was purchased for $30,000 and it’s still in this brokerage account and it is now worth $150,000. It is appreciated, you know, a lot. If the person sells that stock while living, they will have to pay capital gains tax on from the 30,000 up to that 150,000. If that person passes away and there’s a beneficiary named on that account, the beneficiary owns that stock as if it was purchased at 150,000. So if that beneficiary sells the stock at 150,000 right after death after receiving those that asset, there is no taxes paid. That is stepped up. the cost basis is stepped up from 30,000 up to 150,000 and it is not a taxable event. So again an example of what stepped up basis means lifetime gifting uh transfers uh excluded from the gift tax you can gift 19,000 or if you are married you can each gift so 38,000 per year per person. So again, if you have three children, husband, wife, give three children, $38,000 each per year, they can do it again next year. And every couple years that that $19,000 does increase. I remember when it was 11,000 uh not that long ago, and it’s been just increasing over the years. Uh I do see that there are uh a good number of questions on here. So again, just a reminder, if you have not asked a question yet and you do have one, go ahead and type it in Q&A or the chat box and I will get to those at the end of the presentation. Uh if you’re contributing to a 529 plan, what is a college savings plan and you want to do that uh gift it to someone, you cannot gift it to a child to put it in their college saving plan. you can do directly to the 529 savings plan and you can gift up to 95,000 or 190,000. That is a lifetime amount that you can do. You can’t do that one per year. Um that you can gift 95,000 or 190,000 taxfree. And if you’re also going to uh help with tuition, uh you can pay a school or you know the uh education uh directly, but you can again do not gift directly to the person to pay tuition. You have to pay. And so no gift tax on amounts paid directly to a uh school for tuition and no gift tax on if you are going to help someone pay medical bills. Again, you can’t gift it to someone to pay their medical bills. You can pay the medical bills directly and that is not taxed. Creating a trust, it’s a versatile uh estate planning tool. Uh can protect against incapacity or uh avoids probate. So when you have assets in a trust, one of the terms that they use is what they you might have heard when they call it a living trust. Uh basically what that means is if people can die, the trust can keep on going. When you are a trustee of your own trust and you if you passed away, you would again pre-name successor trustees. So a trust can keep on going and going and you can name an order of successor trustees. Now sometimes uh trust might be dissolved after someone passes away and the successor trustee becomes a trustee sells all the assets and distributes it to the beneficiaries. But sometimes there are cases when a trust would need to remain open. Maybe it’s to spread out payments to beneficiaries over a long period of time. Maybe it’s for special needs purposes of a special needs person that is inheriting something that is going to be spread out over a long period of time. That trust needs to stay there. So successor trustees. Now if the successor trustee passed away, maybe there’s got to be someone else named who would take over after that. So a trust can keep on living even after people die. It can protect against incap incapacity, probate, and minimize taxes. Allows professional management of your assets. Provides safeguards to minor children, elderly parents, and other beneficiaries. Can protect assets from future creditors, and control over the property. What is a trust? It’s a legal entity. Uh parties, uh you would have a trust, a granter, a trustee, a beneficiary. Who are all these people? You and I can certainly have that one-on-one conversation of what’s a what’s a granter? what’s a trustee or all these different things we can certainly go over if we do have this uh one-on-one conversation. Uh there’s a difference between what is called a revocable trust and an irrevocable trust. A revocable trust is probably 99% of the trusts that I see most of the time people are they create a trust. They are their own trustee. They name their kids or family members or charities as beneficiaries and they control it and they can make changes. Revocable meaning they can change things. Uh remove beneficiaries, add beneficiaries. They have all the power to to do that as a trustee. An irrevocable trust actually takes this assets out of their estate. more wealth transfer is used for um in an irrevocable trust. An irrevocable trust, the person who who has the money has to name someone else as the trustee and that trust or trustee would c control the assets for someone, but the money is removed from their estate. Again, most likely for these estate tax purposes of this 15 million that we were talking about, life insurance. So, someone might say, I don’t have any assets. Um, I don’t own a home. I’ve haven’t been able to save for whatever reason. And but if you have a life insurance policy, that is does create an estate. You have something to leave to someone. It can provide needed estate liquidity. life insurance proceeds are included in your estate. So, if you have, let’s say, a $13 million estate of assets and you have a $3 million life insurance policy, that is a $16 million total estate. Now, where that 1 million above that 15 million could be subject to the estate taxes. So, life insurance proceeds are part of that estate. Uh key issues of ownership is a policy. Again, is it revocable? Is it irrevocable? Uh here’s what a a life insurance for in an irrevocable life insurance trust. An eyelet is what that’s referred to is you have an insured. So you the insured, so you’re the person with the assets. Uh you create an irrevocable trust and name someone else as the trustee. Again, you cannot be a trustee of your own irrevocable trust. Uh so you’re going to name trustee and who’s going to get the assets? The beneficiaries. The trustee purchases a life insurance policy for your life. So someone else has to buy this for you, the trustee of the irrevocable trust. And then again, beneficiaries would be named. you can make cash gifts to pay the premiums for this uh for this life insurance. Um beneficiaries could potentially have some access to cash value um in the policy. Uh trustees can use uh cash gifts to pay the premium. So you can gift money to the trust uh trustee of that to pay the premiums for your own uh insurance at death. If you pass away, uh the uh irrevocable life insurance trust, the eyelet receives the proceeds from the insurance policy. Uh proceeds are sub are not subject to estate tax because again it’s outside of your estate. Proceeds distributed according to the terms of the trust. Whoever you name as beneficiaries and beneficiaries receive the proceeds free from estate tax. So, in conclusion, as I go through uh the end here, uh again, I see some questions. I’m going to be taking those in just a moment. I’m going to put up the survey here in just a few moments. But if you if you have not implemented some type of plan, please say yes when I put the survey up and we can at least go through that conversation to see what do we think is needed. Some people will just say, do you think I need a trust based on here’s what I have? Um, or should I just get the make your will powers of attorney? I would always recommend there actually are some online sources that you can do. If you’re a do-it-yourselfer type type of person, there are online sources that you can create um your own uh legal documents over maybe wills, trusts, even powers of attorney. Uh much less of a cost. There would be a slight cost on some of these. Again, you’re not getting the uh the big advice from an attorney. So, so many times that answer might be I think you should talk to an attorney and get this done properly. If you have a complicated estate, I would highly recommend uh you know, speaking with someone. So, are you going through any of these questions? Have you imple implemented a plan? Do you have a valid will? Again, maybe you opened it up or started your will in one state, but you moved to another state. I would certainly recommend that that’s up to date. Are transfer taxes a planning concern for you? Again, over that 15 million, uh, does your overall estate plan reflect your current wishes and circumstances? Life happens, things change, people come into your life, people go out. Uh, some people are passing away before you, uh, babies are born and your beneficiaries might change over time or just your wishes might change. Even if you have a will, a trust, all those documents, uh what if your power of attorney that you named passed away? Do you have someone else named after that? All of these important documents are so important to have. So, as I go through the questions here, I’m going to put up a couple of things here. First of all, I’m going to leave this on the screen if you want to take a picture of it. And there’s a um a trusted will u estate plan. This is kind of a one of these do-it-yourselfer opportunities. Uh if you want to take a picture of this and then we can again if we do have a one-on-one conversation, we can certainly talk about this uh a little bit more. Also going to put up here here’s some of the uh products and services that I offer here. I’m uh I do offer full financial services as a financial adviser here at Alliant. Um sometimes it’s the plan. So you might say, “Here’s what I have. Here’s what I want. Did I save enough? Did I do enough? Am I How much can I spend in retirement? What about inflation? What about how much is my social security going to be? What about if you have a pension from anything? How much can I spend in addition to that? And be assured I’m not going to run out that full financial plan. It is complimentary. We do not charge for this. It certainly then we can go to the next step. If you would like more investment management, we can talk about what uh do you want to be ultra ultra-conservative? Do you want to be more aggressive somewhere in between or a variety of different accounts depending on the different types of assets that you own? I’d be happy to go with uh through all of that with you. Again, if you say yes, I will we can certainly have that conversation. Uh here’s my information up on the screen as I go through questions. I’m going to leave this right here. Uh, if you would like to, if you have your phone handy, you can put your camera on, hover it over that QR code, and if you do want to set up a time, whether it’s right now, uh, you can hover over, click on that little yellow thing that pops up, and you can have access to my calendar, and you can schedule that appointment actually right now if you so choose. So, I’m going to go through the questions here, and I am going to put up the survey here right now. So, you should hopefully see that up on your screen. Uh, so check yes, not at this time or no on here. And hopefully, again, you and I will have a one-on-one conversation. So, I’m going to go through the questions here. So, and might not be in the order uh exactly, but I’ll try to get through all of these. Uh, what are um what are the tax ramifications on a transfer on death for beneficiaries? Uh, so depends on the type of an account. um for taxes if it is a savings checking CDs where you have money in a bank or a credit union and you’re going to um if you passed away that is money that’s already been taxed throughout the years. All the interest has been you receive a 1099 those the principal balance has already been taxed. So, the only thing that’s going to be subject is when they when your beneficiaries file your final tax return and then those taxes are paid and your estate. Um, the things that are going to be taxable to the beneficiaries are things like IAS, traditional IAS, 401ks. The things that are taxable to you upon withdrawals will be also taxable to the beneficiaries. That’s the main things that are going to be taxable to beneficiaries. But just think if you have savings, checking, CDs, those types of things. Um, not going to be the principal is not going to be taxed unless it’s over 15 million for the estate. Then there certainly could be the estate taxes. But as far as income taxes are concerned, very minimal or no uh taxes on some of these. Uh remember the the home. If someone inherits your home, again, remember that stepped up basis that we me my brother uh brothers and sister got an appraisal on my mom’s condo for 220,000. We got that for even though she bought it initially at 130,000ish or so. And we did not have to pay any capital gains because we sold it for what we bought uh what the appraisal was. So, we did not have a taxable event on selling the property. uh if uh there is a living revocable trust do the assets go into that which is uh not probated and then the personal items go into the will? I have heard uh that the probate can be avoided. So yes, if you create a trust, you have to put those accounts in the trust or retitle. So, if someone has, let’s say, $100,000 savings here at the credit union and they create a trust. So, they go to an attorney, they have a trust, and they uh call us and say, “Hey, I have this trust. I have this personal account. We’re going to add or create a trust savings account, and then we would transfer that 100,000 to the trust.” Uh, if you pass away, your trust says who the beneficiaries are, and that will avoid probate. Uh anything else if you don’t have a trust anything everything else needs to have beneficiaries named. Um so if you have any personal items that you just said it uh that would go into the will. So personal items might mean what about the car? Car could be um you know especially if it’s an expensive car could potentially be probated uh if there’s no beneficiary or other person on the car. Um, what about artwork? What about things hanging on the wall? What about jewelry? All those things would be in the will. Um, things that don’t have account numbers basically, uh, would go through the will and typically are not probated. I mean, they’re not going to probate, you know, it’s not going to go in and start digging through the drawers and look for any, you know, necklaces or rings or anything like that. But, uh, but personal items, um, would be in the will. And I highly recommend documenting. I’ve heard people talking about like there’s, you know, little things, knick-knacks on the table and if you lift it up, there’s a one of the kids’ names is under there. They’re already claiming it even while mom and dad are still alive. So, um, but document on who gets what and typically in the will. Uh, do you work with people in Wisconsin or just Illinois? I am licensed probably in about uh at least half of the states, about 25 states I am personally licensed in, and Wisconsin is one of those. So yes, I do. Uh is TOD uh uh transfer on death on house taxed? Again, that is that stepped up cost basis. Hopefully you got that out of that even maybe after you type that question in. Uh but with the stepped up basis, it is not taxed. There is a stepped up cost basis on the property on that house. Uh let’s see. My husband is 42 and refuses to consider getting a will uh due to his age despite me bringing it up several times. We don’t have a prenup. What can I do to protect your myself? Um well, you can certainly do these things yourself and I would highly recommend doing something. Um but uh with the prenup situation, maybe there’s one of you has more assets than the other. Uh so but uh even at age 42 again that Terry Shyo situation is it rare? Yes. Is it possible that it could something medically could happen? Absolutely. Uh so but at least you know a will powers of attorney those are cheap and not too too expensive. You can do those yourself even. Um but uh at least having some of those whether it’s trust and beneficiaries and extensive estate things that might be a harder issue for you getting him to do that. But uh um but having a will and powers of attorney um we got those when my kids were very young and uh we got those when we were going on a long trip and you know it was one of our first big trips without kids and what if something happens to us? So we before that trip we went to an attorney and did our will and uh powers of attorney. Uh we didn’t have much assets way back then but uh uh but we made sure that things were um in place for that. So even and we were probably around that age uh maybe a little bit younger even. Um so but uh protect yourself and at least start looking at things that you specifically own. Of course, you can’t make him do something. Uh, but, uh, at least do these things for yourself or at least see if you can get if it’s a if it’s conversation that you and I would like to have, I would if he’s involved or would like to at least talk about that, maybe we could talk about some of the basic estate planning things. Uh, I have a trust and will made in Arizona but moved to Illinois. Do I need to update and redo in Illinois? I would recommend speaking to an attorney about that. Um I can’t guarantee that. Yes, it you absolutely have to make changes in that but uh it certainly with legal documents I would have someone look at that for sure. Uh what is the cost for a consultation with you? Zero. Um you know now we do some like I said some investment management and certainly some things um that might have some you know fees attached to it. Not everything. Some of them do. Many things I do don’t have fees. But the consultation, the initial complimentary. If you want to do the full retirement financial plan, which is very comprehensive, you’re not going to pay a dime for that either. Uh are the online trust and will companies uh worth it? Uh such as uh trustandwill.com, which cost roughly 500. Attorneys are much more expensive. So they can be worth it if you do not have a complicated estate and you just need the basic documents even when you go to an attorney. Here’s where I know many documents are a template. You know, I wish to leave blank blank, you know, you know, things like that. It’s just filling in the blanks, which you can certainly do. Uh if it’s not complicated, you can absolutely use one of the online sources for those and they can be worth it. Some of them might be a couple hundred bucks. Some of them might have an ongoing uh and I’ve heard a hundredish dollars a year for document storage. So even if you create it up front, it’s it’s all e documents uh you know electronic documents. So sometimes those are all kind of still available through the site and you will pay a an annual fee to keep that up. Nominal call it a hundred bucks a year but very so much so it can be worth it. Uh what is your fee? Do you operate on a flat fee or for percent of investable assets? Um to do the plan, nothing. You’re not going to pay for anything. If I do certain things, let’s say someone just wants a guaranteed interest rate for a period of time, I don’t charge a dime for that either. You’re not going to pay a fee. Now if we have like an advisory account that has uh stock bond ETFs and things that are kind of bought sold bought sold there could be a percentage call it a oneish one plus or minus uh of that uh p of what we have invested with you not of your total assets just what’sever in that advisory account you will pay that oneish percent um on that one of the things that I do not do which is available some but I’m choosing not to do is if you have assets somewhere else and you say Joe we want to pay you um you know an annual fee just to tell us what to do with the stuff that’s over there somewhere else I do not do that I can do that but I choose not to um you know just pay a you know receive a fee for assets that I don’t have access to. Um, so but if it’s an advisory account, if you have, let’s say, a $250,000 uh IRA that you want to transfer over and put it in stock bond, you know, ETFs, things like that, uh, that I am certainly managing. If it’s that 1ish percent, uh, then that’s what that fee would be just based on that account. Uh, what percent uh, or what uh, what parent on Medicare? I don’t know what that means. Um, I just see what parent on Medicare. Um, if you are still on if you maybe you type something else in there. I’m still scrolling. Uh, do you work with people in Wisconsin? Yes. Uh, what should all of the paperwork uh be stored? Example, at our home uh deposit box at a bank uh with a family member. Um, that’s a good very good question on that. I’ve seen, you know, uh, you know, safety deposit boxes at banks. if you have some type of uh we have a kind of like a fireproof box that we have documents in um at the at the house. So, yes. Um but to family members or beneficiaries or successor trustees, if you have a trust and there’s trust documents, uh having a copy to the successor trustee is not a bad idea or at least access for that successor trustee to find these documents if you did pass away. um somewhere where other people know where these are. And I know many times there’s privacy issues. I’ve talked to many different clients where they say my kids have no idea what I have uh and I don’t want them to know yet. So sometimes, you know, giving access to these documents might disclose dollar amounts and things like that that you don’t want. But at least if you passed away, do they have access to those documents then to help figure these things out? but they can be stored anywhere. But safety deposit box is not a bad thing. Um, as long as you can get to those uh pretty quickly. What if something happens and you don’t have a power of attorney for healthc care um and someone goes in the hospital over the weekend and you can’t get to the bank uh to get to that safety deposit box. So maybe copies at least uh at home as well. Uh let’s see if there is I had one parent who passed away. uh he was on uh Medicaid. He passed away in 2021. Mom is alive. Uh what are her options? She’s also on Medicaid. So I’m assuming on Medicaid is that they have limited or minimal assets um if anything. So um I have your name and your information here. So if uh one parent passed away and the other is on Medicaid now, do you have powers of attorney? Do you have those things? Um, I’ll email you separately on that. Maybe we could if we’re not going to chat, maybe we can at least email back and forth on on that. Uh, what happens to their house? Um, they have uh paid it off. So, if they are on Medicaid, do they still does uh is the house still owned? Um, or did they have to, you know, are they in a Medicaid situ? Um, so yeah, I have many questions on that actually on what needs to be done with Medicaid cuz I know typically if there’s a spousal situation or if it’s just one person on Medicaid on what assets they can own to be on Medicaid and did you go through an estate attorney on maybe, you know, starting to gift away other assets and things like that. So, I do have some other questions for you on that that I will certainly email you. Um, I think that’s all the questions. Uh, wait, uh, there’s one I put my put on my calendar to make an appointment with you in March. Uh, thank you. Okay, so yep, I’ll speak to you in March. And that’s it. That’s all the questions that I have. Thank you all so much for your time and attention, and I will hopefully be speaking with you very soon. Thanks. Have a great rest of the day.