Money Matters Wed May 1, 2019 8:45-9:45, Trusts and Estates

MONEY MATTERS Wed May 1, 2019, 8:45-9:45 at the DCA will focus on Trusts and Estates 2nd Floor

Gary Banks and Tom Igoe will lead a discussion based on Leonard Leader’s Estate Planning presentation at the DCA (April 10). Come join us and gain some more insights. Bring your thoughts and experiences.

“Money Matters”: Trusts & Estates Discussion, May 1, 2019

You need an up-to-date will and estate plan otherwise:

Your estate will follow the default rules in CT. So you do have a plan – but not necessarily the one you want.
If you don’t appoint Executor, Guardians and Trustees, the Court will.
Money can bring out the worst in people. I’m sure some people look down, or up, at their heirs fighting over their estate and are appalled. There are cases where siblings never speak to each other again because of a dispute over what is fair or who was promised what.
People and Things that you care about may not be handled as you wish.
Your estate might pay more tax than necessary.
Must be up-to-date as laws, assets, and family needs change. Minors grow up, you and your family’s health changes, marriage/divorce, behavior, …
Privacy

Probate

Can’t be avoided entirely in CT
Revocable Trusts minimize what has to go through probate.
Estate pays fees based on total estate. $5,615 + .5% on assets in excess of $2,000,000. Not just the assets going through probate.
There can be on-going fees and reporting requirements for any trust created by a will.
But it’s best to have the probate courts do as little as possible.

Trusts and Taxes

Minimize Federal taxes. The Federal deduction is portable. That is, if you die your spouse can use both her and your Federal Estate Tax Exemption of $11.4M. This applies even if you have no will.
CT Estate taxes. CT’s estate tax exemption is $3.6M. But if you die with a tax plan, your spouse will lose your exemption. She will still have her own. Your missed exemption will be in her estate and taxed at 12% or $432,000!
To take advantage of your state tax deduction your spouse needs to “disclaim” the $3.6M into a Disclaimer Trust.
Family Trusts
Generation Skipping Trusts

Non-Tax reasons for Estate Planning

Asset protection. Suits, divorces, destructive behavior, …
Protection for descendants. In case of remarriage assets go to your descendents.
Special needs.
Special assets.
Charity

Types of Trusts:

Revocable Trust. First line trust. Better to have assets in the trust than create it in your will to avoid probate. Can receive income, invest as you see fit, change at any time.
Disclaimer Trust. Surviving spouse “disclaims” some assets to preserve CT’s exemption. Surviving spouse has 9 months to execute. Spouse still get benefits of the trust.
Marital Trust Plan. Like a Disclaimer Trust but pre-defined how it will be executed.
Generation Skipping Trusts.
- Your children get interest and some principle from the trust but they don’t legally own the trust.
- Protected from divorce, destructive behavior (drugs, gambling), rash spending, liability, .
- Preserves Federal tax exemption indefinitely.
- Has independent trustee

Gifts