2014Successor Trustee

Workshop“I found the red book. Now what do I

do?”

May 28, 2014

What is the red book? Where is it? What does it have to do with me?

3

Definition of Estate Planning

“I want to control my property while I’m alive; provide for myself and my loved ones if I am incapacitated; and when I die, I want to give what I have to whom I want, when I want and the way I want; and, if I can, I want to avoid every tax, court cost and administrative fee possible.”

Living and Well• Trust makers are in complete control of the

Trust and its assets• Successor Trustees serve in a stand-by

capacity• They have no powers or duties at this time

Motivation to Plan• Plans are in place for various contingencies:

including incapacity and death-your decisions- your control

• Decisions are made, relieving loved ones from the emotional toll of this responsibility

• Privacy is protected

• Probate is avoided

Communication• With your Family and

Fiduciaries• Communication now will

reduce stress and conflict later

• Be confident that the Successor Trustee, Patient Advocate, Power of Attorney and Guardians understand their roles and your wishes

• With your Attorney• Keep current with all

developments in the law and impact on your plan

• Inform us of any life changes and make sure your plan remains consistent with any changes in circumstances

•Safe Deposit Box• Does not guarantee immediate

access.• May require a court order to be

opened at time of incapacity or death• If you do choose this option

• Be certain the box is owned by the Trust or jointly

• Let your Successor Trustee know where your documents are stored

•At your Home• Ensure that your documents are

somewhere they can be accessed

Storing Your Documents

• Take advantage of the tools provided in your Estate Planning Portfolio:

• Location List Tab

• Personal Effects Tab

• Compact Disc

• Organizer to List Online Accounts and Passwords

Locations

• Disability Panel

• General Durable Power of Attorney

• Durable Power of Attorney for Health Care and Designation of Patient Advocate

• Legal Directives Card

Incapacity

Disability Panel

• In most cases, doctors are no longer willing to make decisions regarding incapacity

• If your Estate Plan currently relies on a doctor or specialist to make incapacity decisions or if your disability panel includes a doctor or specialist, contact us as soon as possible to update your documents

Power of Attorney• General Durable Power of Attorney

• Appoints an agent to act on behalf of the Trust maker if

he/she becomes incapacitated or otherwise unable to act on

his/her own behalf

• As of 2012, Michigan law requires a signed acceptance

• Agent under the POA is authorized to transfer property to the

Trust and make withdrawals from accounts

• Agent should know where Power of Attorney is located

• DO NOT co-mingle Trust maker’s assets with agent’s own

assets

• Keep records of all transactions and other exercised of powers

Health Care• Durable Power of Attorney for Health Care

and Designation of Patient Advocate• Only controls if the patient lacks the mental capacity to give

informed consent with respect to health care decisions

• Patient Advocate carries out the patient’s advance directives

• Patient Advocate must understand your health care decisions and philosophy as set forth in your document

• HIPAA Release• Authorizes hospitals, doctors, laboratories, etc. to release and

disclose health information to the agent(s) under the health care directives and others you choose to designate

Emergency Medical Card• Legal Directives Card

• Enables health care providers (emergency, hospital, etc.) to obtain:

• Durable Power of Attorney for Health Care and Designation of Patient Advocate

• HIPAA Release

• Emergency contacts

• Physician information

• Allergies

• Medical conditions

When a Death Occurs

• The Successor Trustee(s) steps into a fiduciary capacity• Contact our office as soon as possible before

taking any steps in the administration of the Trust/Estate

• Important Considerations Immediately Following Death• Memorial Instructions

• Qualified Disclaimer

• IRA’s and other Retirement Accounts• Administration Process

Memorial Instructions

•Look to the Estate Planning Portfolio for instructions for the Memorial Service and other important decisions

• Immediate Decisions

• Memorial instructions help to alleviate the burden in a time of grief

• Funeral Arrangements• Description of pre-purchased plan or description of wishes

• Order death certificates from the funeral director

• Anatomical gifts

• These decisions may also be found on the back of the driver’s license

• Look for Important People, Friends and Relatives to contact under the “Location List” tab or on the CD

Qualified Disclaimer•Qualified Disclaimer (Must occur within 9 months)• The written irrevocable and unqualified refusal to accept

an interest in property, from which no benefits have been accepted

• Interest passes to the decedent’s spouse or to another

• A Qualified Disclaimer must be made prior to acceptance of any benefits by the disclaimant

• There is a 9 month deadline

• Most often used where the exclusion from estate tax was not fully utilized by the decedent

It is imperative for the Successor Trustee(s) to review the estate plan of the decedent with counsel prior to accepting

the benefits of ANY property passing from the decedent

Administration•Without proper legal counsel, DO NOT take any of the following actions: • Change any bank or brokerage accounts

• Withdraw funds from a bank or brokerage account, even if such account is joint

• Make any distributions (including distributions of personal property of the decedent) to any beneficiaries

• Try to use any Powers of Attorney • Liquidate any retirement accounts

Do the Following:• Obtain 20 copies of the death certificate

• Make an appointment so that we can complete the Administration Process tailored to the individual trust(s) that you are responsible for administering

• Legal documents are required to collect trust assets and protect against creditors

The Process at a Glance---

Do not try this Alone!• Legal Documents Necessary to Create the Successor Trustee’s Authority

• Obtain Tax ID Numbers

• Gather and Value the Trust Assets

• Substantive Review of all “Gathered Documents” and Legal Implications

• Establish Inherited IRA’s and other Retirement Accounts

• Real Estate

• Taxes/Allocation of Income and Principal

• Inventories and Accountings

• Address Specific “People Problems” that may Exist

Taxes• Estate tax• Portability Election• Final 1040• Partnership returns• Fiduciary returns (1041’s) • How to attribute the income earned

by an irrevocable trust (K-1’s)• Coordination with CPA

EmergenciesEmergency Instructions are Located Behind the Red Emergency Tab in your Estate Planning Portfolio

What to do at the time of an incapacity or death:1. Do Not Panic2. Call Us3. When In Doubt, Do Nothing

More detailed instructions and the forms to be used for both death and disability are behind the Red Tab

Further Questions

Please Call (313) 640-4500(888) 640-4503

-or-E-Mail

Jon B. Gandelot- jbg@gandelot.comAmy B. Hartmann- ahartmann@gandelot.com

Nancy A. Nihem- n.nihem@gandelot.com

18720 Mack Avenue, Suite 270, Grosse Pointe Farms, MI 48236