Certified Estate & Trust Specialist

CERTIFIED ESTATE AND TRUST SPECIALIST™ CES™ PROGRAM OUTLINE OVERVIEW The CES™ program lays a solid foundation and explains core concepts before tackling sophisticated estate planning techniques. Materials that have been written with an eye toward real-world situations. The content is both practical and simple to follow, unlike similar business and law school courses. The building blocks of an effective estate plan are a will and one or more trusts. Our estate planning education materials are written so the client can also understand them, enhancing your services as a financial professional.

MODULE I: INTRODUCTION TO ESTATE PLANNING GOALS, OBJECTIVES AND RISKS Estate Planning Defined Who Needs Estate Planning Why the Interest in Estate Planning Tools for Wealth Protection THE ESTATE PLANNING PROCESS Six Basic Steps Establishing a Client/Planner Relationship Collecting Client Information Defining Transfer Objectives THE ESTATE PLANNING TEAM Unauthorized Practice of Law

ESTATE PLANNING DOCUMENTS WILLS Intestacy Advantages of Wills Limitations of Wills Types of Wills Legal Capacity to Execute a Will Clauses in Wills Sample Wills Revoking and Changing Wills Side Instruction Letters Statutes Affecting Wills Avoiding Will Contests POWERS OF ATTORNEY General and Limited Power of Attorney Durable Feature / Springing Power Power of Attorney for Property Disadvantages of a Power of Attorney DIRECTIVES REGARDING HEALTH CARE Durable Power of Attorney for Health Care Living Wills/Advance Medical Directives Do Not Resuscitate Order (DNRs)

MODULE II: TYPES OF PROPERTY INTEREST PROPERTY INTERESTS Fee Simple Tenancy in Common Joint Tenancy with Rights of Survivorship Tenancy by the Entirety Community & Separate Property in Community Regimes OTHER OWNERSHIP TOPICS Partial Ownership Legal Ownership vs. Equitable Ownership

THE PROBATE PROCESS INTRODUCTION Testate vs. Intestate Succession Transfer of Assets Advantages of Probate Disadvantages of the Probate Process Nontraditional Relationships THE PROBATE PROCESS State Probate Laws Beginning the Probate Process: Producing a Will The Probate Court Personal Representatives: Executors and Administrators Managing and Distributing the Estate Potential Distribution Problems PROPERTY PASSING THROUGH PROBATE PROPERTY PASSING OUTSIDE OF PROBATE State Contract Laws State Titling Laws State Trust Laws

GIFT TAX THE GIFT TAX SYSTEM Historical Background and Purpose Estate and Gift Tax Reform

CHARACTERISTICS OF A GIFT Parties Definition and Elements of a Gift Consideration and Valuation Types of Gifts EXCLUSIONS & EXEMPTIONS The Annual Exclusion Split Gift Elections Gifts of Joint and Community Property Applicable Credits GIFTS OF A PRESENT & FUTURE INTEREST Present and Future Interest Gifts The Crumney Provision The 5/5 Lapse Rule TRANSFERS RESULTING IN NO GIFT TAX Transfers to Political Organizations Qualified Transfers Payments for Support Payments Between Divorcing Spouses Transfers within a Business Setting Gifts to Spouses Charitable Gifts THE GIFT TAX RETURN Form 709 Statute of Limitations Calculation INCOME TAX ISSUES Donee’s Adjusted Basis Exceptions STRATEGIES Achieving Client Goals with Direct Gift Gifts of Appreciating Property Gifts to Spouses and Minors Single and MultiParty Gift Strategies

MODULE III: ESTATE TAX THE GROSS ESTATE Decedent Owned Property Dower Interests Gifts Within Three Years of Death Transfers with Retained Life Estate Transfers Taking Effect at Death Revocable Transfers Annuities Joint Interests Powers of Appointment Life Insurance Proceeds Previously Allowed Marital Deduction VALUATION OF ASSETS AT DEATH Hard-to-Value Assets Financial Securities Life Insurance Alternate Valuation Date DETERMINING TAXABLE ESTATE The Charitable Deduction Unlimited Marital Deduction DETERMINING TENTATIVE TAX Post-1976 Taxable Gifts Tentative Tax Base CREDITS FROM TENTATIVE TAX Applicable Estate Tax Credit Credit for Tax Paid on Prior Transfers Foreign Death Tax Credit PAYING AND REPORTING ESTATE TAXES Filing Requirements Penalties ADJUSTED BASIS TO HEIRS IRD Assets Heir Donor Surviving Owner Community Property Rules for Years Beginning After 2009

LIFE & DEATH TRANSFERS INTRODUCTION Lifetime Transfers ARM’S-LENGTH TRANSACTIONS Sale Installment Sale Exchange TRANSFERS TO LOVED ONES Transfers Not Subject to Gift Tax Gifts Outright and in Trust Partial Sale-Gift Transactions Full Consideration Transfers/Sales Family Limited Partnerships (FLP) TRANSFERS AT DEATH Transfers by Will Property Transferred at Death by Contract Transfers at Death by Operation of Law Charitable Transfers at Death

MODULE IV: TRUSTS

CHARITABLE GIVING

DEFINITIONS AND PARTIES Grantor (Trustor) Trustee Beneficiary

INTRODUCTION Contribution and Taxation Issues Qualifying Organizations Types of Charities

WHY USE A TRUST Management Creditor Protection Split Interests in Property Avoiding Probate (Living Trust) Minimizing Taxes

CHARITABLE GIFTS DURING LIFE Gifts of Cash, Services and Property Contribution Base Limitations Choosing Adjusted Basis over FMV Valuation, Record Keeping and Reporting

THE RULE AGAINST PERPETUITIES ACCOUNTING AND INCOME TAXES Income Taxation Gift Tax as Applied to Trusts Inclusion/Exclusion from Gross Estate

OTHER OUTRIGHT GIFTS TO CHARITY Bargain Sales of Property to Charities Bargain Sales of Appreciated Property Charitable Gift Annuities Encumbered Properties Gifts of Life Insurance to Charities Group Term Life Insurance

TRUST AGREEMENT CLASSIFICATIONS Revocable and Irrevocable Trusts Inter Vivos and Testamentary Trusts Standby and Pourover Trusts Grantor Trusts Funded and Unfunded Trusts Simple/ and Complex Trusts

CHARITABLE GIFTS OF A SPLIT INTEREST Pooled Income Funds Charitable Remainder Annuity Trust Charitable Remainder Unitrust Gift and Remainder Interest Calculation CRT and Insurance for Wealth Replacement Charitable Lead Trusts

TRUSTS USED IN ESTATE PLANNING Life Insurance Trusts (ILITs) Bypass (Credit Shelter) Trusts Power of Appointment Trusts Qualified Terminable Interest Trusts Grantor Retained Trusts Qualified Personal Residence Trusts Tangible Personal Property Trusts Dynasty and Grantor Trusts Trusts for Minors Crumney and Totten Trusts Charitable and Blind Trusts

ADVANCED PLANNING TOPICS Tangible Property Community Property Choosing Between the CRAT or the CRUT Reformation of Disqualified Split Interests

MODULE V: UNLIMITED MARITAL DEDUCTION DEDUCTION DEFINED The Single Economic Unit Advantages and Requirements of the UMD Limitations UMD QUALIFICATION Inclusion in Decedent’s Gross Estate Property Transferred to Surviving Spouse Terminable Interest Rule OUTRIGHT SPOUSAL BEQUESTS Limiting a Direct Transfer QTIP TRUSTS Qualifying as a QTIP Trust Lifetime Transfer Device Estate Taxes PLANNING FOR NONCITIZEN SPOUSE Qualified Domestic Trust ALTERNATIVES TO QUALIFICATION Over- and Under-qualification Bypass Trust Common Trust Arrangements Disclaimers Irrevocable Life Insurance Trusts

LIFE INSURANCE OBJECTIVE OF LIFE INSURANCE Protect Income Stream for Beneficiaries A Source of Funds for Education Provide Liquidity at Death Retirement Income Create or Sustain Family Wealth TYPES Term and Whole Life Insurance Universal and Variable Universal Life First- and Second-to-Die PARTIES TO A LIFE POLICY Owner Insured Beneficiary TAX TREATMENT OF LIFE INSURANCE Transfer for Value Settlement or Cash Surrender Policy Dividends and Loans MECs and 1035 Exchanges Accelerated Death Benefits GIFT TAX TREATMENT Changing Beneficiaries Outright Gift Gifts of Premiums Gifts of Life Insurance ESTATE TAX TREATMENT OF INSURANCE Insurance on Someone Else’s Life Insurance on Insured/Decedent’s Life Three-Year Look Back Rule CREATION OF LIFE INSURANCE TRUST Using Annual Exclusion Other Objectives

MODULE VI: POST MORTEM PLANNING LIQUIDITY NEEDS Last Medical Costs Funeral and Administrative Costs Transition/Adjustment Period Costs Income, and Estate Taxes Generation-Skipping Transfer Taxes LIQUIDITY SOURCES AND IMPLICATIONS Sale of Assets Life Insurance Tax-Advantaged Accounts Closely Held Businesses Distribution of Assets Loans for Taxes and Other Costs DECEDENT’S FINAL INCOME TAX RETURN Joint or Separate Final Return Passive Losses Expense Elections ESTATE FIDUCIARY INCOME TAX RETURN Selection of Tax Year Expense Elections Waiver of Executor’s Fees Income in Respect of Decedent Distributions and Tax Bracket Analysis GIFT TAX ISSUES Election to Split Gifts in Year of Death POST MORTEM PLANNING Valuation of Assets Selection of Valuation Date Alternate Valuation Date Installment Payments Special Use Valuation QTIP and QDOT Election Generation-Skipping Transfer Tax Elections

GENERATION TRANSFERS GENERATION-SKIPPING TRANSFERS Transferor and Transferee Qualified Disclaimers TAXABLE TRANSFERS Direct Skip Taxable Termination and Distributions Filing Requirements and Returns INTRODUCTION TO DYNASTY TRUSTS Rule Against Perpetuities Taxation of Dynasty Trusts Basic Structure and Types of Dynasty Trusts Dynasty Trusts and Business Planning Types and Funding of Dynasty Trusts Drafting Issues

BASIC ESTATE PLAN ESTATE PLANNING PROCESS Determine Client’s Financial Situation Develop Estate Plan Implementation and Monitoring Comprehensive Case Example