Grant Schultz Real Estate Auctioneer, CREA, 1031-Pro

Step 2. Take Stock of the Present

This step is critical because it is the foundation of your entire estate plan. You can save time and money if you have the following information ready before your first visit to an attorney. The following checklist is a summary of information that your attorney will need.

Checklist : (Directions: Each of the following headings will take you to a page that you can print out to record your information or that you can save as a Word file to record your information).

_____ 1. Family members' names and relationship to you

_____ 2. Location of important papers

_____ 3. Bank accounts and insurance A. Bank accounts and safety deposit box B. Life insurance

_____ 4. Assets

A. Trusts

B. Real estate

C. Stocks and bonds

D. Mutual funds (not held in retirement account)

E. Retirement benefits

F. Personal property

G. Notes, mortgages, and accounts receivable

_____ 5. Liabilities

A. Mortgages and other real estate debts

B. Liens against personal property (i.e. vehicle or machinery loans)

C. Other personal liabilities

_____ 6. Miscellaneous

A. Other financial information

B. Gifts given

Links: Read about Estate Planning and Property Ownership in this guide from Montana State University . http://msuextension.org/publications/FamilyFinancialManagement/MT198907HR.pdf

This article from the Federal Information Center in Pueblo , Colorado provides general information about estate planning. http://www.pueblo.gsa.gov/cic_text/money/estateplan/planning.htm

Step 3.

Develop Objectives

One of the most important steps in doing an estate plan is to determine your objectives. What do you want to accomplish? Your objectives may be very different from those of your neighbors or even from other family members. You and your spouse should do this sheet separately. It's important to remember that your objectives may change as you experience changes in your life.

_____ 1. Provide security for surviving spouse.

_____ 2. Relieve surviving spouse of estate management responsibilities.

_____ 3. Provide security for both spouses after retirement.

_____ 4. Retire at age ____.

_____ 5. Provide security for an incapacitated family member.

_____ 6. Assure continuity of farm, ranch, or other business.

_____ 7. Provide educational opportunities for beneficiaries.

_____ 8. Assist beneficiaries, including in-laws, to get started in business.

_____ 9. Minimize federal and state estate or inheritance taxes.

_____ 10. Name guardians, conservators, or trustees of minor children.

_____ 11. Name a personal representative for the estate.

_____ 12. Provide a means for paying expenses of estate settlement, taxes, and other debts.

_____ 13. Provide equitable (not necessarily equal) treatment of family members.

_____ 14. Transfer specific property to specific people. _____ 15. Make gifts to family members and others during lifetime.

_____ 16. Reduce income taxes by disposing of income property during life.

_____ 17. Transfer property during life by installment sale.

_____ 18. Provide for charitable bequests to favorite charities or organizations.

_____ 19. Minimize probate and settlement costs.

_____ 20. Other, _______________________________________ There are many ways to accomplish your objectives. No one way will be right for everyone. Your objectives will guide you through each step of the estate planning process.

process.

Step 4. Choose Professional Advisors, a Guardian, and a Personal Representative You will need to choose several advisors. Some of the advisors will be professionals and some will be personal. Think of this step as developing a team of talented players who will help you find the way to reach your goals for your family's well-being. Your team could include: an attorney, a financial planner, a trustee, an executor or personal representative, a guardian, and others.

Professional advisors:

Attorney • Ask your friends, accountant, banker, and/or financial planner for suggestions. • After collecting at least three names, make an appointment with each attorney. • Ask about their background and experience. • Are you able to communicate clearly with each attorney? • Discuss fees. Does the attorney charge by the hour, a flat fee, or a percentage of the estate? • After your initial visits with the three attorneys, consider how comfortable you would be discussing your situation with the person. • Would your spouse or children be comfortable working with this person when you are gone? • Ask the attorney how long it would take him or her to complete the process. For information on referral services from the American Bar Association, go to: http://www.abanet.org/ and click on the Find Legal Help link in the left menu. Another resource for referrals is the American College of Trust and Estate Counsel. At www.actec.org, ACTEC Fellows are selected on the basis of professional reputation and ability in the fields of trusts and estates and for having made substantial contributions through lecturing, writing, teaching, and bar activities.

Financial Planner A financial planner will help you to clarify your objectives and suggest alternatives that should be discussed with your estate planning attorney.

The financial planning process consists of six steps:

1. Establishing and defining the client-planner relationship

2. Gathering client data, including goals

3. Analyzing and evaluating financial status

4. Developing and presenting recommendations and/or alternatives

5. Implementing the financial planning recommendations

6. Monitoring the recommendations A resource for selecting a financial planner is the Certified Financial Planner Board of Standards at www.cfp.net. At that site, select Search for a Certified Planner to find a planner in your state. Another resource is the Financial Planning Association at www.fpanet.org. At that site you can find a CFP™ Professional by selecting Public/Find a Planner.

Personal advisors:

Executor or Personal Representative

• An executor makes sure that your wishes are carried out and manages your property until the estate is passed on to your heirs.

• You need to have confidence in the person and know that he or she can be trusted to carry out your wishes.

• According to Steve Weisman, an elder law attorney, two other important qualities for an executor are knowledge of your family and common sense.

• A personal representative is entitled to receive a fee for services. Personal representatives often waive their fee for a family member or good friend. Discuss in advance whether your personal representative will expect to be paid. This is a Metropolitan Life publication about making a will. It has a good explanation of what executors do. http://www.pueblo.gsa.gov/cic_text/money/estateplan/planning.htm Guardian • A guardianship specifies who will have physical custody of your children.

• The first choice for a guardian could be the surviving parent unless death, divorce, or other situations make that choice impossible or undesirable.

• The second choice is a loving member of your immediate family or a loving friend.

• You may want to name a Conservator to handle the decisions about money for the children in addition to the person (Guardian) who has physical custody of the children. Deciding on a guardian for children is often a challenge for parents. Ric Edelman, a financial planner, has developed a list of questions to help parents choose a guardian. http://www.ricedelman.com/cs/education/article?articleId=195&titleParam=Why%20Parents%20Procrastinate%20in%20Writing%20Their%20Will%20.%20.%20.%20and%20Nine%20Questions%20to%20Help%20You%20Overcome%20It

For more information about providing for children, see Estate Planning for Families with Minor Children, http://msuextension.org/publications/FamilyFinancialManagement/MT199117HR.pdf Trustee • A trustee is responsible for the prudent management of a trust's assets in a way to generate income for the beneficiaries and to continue to grow capital.

• He or she must follow state and federal regulations that apply to the trust.

• Desirable qualities for a trustee are investment expertise, integrity, judgment, and the ability to get along with family members. Durable power of attorney

• This is a person you name to be your representative to perform certain actions if you become unable to manage your affairs. For example, the power of attorney could pay bills, sell securities, or make major financial decisions on your behalf.

• Choose someone you trust completely as your power of attorney. Health care power of attorney • This is a person you appoint as a representative to act on your behalf in matters affecting health care, including consenting to health care procedures in the event of your incompetency or incapacity.

• This representative's powers do not become effective until you become incapable of consenting to health care.

• This representative needs to know and understand your wishes. Make a list of your advisors. (Directions: This will take you to a page that you can use to print and record your information or that you can save as a Word file to record your information.)

Some notes from the 4H events at the Iowa State Fair, courtesy of Iowa State Extension

A shirt from a garage sale, pants from a consignment store, a retro or vintage jacket from Mom or Dad's closet: these are the fashion building blocks that Iowa teens

will be using as they prepare their recycled outfits for the 4-H $15 Challenge clothing event at the Iowa State Fair. 4-H teens from throughout the state - up to three 4-H'ers per county - will be competing in this "green" recycling challenge at State Fair, said Sue Bogue, program specialist with Iowa State University (ISU) Extension 4-H Youth Development.

They will be modeling their $15 Challenge creations during the 4-H Revue of Fashions, Aug. 7, 8 and 9. The Revue is at noon each day at Merle Hay Mall in the Lower Bridge Court and repeated at 4 p.m. in the 4-H Exhibits Building at the Iowa State Fair.

"Their challenge is to spend no more than $15 at consignment shops, garage sales, eBay or other used clothing venues to select or purchase clothing for a complete outfit. They may not purchase new clothes at traditional retail stores for this challenge," Bogue said.

"Selected" means its OK to use clothing from a "free" box at a garage sale or to borrow a "vintage" piece from Mom or Dad - with their permission, of course, Bogue explained.

"We really are encouraging young people to expand their shopping horizons and ‘go green' by reusing or recycling clothing. And besides, it's ‘cool' to be thrifty, particularly in today's economy," Bogue said. "Also, rather than buying something under $15 just for this State Fair clothing event challenge, 4-H'ers should consider look, fit and construction as well as whether they need the clothing in their wardrobe," Bogue noted.

"In fact, we encourage adults to learn this lesson, too."

4-H is a community of young people across America who are learning leadership, citizenship and life skills. In Iowa the 4-H program is headquartered on the ISU campus in Ames and offered in every county through the local ISU Extension office.

Estate Planning Part 5

Step 5 of 6 in a series I have prepared to consider when preparing an estate plan. Every situation is different, a trusted attorney and/or financial advisor should be involved in any estate planning discussion you have with your family. VersaLand Real Estate Auctioneers works with many estate attorneys to assist families in selling real estate assets. This process is best done with prior estate planning. Please read through this ENTIRE series, and bring the fine points to your attorneys attention.

Best Regards,

Grant Schultz

VersaLand Real Estate Auctioneers

Step 5. Consider Alternatives

There might be several ways to accomplish your objectives. Explanations of some of the alternatives are given below. Ask your professional advisors to explain the alternatives that would work for you. Think about the consequences of each one. You will probably want to talk them over with your spouse, family members, or other advisors before making your decisions. Some issues that you might want to discuss with your advisor include the following: How your estate plan affects the estate of your surviving spouse and the amount of estate taxes that he or she will owe upon death. How your estate plan will be affected if a named beneficiary dies before you do. You need to check the laws of the state in which you live.

Each state makes it own laws in regard to estate planning. A. Property ownership How your property is titled is important because it affects how a person's property is distributed at death. This resource will help you make decisions about distributing your personal property.

http://www.yellowpieplate.umn.edu

For information on the main forms of property ownership and examples of estate settlement for each, see Estate Planning: Property Ownership,

http://msuextension.org/publications/FamilyFinancialManagement/MT198907HR.pdf

For more information about how to communicate when there are sensitive issues relating to property transfer visit,

http://www2.ces.purdue.edu/farmtransfer/

B. Preparing a will A will is a legal declaration of how a person wants to have his or her property distributed at death. Another resource to help you understand wills is Estate Planning: Wills,

http://msuextension.org/publications/FamilyFinancialManagement/MT198906HR.pdf

C. Using a trust A trust is a legal arrangement where a person (grantor) transfers legal ownership of property to a trustee to hold and manage for the benefit of named beneficiaries. We suggest that you discuss trusts with your attorney.

D. Your gross estate Another net worth calculator is available at Smart Money. The site is

www.smartmoney.com/estate/

. Read the article Will You Owe Estate Taxes? And use the Net Worth Calculator and The Estate Tax Exposure Meter under the link, Will You Owe Estate Taxes. Estate Planning Defined shows an example of How to Estimate a Gross Estate, Probate Estate, and Taxable Estate.

(You will need to scroll down the page to this section.)

http://www.agnr.umd.edu/MCE/Publications/Publication.cfm?ID=131&cat=A

E. Insurance This resource from the National Financial Planning Support Center talks about insurance serving several purposes in estate planning. http://www.fpaforfinancialplanning.org/docs/assets/4-13-06estateplanning.pdf For information to help you understand when insurance fits into your estate plan, see Life Insurance: An Estate Planning Tool, http://msuextension.org/publications/FamilyFinancialManagement/MT199211HR.pdf

F. A living will This is a declaration that you prefer to die a natural death instead of using extraordinary medical treatment to keep you alive. This site has forms for living wills that are designed for particular states. http://www.finance.cch.com/tools/poaforms_m.asp

G. Durable power of attorney This site has forms for a durable power of attorney that are designed for particular states. http://www.finance.cch.com/tools/poaforms_m.asp More information, http://msuextension.org/publications/FamilyFinancialManagement/MT199001HR.pdf

H. Health care power of attorney This site has forms for health care power of attorney that are designed for particular states. http://www.finance.cch.com/tools/poaforms_m.asp

Before you meet with an advisor, you might want to develop a list of questions to ask about the alternatives that seem to fit your estate planning needs.