The Estate Planning Process - Part 1

The Estate Planning Process Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Is Estate Planning?

Estate planning is the process of accumulating, preserving and distributing assets to achieve the financial goals of people during their lifetimes, and to provide for their heirs according to the estate owner's wishes at death.

As such, estate planning is not a one-time event. Instead, it is an ongoing process designed to accomplish accumulation, preservation and distribution objectives, both during your lifetime and after your death.

Estate Planning Objectives

VSA 2C1.01 ed. 09-12 Page 1 of 1

Accumulation

Estate accumulation objectives involve accumulating assets and net worth during your lifetime by systematically channeling money into savings, insurance and investment plans.

Preservation

Estate preservation objectives include protecting your ability to earn an income during your working years and planning to minimize and offset estate shrinkage at your death.

Distribution

Estate distribution objectives deal with identifying and implementing the tools and techniques that will distribute estate assets to your heirs in an advantageous manner that is consistent with your wishes.

ďƒ“ VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

The High Cost of Dying Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Are the "Unwanted Heirs"?

There may be a mistaken impression that, at death, your assets will automatically be distributed to your loved ones. Instead, several "unwanted heirs" may step forward FIRST for their share of your estate and siphon off a significant portion of yourest at e’ st ot alval ue.

These "unwanted heirs" can include:  Federal Estate Tax  State Inheritance Tax  Estate Administrative Costs (funeral expenses, probate costs, professional fees, final expenses and debts)

What might this mean to you?

THE HIGH COST OF DYING Gross Estate $

1,000,000

Administrative Costs at 5% (1) $

50,000

Taxable Estate $

950,000

2017 Federal Estate Tax (2) $

0

5,000,000

250,000

4,750,000

0

7,500,000

375,000

7,125,000

654,000

10,000,000

500,000

9,500,000

1,604,000

15,000,000

750,000

14,250,000

3,504,000

20,000,000

1,000,000

19,000,000

5,404,000

25,000,000

1,250,000

23,750,000

7,304,000

30,000,000

1,500,000

28,500,000

9,204,000

(1) Actual costs may be higher or lower.

(2) Based on the 2017 maximum 40% estate tax rate and $5,490,000 exemption equivalent.

VSA 2C1.02 ed. 01-17 Page 1 of 1

 VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Estate Shrinkage in Action Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

Bad News…Good News…

The bad news is that at death, a portion of your estate may be siphoned off to pay federal and state death taxes, as well as fees and final expenses required to administer your estate. Your family then receives what is remaining after these estate settlement costs have been paid.

YOUR ESTATE

Death Taxes

$

Personal Property Real Estate Business Interests Government and Employer Benefits Life Insurance

$

Estate Administrative Costs

$

YOUR FAMILY

The good news is that with proper advance planning, you can make sure that more of your estate ultimately passes to your family!

VSA 2C1.03 ed. 09-12 Page 1 of 1

 VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Estate Shrinkage Profiles Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Can Be Learned from Public Probate Records?

You may be interested in what the public probate records of the estates of businessmen, attorneys, entertainers, accountants and even a President have to show.

Gross Estate

Name

Net Estate

Percent Shrinkage

Franklin D. Roosevelt

$

1,940,999

$ 1,366,132

30%

Henry J. Kaiser, Sr.

$

5,597,772

$ 3,109,408

44%

Edwin C. Ernst, CPA

$ 12,642,431

$ 5,518,319

56%

Robert S. Kerr

$ 20,800,000

$11,300,000

46%

$ 20,493,999

$ 5,646,666

72%

William E. Boeing

$ 22,386,158

$11,796,410

47%

Rick Nelson

$

$

506,636

32%

Elvis Presley

$ 10,165,434

$ 2,790,799

73%

Rock Hudson

$

8,600,000

$ 3,926,288

54%

James S. Kemper

$ 10,948,356

$ 7,007,560

36%

Nelson A. Rockefeller

$ 79,249,475

$56,727,628

28%

Conrad Hilton

$199,070,700

$93,288,483

53%

(U.S. Senator, Oklahoma) A.H. Wiggin (Chairman, Chase Bank)

744,357

(Insurance Executive)

Source: Public Probate Records If these people, who had access to the best advice money could buy, were not able to avoid the "unwanted heirs" (federal and state estate taxes an estate administrative costs), it will be difficult for the rest of us to avoid estate settlement costs.

Proper advance planning, however, can minimize the impact of estate settlement costs on the value of your estate.

VSA 2C1.04 ed. 09-12 Page 1 of 1

ďƒ“ VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Estate Growth Considerations: Married Couple Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Are the Estate Growth Implications for a Married Couple?

In a properly arranged estate, the size of a married couple's estate at the death of the surviving spouse determines the estate taxes due. Consider the following: Current Ages of Spouses Spouse 1 Spouse 2 40 50 50 55 60 60 65 70 70 75

Additional Years to Estimated Joint Life Expectancy*

40 45 50 50 55 60 60 65 70 70

49 42 39 37 32 30 28 23 21 19

Estate Growth Rate Factors 5% 10.921 7.762 6.705 6.081 4.765 4.322 3.920 3.072 2.786 2.527

8% 43.427 25.339 20.115 17.246 11.737 10.063 8.627 5.871 5.034 4.316

10% 106.719 54.764 41.145 34.004 21.114 17.449 14.421 8.954 7.400 6.116

* Based on IRS Annuity Table VI. FOR EXAMPLE...

Spouse 1 age 55 and Spouse 2 age 50, with an estimated $1,000,000 estate today, can expect to see it grow to $17,246,000 at 8% by the time the surviving spouse dies in 37 years. This results in the following estate settlement costs and estate shrinkage, assuming that no part of the estate growth is consumed: $ $ $ (1)

17,246,000 862,300 2,215,680 14,168,020 3,077,980

Estate Administration Costs (5%) Federal Estate Tax (1) Net Estate to Heirs Total Estate Shrinkage (17.8%)

Based on the estate reduced by administration costs, on the 2017 maximum estate tax rate of 40% and the unified credit equivalent of $5,490,000 per person. Assumes that through the use of unified credit portability, the surviving spouse's estate receives the benefit of both spouses' full unified credit equivalent ($10,980,000 in 2017).

VSA 2C1.05 ed. 01-17 Page 1 of 1

ďƒ“ VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Estate Growth Considerations: Single Person Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Are the Estate Growth Implications for a Single Person?

In the case of a single person, the size of the individual's estate at death determines the estate taxes due.

Consider the following: Additional Years to Estimated Life Expectancy*

Current Age 40 45 50 55 60 65 70 75 80

43 38 33 29 24 20 16 13 10

Estate Growth Rate Factors 5% 8.150 6.385 5.003 4.116 3.225 2.653 2.183 1.886 1.629

8% 27.367 18.625 12.676 9.317 6.341 4.661 3.426 2.720 2.159

10% 60.240 37.404 23.225 15.863 9.850 6.727 4.595 3.452 2.594

* Based on IRS Annuity Table VI. FOR EXAMPLE...

A single person age 65 with an estimated $2,000,000 estate today can expect to see it grow to $9,321,914 at 8% by the time death occurs in 20 years. This results in the following estate settlement costs and estate shrinkage, assuming that no part of the estate growth is consumed: $ $ $ (1)

9,321,914 466,096 1,346,327 7,509,491 1,812,423

Estate Administration Costs (5%) Federal Estate Tax (1) Net Estate to Heirs Total Estate Shrinkage (19.4%)

Based on the estate reduced by administration costs, on the 2017 maximum estate tax rate of 40% and the unified credit equivalent of $5,490,000 per person.

VSA 2C1.06 ed. 01-17 Page 1 of 1

ďƒ“ VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Do I Need a Will?

Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Is a Will?

The most basic estate planning tool, a will is the legal document that states the actions you wish to be taken after your death in regard to:  the disposition of your property;  the guardianship of your minor children; and/or  the administration of your estate

Do You Need a Will?

If you have a spouse, children and/or property, the answer is most definitely YES! The alternative is to allow the state in which you reside to determine:  how your property will be distributed among your heirs, including who those heirs are;  who will serve as the guardian of your minor children; and/or  how your estate will be administered.

Who Can Make a Will?

State statute determines who can make a will. Generally, you must be "of age," as defined by state law, and of sound mind. In addition, state law generally requires that your will be written, signed and witnessed by a required number of witnesses.

While you can draw your own will, the preparation and execution of this important legal document is generally best left to an attorney.

VSA 2C1.07 ed. 09-12 Page 1 of 1

 VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Dying Without a Will Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Are the Implications of Dying Without a Will?

People who die without a valid will, die intestate. In this event, the state in which they resided effectively provides a will through the state's intestacy law. This means that the state dictates who will receive the estate owner's property and in what proportion.

While state intestacy laws do attempt to provide for a "fair" distribution of property, the state's "one-size-fits-all" will simply cannot reflect the specific wishes of the estate owner in regard to either property distribution or the unique needs of the estate owner's heirs.

In addition, state intestacy laws require that the probate court appoint a guardian for any minor children.

The court-appointed guardian, who may not even be a relative, may be required to post bond and the guardianship will be supervised by the probate court.

Finally, when a person dies intestate, the probate court appoints an administrator of the estate. This administrator can be anyone of the court's choosing and is required to post bond, an additional expense that must be paid by the estate.

Thechoi cei syour s‌ you can draw your own will or the state will do it for you!

VSA 2C1.08 ed. 09-12 Page 1 of 1

ďƒ“ VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Advantages of a Will Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

The Advantages of a Will Include:

 A will allows property to be transferred according to the estate owner's wishes, avoiding

state intestacy laws.  A will permits a parent, instead of the state, to name the guardian for any minor children

or other dependents, such as a handicapped adult child.  A will enables the estate owner to name an executor to administer the estate which, in

some states, minimizes probate and its related expense.  A will can lower estate settlement costs by minimizing estate taxes, waiving probate fees

and bonds and streamlining the disposition of estate assets.  Provisions in a will can defer distribution of a minor child's remaining share of the estate

to a more mature age than 18 or 21.  With a will, an estate owner can be certain that bequests of money or personal property

to specific individuals or charitable organizations will be carried out.  If the estate includes a business, a will can authorize the executor to operate the business

until the estate is settled, with no exposure to personal liability on the executor's part.

VSA 2C1.09 ed. 09-12 Page 1 of 1

 VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.

Role of the Executor Presented by:

Geoff Thompson Synergistic Life and Estate Prepared for:

What Role Does the Executor Play?

The executor (executrix if a woman) is the person named in your will who assumes the responsibility of settling your estate according to the terms of your will. Depending on the complexity of your estate, this fiduciary responsibility requires time, diligence and some degree of business expertise.

The responsibilities of your executor include:  Filing a petition with the probate court to probate your most recent will.  Completing an inventory of all estate assets.  Taking possession of, arranging for appraisals and/or managing certain estate assets, such as securities, safe deposit boxes and valuables.  Reviewing debts owed by the estate and paying those that are valid.  Managing or disposing of any business interests in accordance with your wishes.  Filing required state and federal income and estate tax returns and paying the taxes that are assessed.  Distributing specific bequests made in your will.  Paying attorney, appraiser, probate and executor fees.  Providing an accounting of all funds received by the estate and disbursements made from the estate.  Distributing the residuary (remaining) estate according to the terms of your will.  Exercising throughout the estate settlement process the judgment that a prudent person would be expected to exercise in conducting his or her own affairs.

VSA 2C1.12 ed. 09-12 Page 1 of 1

 VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, VSA, L.P. is not engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.