Transcript Estate Planning 101 - HAUSWIESNER LAW GROUP PLC

Estate Planning 101
Wills, Trusts and Powers of Attorney
Peter King
HAUSWIESNER KING LLP
February 21, 2007
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Will
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Legal declaration of person's wishes regarding
disposition of his or her property or estate after
death
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Why a will?
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Property Distribution
Reduce Taxes
Name Fiduciaries
Allows executor
 Designates individuals as guardians for children
 Waives security on bond
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Provides for disabled family member
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Trust
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A fiduciary relationship with respect to property,
in which the trustee holds property for the
benefit of another person (the beneficiary).
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Trust Advantages
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Avoid Probate
Funded living trust avoids having assets included in
the grantor’s probate estate
 Avoids delay of probate and reduces expenses
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Privacy
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No public record; avoids publicizing asset value
Easier Management During Incapacity
 Tax Savings
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Trust Types
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Revocable v. Irrevocable
Grantor v. Non-Grantor
Living v. Testamentary
Funded v. Unfunded
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Revocable v. Irrevocable
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Revocable Trust: Settlor retains right to alter,
amend or revoke trust and re-acquire assets
Irrevocable Trust: Settlor cannot revoke but may
retain power to make investment decisions and
control distribution of income and principal to
beneficiaries (Relinquishing all rights may be
better for estate tax purposes)
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Grantor v. Non-Grantor
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Grantor: Settlor retains certain rights or powers
over trust, will be taxed on income generated
Non-Grantor: Settlor gives up any right to
income and most discretionary powers; trust
becomes separate entity for tax purposes
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Living v. Testamentary
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Living
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Trust created during settlor’s lifetime
In Virginia trustee is not required to file annual accountings with the
commissioner of accounts unless required to do so by instrument or
court order
Testamentary
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Trust is created under a testator’s will
Trustee is required to file accountings with commissioner of accounts
unless decedent directs accountings are not required
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Funded v. Unfunded
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Funded: Property from settlor’s estate is placed
in trust
Unfunded: Trust is set up without any property
in it. The property “pours over” from a clause
in the pour-over will
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Common Trusts
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Bypass Trust
Qualified Terminable Interest Property Trust
(QTIP)
Special Needs Trusts
Pet Trust
Spendthrift Trusts
Irrevocable Life Insurance Trusts
Charitable Remainder Trusts
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Trust Alternatives
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Uniform Transfers to Minors Act
Uniform Custodial Trust Act
POD Bank Accounts, Savings Accounts, US
Savings Bonds, TOD Investments
Family Limited Partnerships
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Powers of Attorney
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Durable Power of Attorney
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Principal authorizes agent (attorney-in-fact) to act on his/her
behalf in the event of disability or incapacity
Advanced Medical Directive (Medical Power of
Attorney)
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Specifies desires during a terminal illness where death is
imminent
Allows principal to designate agent to make health care
decisions if incapacitated or disabled
Indicates procedures principal authorizes agent to withhold
and withdraw
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