Wills, Trusts & Estate Planning Fundamentals

Wills, Trusts & Estate Planning Fundamentals


Hello Neel Shah from law office of Shah & Associates and I’m very excited about the meetings to discuss your personal statement. I often tell
clients, advisers or any referral source that
the real goal of estate planning is to really
get to two major variables its this is what I have and this is what
I wanna do it whether you’re planning for myself or
for you Bill Gates, Warren Buffett or the average
family out there if you really boil down to
this is what I have this is what I want to do with it you
can come up with a custom solution for yourself so if you recall from
earlier video if you don’t have earlier videos drop me
an email will make sure we get it over to you but the state is really everything that
you on during your lifetime at your death its call your state. An estate
plan is deciding who gets what now often we’ll see is this warriors
misconception out there that if I don’t have an estate plan I
don’t hassle comprehensive plan the government’s going to come in and take
everything that I own and for reasons i’m gonna explain in a second that’s just not true let’s take our typical family situation
in fact let state my family situation. In typical
family or my family we have a husband, a wife, a son and a daughter. Often what people wanna do is a plan that says
so long as I’m around our so long as my spouses
around I want my assets to go to each other meaning if husband is no
longer around asked you go a wife if wife no long around assets should go to husband it neither of us is around we want our
assets to go to the kids this is going to happen in most cases even if
there is no even if there is no trust so long as
there are not some extenuating circumstances such as children from previous urges or will contests and a whole host of other issues, most
states have laws that allow for this to happen even if there
is no comprehensive estate plan in place the downside is this will happen so what do I mean by that well if there is no planning and the kids were to receive an
inheritance here the kids get it out right what does that
mean when he get out right it’s in their account it’s on their
Balance sheet its in their personal financial statement what we suggest doing for children atleast especially minor children but really
anybody is inheritances should not be received outright but they should be received in a bucket and this bucket should be such that
there’s a lid on it its closed off but what if you need to access it on order to access it we’re gonna make sure that each of these buckets as a spigot that can be turned on and off you’re gonna decide during the course of
your plan who’s going to be in control of this spigot why have a spigot well if it
doesn’t their personal financial statement and the assets go into the spigot it doesn’t belong to them but is there for their benefit if it
doesn’t belong to them it can be attacked who would be the ones with attack, it could be litigators, event a lawsuit, could be
divorcing spouses even they are just not good with money and you don’t want to do that much control or maybe like my children they are young
and maybe they shouldn’t have that much control earlier if they’re under 18 they aren’t allowed to get all out that money right anyway it’s going to be in some sought of
court-mandated trust account until they turn eighteen and they fill out couple of shots paper and they get it all and I always say I
don’t know about you but when I was 18 if I had a couple hundred thousand for a couple million in my account I would
have a lot of fun but I probably wouldn’t be here recording this video today so that’s one thing now assume that you want some of this how you get to this point well that’s what these brown arrows are all these brown arrows represent a process
called probate or estate administration so here’s what
happens in my context I will pass away my wife or whoever I appoint is gonna take my will to the courthouse say this is what Neel had and this is
what he wanted to do it that whole process called probate.To
complete that process will take nine months to two years it’s a long
process some states like New Jersey not so bad
other states like New York kind of annoying and little bit of nuisance so here’s what we do to avoid that process. Ohh before I get
into that the whole process also very public meaning if the whole
world your business partners, your friends, your
neighbors the average guy on the street that nosy
person who works with you wants to see who got what out of his
entire estate plan they can’t because it is public information to remember those close bucket that we
created for the kids imagine that during your lifetime you decide you’re gonna created open
bucket for yourself and if you marry you may create open bucket few spouses as well why do this, well unlike the ones we created for the kids
here where there’s a lid on it this one’s open and that means you can either put things in or take things out no restrictions what so ever because most people want to have that access but if you were
to become disabled you can decide your spouse will and your spouse might have the inverse of that although people has a way, bucket don’t will one person passes away in this
example the bucket moves over to the next person
no court process involved no public process involved when the second person passes away this transforms into this closed bucket for the next generation there is no probate for this stuff thats put into this
bucket during your lifetime these can be changed at any time they are revocable these are created during your lifetime as it was to this one is created at death so
it’s Lily and it’s not a bucket it’s a trust when you start this estate planning process think of yourself have fork in the road and you have two different ways you can
pursue this planning you could either have a will base plan
which would have these arrows but also create these green buckets for the next
generation or anybody else who you wanna protect or you can go to revoke a living trust which is basically saying i’m gonna create a bucket and that bucket it’s gonna be passed on for the next generation or two the next
a spouse and so on and so forth with minimal whatever do the work now verses save the work for later so now know the difference
between revokable living trusts and Wills that’s really the foundational part of estate
planning I’m gonna really quickly to talk about estate taxation and how that works as
well and then the next video we will talk about the process and how we actually do this for a planning when somebody passes away there’s two authorities in
generally want to look at taxation and they want to see whether or not they
can take a bite out this a estate the amount that’s being passed from one
generation to the next so in most cases when a spouse passes away and another
spouse receives it there is no estate tax due because they
have what’s called a unlimited laral duction so let’s just say
for example there’s two million passing and two million in the spouse’s name two million going from one spouse to the
other if we have a citizen spouse and this two million is coming
here there is no state tax due if somebody is on a green card or a visa different situation we’ll
talk about that in person but in this example lets assume these both are citizens spouses. This spouse now has a total of four million because there was no estate tax due when the next generation inherits that’s when the drill starts coming out
of these taxing authorities mouths that’s when they want to look at this
and say yeah we might be able to cut this who are the ones we look at. The first is the IRS and the IRS in 2014 says you have more then 5.34 million going to the next generation we’re gonna
say forty-percent. I’m simplifying a little bit for the purpose of this video but there is a way for both the spouses
to double up on it to make it a total 10.68 suffice it to say right now use the 5.34 times two and know that excess of that is
gonna be tax adequate both 40 percent not nice. The second authority is your state most commonly New York or New Jersey they’re going to say we’re also going to
take a look at this estate to see whether we can get a cut, New Jersey says if you got more than 675,000 going we take our tax. New York has one
that’s actually changing every year until 2019 going up steadily but this
year we’re using two million dollars are as a rounded up now number rounded down number, so York says if you got more than two million we will take our tax. how much is the tax for the state it varies from state to state but is
roughly about 15 percent in both states these can also plan for. The IRS that can kind of smart and they said look at the only tax people in a die everybody is just gonna give away their money when they pass away before they pass away so the IRS basically said look you can either die with that amount or you
can give you give it away during your lifetime with the total amount wealth you transfer
goes from one person to another person not spouses we gonna take this money if you give it during your lifetime will call it a gift tax and if give it away death we will call estate tax. Clearly we’ll be doing our job
there are weren’t ways to you mitigate this or avoided altogether and
that we’re going to talk about we meet in person our next videos we will talk little bit about the process and how we actually implement some of these strategies. So look forward to see you on other the side. I’m Neel Shah from the Law office of Shah & Associates protecting your business your family your legacy.

7 thoughts on “Wills, Trusts & Estate Planning Fundamentals

  1. VERY NICE PRESENTATION.  Mr. Shah breaks the subject down into manageable chunks so its easy to understand the basic principles behind this important and complex situation we all have to deal with at some point in our lives.

  2. Neel Shah , it The Real Lawyer to meet for all your need.Being I am life Insurance agents, I recommend him lots of my clients and They all are happy with Neel Shah’s full knowledge and crystal clear service.

  3. An informative video, good job Shah. You provided the must knows and essentials of trusts and wills in an easy to understand manner.

  4. Thanks for sharing your knowledge.

  5. In the son's closed bucket, is it limited to how much money the person can hold???

  6. Thank you for sharing an informative presentation..

  7. Thanks

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