Estate Planning QuickView v. 5.00 User Manual
Contents
1. Life Insurance Not taxable Retirement Plans Not taxable Retirement plans are subject to tax if the decedent had the right to possess the benefits without penalty Benefits are usually taxable if the client is over 59 In such a case enter the value of the retirement plans as part of the client s assets and not as retirement benefits Marital Distributions Not taxable Marital Trust Not taxable upon the death of the first to die Are subject to tax upon the death of the second to die Nontaxable life insurance added to a marital trust will result in tax on those proceeds upon the death of the second to die However it is assumed that separate trusts will be created or that this tax trap will be otherwise avoided Nonmarital Trust Spouse s life estate is not taxable Present value of remainder to children is taxable The program allows you to enter a factor that will determine the percentage of the trust that is taxable Taxable amount upon the death of the First to Die equals The net assets of the first to die benefits The federal marital deduction reduced by nontaxable life insurance and retirement The nontaxable portion of the Nonmarital Trust reduced by the life insurance and retirement benefits Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital di2. Alt G View the graphs Alt E Enter expenses Alt C Access the Help contents Alt U Find out how to use Help Alt H Search the Help index Estate Planning QuickView Chapter 3 Working with Files Frequently Used Procedures Following are procedures for creating opening and saving files within Estate Planning QuickView Creating a New File e On the File menu click New The program clears all previous data entry and resets the program s default values Opening an Existing File 1 On the File menu click Open Or on the toolbar click amp The Open dialog box appears 2 In the File name box enter the name of the file and proper extension of the file that you want to open Be sure you have selected the proper drive and folder of your file Opening QuickView 99 or earlier files 1 On the File menu click Open Or on the toolbar click amp The Open dialog box appears 2 In the Files of type box click e 3 From the list click Previous QuickView Versions 4 Open the file named cases db 5 In the box that appears select the case that you want to open Saving a File 1 On the File menu click Save Or on the toolbar click LJ 2 Ifthe file has not been saved previously the Save As dialog box appears 3 In the File name box type a name for the file The program automatically adds the proper extension to the file name 4 Select the drive and folder in which to save the file
3. For deaths in 2001 the credit increases to 6 600 and then increases again to 13 900 for deaths after 2001 Life Insurance Not taxable Benefits attributable to employer contributions are Retirement Plans exempt The program will allow you to enter a factor that will determine the percentage of taxable benefits Marital Distributions Not Taxable Not taxable upon the death of the first to die Subject to tax upon the death of the second to die Marital Trust Nonmarital Trust Taxable No exemption for spouse s life estate Taxable amount upon the death of the First to Die equals The net assets of the first to die The taxable portion of retirement benefits The federal martial deduction reduced by the nontaxable life insurance and retirement benefits Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die the taxable portion of retirement benefits 46 Chapter 8 Reference Material the value of the Marital Trust if any not including any life insurance and retirement benefits that were not taxed upon the death of the first to die Tax Rates Amount Tax 0 to 40 000 2 40 000 to 100 000 800 plus 3 over 40 000 100 000 to 565 000 2 600
4. 12 L License Agreement essetis 59 Life Insurance 10 11 12 Louisiana Inheritance Tax 38 M Marital Deduction 28 Marital Trust 13 Maryland Inheritance Tax 40 Menu Batalla 4 Mississippi Inheritance Tax 41 N h EIER 12 Names Sc Ee 9 Nebraska Inheritance Tax 43 Net Asset iria Nerd 10 Nonmarital Trust 13 15 Nontaxable Assets eee 12 Nontaxable Trust eee 13 Number of Children 15 O Ohio Estate Tax eee 45 Oklahoma Inheritance Tax 47 63 Estate Planning QuickView P Page Marelnsa cech d I ues 23 Page Numbers esent te nase 24 Pennsylvania Inheritance Tax 50 Plans 1 and 9 sees 17 Plans 2 and 10 sssss 17 Plans 3 and 11 is 17 Plans 4 and 12 see 18 Plans 5 and 13 ssssss 18 Plans 6 and 14 is 19 Plans 7 and TI innnan tanna 19 Plans 8 and 16 sess 20 Preferences cconoooconnonocncnnnonannnss 9 12 13 Print Preview erre 26 Printer S GUI A nrs 26 PANID S Cae a rasa e e iue 25 Printing Options eese 24 Probate Percentage 14 R Report Options 23 24 RODOLIS
5. 3 500 000 190 840 plus 9 6 over 3 000 000 3 500 000 to 4 000 000 238 840 plus 10 4 over 3 500 000 4 000 000 to 5 000 000 290 840 plus 11 2 over 4 000 000 5 000 000 to 6 000 000 402 840 plus 12 0 over 5 000 000 6 000 000 to 7 000 000 522 840 plus 12 8 over 6 000 000 7 000 000 to 8 000 000 650 840 plus 13 6 over 7 000 000 8 000 000 to 9 000 000 786 840 plus 14 4 over 8 000 000 43 Estate Planning QuickView 9 000 000 to 10 000 000 930 840 plus 15 2 over 9 000 000 Over 10 000 000 1 082 840 plus 16 over 10 000 000 Nebraska Inheritance Tax Following is a summary of how the Nebraska Inheritance Tax affects the elements of an estate plan Life Insurance Not taxable Retirement Plans Taxable Marital Distributions Not Taxable Marital Trust Not taxable at either death for trusts with general powers of appointment Spouse s life estate is not taxable The present value of the remainder to children is taxable The program allows you to enter a factor that will determine the percentage of the trust that is taxable Nonmarital Trust There is a deduction for federal estate tax paid There is a 10 000 exemption for each beneficiary There is also a homestead allowance of 7 500 applicable only to a surviving spouse or minor children a family exemption of 5 000 and a family maintenance allowance of 9 000 applicable only to a surv
6. 375 plus 7 5 of the amount over 100 000 Over 100 000 For deaths in 2001 the tax on each child s share is calculated as follows 0 to 50 000 tax is 0 50 000 to 100 000 tax is 6 of the amount over 50 000 53 Estate Planning QuickView Over 100 000 tax is 3 000 plus 7 5 of the amount over 100 000 For deaths in 2002 the tax on each child s share is calculated as follows 0 to 60 000 tax is 0 60 000 to 100 000 tax is 6 of the amount over 60 000 Over 100 000 tax is 2 400 plus 7 5 of the amount over 100 000 For deaths in 2003 the tax on each child s share is calculated as follows 0 to 70 000 tax is 0 70 000 to 100 000 tax is 6 of the amount over 70 000 Over 100 000 tax is 1 800 plus 7 5 of the amount over 100 000 For deaths in 2004 the tax on each child s share is calculated as follows 0 to 80 000 tax is 0 80 000 to 100 000 tax is 6 of the amount over 80 000 Over 100 000 tax is 1 200 plus 7 5 of the amount over 100 000 For deaths in 2005 the tax on each child s share is calculated as follows 0 to 90 000 tax is 0 90 000 to 100 000 tax is 6 of the amount over 90 000 Over 100 000 tax is 600 plus 7 5 of the amount over 100 000 54 Chapter 8 Reference Material For deaths in 2005 the tax
7. Estate Planning QuickView Saving an Existing File 1 2 Open an existing file or create a new file On the File menu click Save As Or on the toolbar click LJ The Save As dialog box appears In the File name box enter a name for the new file The program automatically adds the proper extension to the file name Select the drive and folder in which you want to save the file Exiting the Program l 2 Be sure that you save your file before exiting the program On the File menu click Exit Chapter 4 Entering Data Client Data Section Entering data into Estate Planning QuickView is easy Nearly all data entry takes place in one section You will begin entering data for each file in the Client Data section Husband Status Names First First Last Steve O Single Net Asset 4k 1 300 000 amp Married Life Insurance 1 000 000 Retirement Plans 200 000 references Adjustable Taxable Gifts 0 Estate Growth 0 00 Domicile FL Year of First Death 2004 Year of Second Death 2010 Input Description Status All files are based upon cases that involve either a Single individual or a Married couple On the left side of the window you will see two buttons Click Single or Married Preferences The Preferences box lets you enter different names for Marital Trusts Nonmarital Trusts Heirs and the The names that you enter in the Preferences box will appear in
8. is calculated as if there were no state death tax Second the state death is calculated Third the nonmarital share is recalculated taking into account the credit generated by the state death tax Fourth the 28 Chapter 8 Reference Material state death tax 1s recalculated This cycle continues until the calculations converge on a single number The program assumes that all assets included in the gross estate are available to fund the nonmarital share regardless of whether the assets are probate assets life insurance or retirement benefits The program also assumes that all death taxes will be paid from the nonmarital share Usually this is only state death tax unless the estate plan uses less than the optimum marital deduction Marital Deduction In all cases the marital trust qualifies for the federal estate tax marital deduction and the program includes this in the gross estate of the surviving spouse The nonmarital trust does not qualify for the marital deduction and is not included in the gross estate of the surviving spouse regardless of whether or not the surviving spouse is a beneficiary of the trust Except for the nonmarital share the program assumes that all other assets of the estate will pass to or in trust for the surviving spouse and they qualify for the federal estate tax marital deduction Federal Estate Tax Rates The federal estate tax is calculated from a tax base equal to the sum of the taxable
9. number of children Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die The retirement benefits of the second to die The value of the Marital Trust if any not including any life insurance and retirement benefits that were not taxed upon the death of the first to die The number of children 100 000 exemption for each child The total tax is the tax on each child s share multiplied by the number of children Tax Rates Amount Tax 0 to 25 000 1 25 000 to 50 000 250 plus 2 over 25 000 50 000 to 200 000 750 plus 3 over 50 000 200 000 to 300 000 5 250 plus 4 over 200 000 300 000 to 500 000 9 250 plus 5 over 300 000 500 000 to 700 000 19 250 plus 6 over 500 000 700 000 to 1 000 000 31 250 plus 7 over 700 000 1 000 000 to 1 500 000 52 250 plus 8 over 1 000 000 Over 1 500 000 92 250 plus 10 over 1 500 000 38 Chapter 8 Reference Material Louisiana Inheritance Tax By Act 818 of 1997 Louisiana repealed its inheritance tax effective July 1 2004 Between July 1 1998 and July 1 2004 the tax will be reduced in stages e Rates between July 1 1998 and July 1 2001 will be reduced by 18 e Rates between July 1 2001 and July 1 2002 will be reduced by 40 e Rat
10. of retirement benefits The federal deduction reduced by nontaxable life insurance and retirement benefits The nontaxable portion of the Nonmarital Trust reduced by nontaxable life insurance and retirement benefits The number of children 35 Estate Planning QuickView The total tax on the children s interests is the tax on each child s share multiplied by the number of children The total inheritance tax is the total tax on the spouse s interests plus the tax on the children s interests Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die The taxable portion of the retirement benefits The value of the Marital Trust if any not including any life insurance and retirement benefits that were not taxed upon the death of the first to die The number of children The total tax on the children s interests is the tax on each child s share multiplied by the number of children Tax Rates for the second to die Amount Tax 0 to 70 000 0 70 000 to 100 000 0 plus 2 over 70 000 100 000 to 200 000 600 plus 3 over 100 000 Over 200 000 3 600 plus 4 over 200 000 Tax rates for children Amount Tax 0 to 25 000 0 25 000 to 50 000 0 plus 2 over 25
11. on each child s share is calculated as follows 0 to 90 000 tax is 0 90 000 to 100 000 tax is 6 of the amount over 90 000 tax is 600 plus 7 5 of the amount over Over 100 000 100 000 For deaths in 2006 the tax on each child s share is calculated as follows 0 to 100 000 tax is 0 Over 100 000 tax is 7 5 of the amount over 100 000 55 Estate Planning QuickView Tennessee Inheritance Tax Following is a summary of how the Tennessee Inheritance Tax affects the elements of an estate plan Life Insurance Not taxable Retirement Plans Not taxable Marital Distributions Not taxable Not taxable upon the death of the first to die Subject to tax upon the death of the second to die Marital Trust Nonmarital Trust Taxable There is not an exemption for the spouse s life estate Upon the death of the first to die the taxable amount is equal to the federal taxable estate of the first to die less the single exemption described below First to Die Upon the death of the second to die the taxable amount is equal to the federal taxable estate of the second to die less the single exemption described below Second to Die Tax Rates 56 Chapter 8 Reference Material The net taxable estate is determined by subtracting a single exemption as follows
12. plus 4 over 100 000 200 000 to 815 000 6 600 plus 5 over 200 000 300 000 to 815 000 11 600 plus 6 over 300 000 Over 500 000 23 600 plus 7 over 500 000 47 Estate Planning QuickView Oklahoma Estate Tax Following is a summary of how the Oklahoma Inheritance Tax affects the elements of an estate plan Life Insurance Not taxable Benefits attributable to employer contributions are Retirement Plans exempt The program will allow you to enter a factor that will determine the percentage of taxable benefits Marital Distributions Not Taxable Marital Trust Spouse s life estate is not taxable Present value of remainder to children is taxable Spouse s life estate is not taxable Present value Nonmarital Trust of remainder to children is taxable The program allows you to enter a factor that will determine the percentage of the trust that is taxable Exemptions Year of Death Exemption Before 1999 175 000 1999 275 000 2000 475 000 2001 675 000 2002 and 2003 700 000 2004 850 000 2005 950 000 After 2005 1 000 000 48 Chapter 8 Reference Material Taxable amount upon the death of the First to Die equals The net assets of the first to die The taxable portion of retirement benefits The federal marital deduction reduced by nontaxable life insurance and retirement benefits The nontaxable
13. portion of the Marital Trust reduced by nontaxable life insurance and retirement benefits The nontaxable portion of the Nonmarital Trust reduced by nontaxable life insurance and retirement benefits The exemption described above Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die The nontaxable portion of retirement benefits The exemption described above Tax Rates Amount Tax 0 to 10 000 1 10 000 to 25 000 100 plus 2 over 10 000 25 000 to 50 000 400 plus 3 over 25 000 50 000 to 100 000 1 150 plus 4 over 50 000 100 000 to 200 000 3 150 plus 5 over 100 000 200 000 to 500 000 8 150 plus 6 over 200 000 500 000 to 1 000 000 26 150 plus 7 over 500 000 1 000 000 to 1 500 000 61 150 plus 8 over 1 000 000 49 Estate Planning QuickView 1 500 000 to 2 000 000 101 150 plus 9 over 1 500 000 2 000 000 to 2 500 000 146 150 plus 10 over 2 000 000 2 500 000 to 3 000 000 196 150 plus 11 over 2 500 000 Over 3 000 000 251 150 plus 12 over 3 000 000 50 Chapter 8 Reference Material Pennsylvania Inheritance Tax Following is a summary of how the Pennsylvania Inheritance Tax affects the elements of an estate plan
14. read by two different people in two different places at the same time neither can the software be used by two different people in two different places at the same time unless of course Brentmark s copyright is being violated Limited Warranty Brentmark Software Inc warrants the physical diskette s and physical documentation enclosed herein to be free of defects in materials and workmanship for a period of sixty days from the purchase date If Brentmark receives notification within the warranty period of defects in materials or workmanship and such notification is determined by Brentmark to be correct Brentmark will replace the defective diskette s or documentation The entire and exclusive liability and remedy for breach of this Limited Warranty shall be limited to replacement of defective diskette s or documentation and shall not include or extend to any claim for or right to recover any other damages including but not limited to loss of profit data or use of the software or special incidental or consequential damages or other similar claims even if Brentmark has been specifically advised of the possibility of such damages In no event will Brentmark s liability for any damages to you or any other person ever exceed the lower of suggested list price or actual price paid for the license to use the software regardless of any form of the claim BRENTMARK SOFTWARE INC SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES EXPRESS OR IMPLIED I
15. select the abbreviation from the drop down list The program will use this abbreviation to calculate state death tax 11 Estate Planning QuickView Nontaxable Assets Section Y Include Nontaxable Assets Name or Title Nontaxable Asset Total Nontaxable Assets 0 Insurance on Husband 0 on Wife 0 on 2nd To Die 0 Input Description Include Nontaxable Assets Check Box Total Nontaxable Assets Name or Title Insurance on Husband Insurance on Wife Insurance on 2nd To Die If there are life insurance policies lifetime gifts or other assets that have already been removed from the estates of the husband and wife but you still wish to show such values in the flowcharts and other reports be sure that you select the Include Nontaxable Assets check box The program selects this check box by default Enter the value of the assets other than insurance polices that are not part of the taxable estate of either the husband or the wife that will appear as part of the estate plans This is the title that you ve specified in the Preferences box Enter the total nontaxable death benefit from insurance policies on the husband For example policies owned by an irrevocable trust Enter the total nontaxable death benefit from insurance policies on the wife For example policies owned by an irrevocable trust Enter the value of nontaxable survivorship life policies for estate tax pu
16. that were not taxed upon the death of the first to die The number of children A 25 000 exemption for each child The total tax is the tax on each child s share multiplied by the number of children Tax Rates Year of Death Amount Tax 0 to 20 000 2 1997 400 plus 3 over Over 20 000 20 000 0 to 20 000 1 64 1998 1999 2000 328 plus 2 46 over Over 20 000 20 000 0 to 20 000 1 2 2001 240 plus 1 8 over Over 20 000 20 000 0 to 20 000 08 2002 160 plus 1 2 over Over 20 000 20 000 0 to 20 000 04 40 Chapter 8 Reference Material 2003 80 plus 06 over 20 000 Over 20 000 2004 or later No Tax Maryland Inheritance Tax Following is a summary of how the Maryland Inheritance Tax affects the elements of an estate plan Life Insurance Not taxable Retirement Plans Not taxable Marital Distributions Taxable Marital Trust Taxable in full upon the death of the first to die Nonmarital Trust Taxable No exemption for spouse s life estate There is no tax on real property passing to the surviving spouse or the first 100 000 of any other property passing to the surviving spouse For simplicity it is assumed that all real estate is owned jointly so that the separate estate of the first spouse to die is entirely taxable less only the 100 000 exemptio
17. the Flowcharts For more information see Preferences later in this chapter Names Enter the first names of the couple in the Husband and Wife boxes Enter their last name in the Joint box If a husband and wife have different last names enter their full names in their respective boxes and do not enter anything in the Joint box The names that you enter here will appear throughout the program and on the printed reports Estate Planning QuickView Net Assets Life Insurance You can simplify your data entry by entering all values net of debts and estimated administration expenses When entering Net Assets enter the values of all assets other than retirement benefits and life insurance in the Joint column This includes probate assets and revocable trust assets When the domicile is one of the community property states Arizona California Idaho Louisiana Nevada New Mexico Texas Washington or Wisconsin the program divides these assets equally between the husband s separate estate and the wife s separate estate upon the death of the first to die In non community property states all joint assets pass to the survivor except in plans that make use of the unified credit In such cases the remainder of the joint assets after credits have been titled pass to the estate of the survivor To enter Gross Assets see Gross Assets Box later in this chapter Enter the total death benefits payable on all life insurance tha
18. 000 50 000 to 75 000 500 plus 3 over 50 000 75 000 to 100 000 1 250 plus 4 over 75 000 100 000 to 200 000 2 250 plus 5 over 100 000 Over 200 000 7 250 plus 6 over 200 000 36 Chapter 8 Reference Material Indiana Inheritance Tax Following is a summary of how the Indiana Inheritance Tax affects the elements of an estate plan Life Insurance Not taxable Retirement Plans Taxable Marital Distributions Wot Taxable Marital Trust Not taxable upon the death of the first to die Taxable upon the death of the second to die Spouse s life estate is not taxable The present Nonmarital Trust value of the remainder to children is taxable The program allows you to enter a factor that will determine the percentage of the trust that is taxable For deaths after 6 30 98 there is a 100 000 exemption for each child or lineal descendant Taxable amount for each child upon the death of the First to Die The net assets of the first to die The retirement benefits of the first to die The federal marital education reduced by nontaxable life insurance The nontaxable portion of the Nonmarital Trust reduced by nontaxable life insurance and retirement benefits The number of children 100 000 exemption for each child 37 Estate Planning QuickView The total tax is the tax on each child s share multiplied by the
19. 000 to 2 000 000 555 800 plus 45 over 1 500 000 2 000 000 to 2 500 000 780 800 plus 49 over 2 000 000 2 500 000 to 3 000 000 1025 800 plus 53 over 2 500 000 Over 3 000 000 1 290 800 plus 55 over 3 000 000 Under the Economic Growth and Tax Relief Reconciliation Act of 2001 the maximum estate and gift tax rate will be reduced to 50 in 2002 with no additional 5 tax and will decline by 1 each year after that until the maximum rate is 45 in 2007 Unified Credit Under the Economic Growth and Tax Relief Reconciliation Act of 2001 the estate tax unified credit is scheduled to increase by steps each year until 2009 from 600 000 to 3 500 000 as follows Year Exclusion Credit 1997 600 000 192 800 1998 625 000 202 050 1999 650 000 211 300 2000 675 000 220 550 30 Chapter 8 Reference Material 2001 675 000 220 550 2002 1 000 000 345 800 2003 1 000 000 345 800 2004 1 500 000 555 800 2005 1 500 000 555 800 2006 2 000 000 780 800 2007 2 000 000 780 800 2008 2 000 000 780 800 2009 3 500 000 1 455 800 State Death Tax Calculations Every state imposes a death tax at least equal to the state death tax credit allowed in determining the federal estate tax and 13 states in 2000 impose an independent inheritance succession or estate tax on transfers to spouses or heirs beneficia
20. 235 ses scie IR ER SUE nn 25 26 Retirement Benefits 15 Retirement Plans ssss 11 S South Dakota Inheritance Tax 51 Spreadsheet File eter 26 Staind 11 State Death Tax 15 27 30 State puts ii cie 15 E SD RS 9 Summary Reports esses 21 T Taxable Gifts eee 11 BARES asc A TAA 21 Technical Support sita 57 Tennessee Inheritance Tax 55 Text Fleece RE E 26 Three Year Rule 10 13 MEL eS 12 Title Bataa uran e a 3 ToOlbaE er dette ree re eR 4 U Unified Credit 28 20 Uninstalling ceci eoe aetas 1 Y MA AAE E es sn E de 13 Year of First Death 11 Year of Second Death 11 Z ZOOM st noscere it it 26 64
21. 40 000 to 7 040 000 522 800 plus 12 8 over 6 040 000 7 040 000 to 8 040 000 650 800 plus 13 6 over 7 040 000 8 040 000 to 9 040 000 786 800 plus 14 4 over 8 040 000 9 040 000 to 10 040 000 930 800 plus 15 2 over 9 040 000 32 Chapter 8 Reference Material Over 10 040 000 1 082 800 plus 16 over 10 040 000 Under the Economic Growth and Tax Relief Reconciliation Act of 2001 the state death tax credit will be reduced by 25 in 2002 by 50 in 2003 by 75 in 2004 and eliminated in 2005 when estates will be allowed a deduction not a credit for state death taxes paid Connecticut Succession Tax Connecticut is phasing out its succession tax beginning in 1997 and ending with a complete repeal in 2005 The tax table is the same but there is an increasing exemption each year 250 000 in 1997 500 000 in 1998 800 000 in 1999 and 2 000 000 in 2000After 2000 there is no tax on property passing to a spouse child or grandchild although the taxes on other classes of beneficiaries not calculated by Estate Planning QuickView continues until 2005 Following is a summary of how the Connecticut Succession Tax affects the elements of an estate plan Life Insurance Not taxable Retirement Plans 2n Benefits attributable to employer contributions are exempt The program allows you to enter a factor that will determine the percentage of benefits taxable Marital Distributions Mari
22. Both Unified Credits Unified Credit By Pass Trust with Marital Trust These plans are similar to plans 3 and 11 but the program will automatically shift assets in the following ways e From the spouse with the larger estate to the spouse with the smaller estate e From jointly owned assets to the spouse with the smaller estate The program only shifts enough assets necessary to give both spouses the ability to fund a unified credit or by pass trust regardless of who should die first As in Plans 3 and 11 the decedent s assets life insurance and retirement benefits are divided between a nonmarital unified credit or by pass trust and a marital trust qualifying for the marital deduction in accordance with a unified credit or optimum marital deduction formula Such a formula is intended to reduce the federal estate tax to the lowest possible amount taking into account both the unified credit and the state death tax credit if a state death tax is otherwise payable 18 Chapter 5 Viewing the Estate Plans Plans 5 and 12 Plans 6 and 13 Transfers of all Life Insurance to Irrevocable Trusts These plans are similar to plans 3 and 11 But the program will automatically transfer all life insurance including both life insurance owned by the spouse and joint or second to die insurance into an irrevocable life insurance trust that is no longer part of the taxable estates of the husband or the wife However if death occurs
23. Estate Planning QuickView Software and User Manual Copyright O 1998 2001 Brentmark Software Inc Leimberg amp LeClair Inc All Rights Reserved September 5 2001 Brentmark Software Inc 3505 Lake Lynda Drive Suite 212 Orlando FL 32817 8327 Sales 1 800 879 6665 Technical Support 1 407 306 6160 Fax 1 407 306 6107 www brentmark com sales brentmark com support Brentmark com comments brentmark com Table of Contents Chapter 1 Getting Started siccccsccsisasvessncccasnsdcccsuccsdeccusscesessessscaceseecccgascesesevessecsonsscedeveunsoossedecseceedessesesscsecessnsses 1 Installing the Pro rani a tia ines a tut pl o fa e 1 Uninstalling the Program lt a enact rp pras atlas du a eels 1 Chapter 2 Introducing Estate Planning Quick View scssssccssssccssssessssccssssscsssssssscssssssssssssssessessessssssscees 3 Welcome to Estate Planning Quick View eese enne 3 Whatdo See on the Screefi sistas a iaa 3 TES ES RC oT M Pr EU E led 3 Menu Batir A A A A ada 4 Aoi o a it ain 4 Client Data SECO ti A ete e E RE SPONTE CURRO 4 Summary Results and Help Instructions eee 4 Function Ko c na 5 Chapter 3 Working With Files e E Q 7 Frequently Used Procedures cie dt etc slaved on eed a Rar re e edu Ver eva 7 Cr ating a New BIO ak potes essct stb anh cx dete Lt e UE ed apes 7 Opening an Existing File asse a ANE E a do n 7 Opening QuickView 99 or earlier HIes
24. NCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE Specifically Brentmark makes no representation or warranty that the software is fit for any particular purpose and any implied warranty of merchantability is limited to the sixty day duration of the Limited Warranty covering the physical diskette s and physical documentation only and not the software and is otherwise expressly and specifically disclaimed The limited warranty gives you specific legal rights you may have others which may vary from state to state Some states do not allow the exclusion of incidental or consequential damages or the limitation on how long an implied warranty lasts so some of the above may not apply to you Governing Law and General Provisions The License Statement and Limited Warranty shall be construed interpreted and governed by the laws of the State of Florida and any action hereunder shall be brought only in Florida If any provision is found void invalid or unenforceable it will not affect the validity of the balance of this License and Limited Warranty which shall remain valid and enforceable according to its terms If any remedy hereunder is determined to have failed of its essential purpose all limitations of liability and exclusion of damages set forth herein shall remain in full force and effect This License and Limited Warranty may only be modified in writing signed by you and a specifically authori
25. Year Exemption 1997 600 000 1998 625 000 1999 650 000 2000 675 000 2001 675 000 2002 700 000 2003 700 000 2004 850 000 2005 950 000 2005 1 000 000 The tax is computed from the net taxable estate as follows Amount Tax 0 to 40 000 5 5 40 000 to 240 000 2 200 plus 6 5 over 40 000 240 000 to 440 000 15 200 plus 7 5 over 240 000 Over 440 000 30 200 plus 9 5 over 440 000 57 Chapter 9 Getting Help If you need help it s easy to find Click the question mark on the toolbar and a Help topic appears Also use the Help menu and the Help System If you still need help Brentmark provides technical support Help Menu Use the Help menu on the Menu bar to access the Help system learn how to use Help or view information about this product and other Brentmark products Help System The program provides a complete Help system so you can get help whenever you need it Just click the question mark that appears on the toolbar Use the Help system s Table of Contents to view Help topics by category or search the Help index for specific terms Technical Support Technical Support is available by telephone fax e mail or postal mail If you have questions concerning program calculations please have a list of your exact data entry values available when contacting us Telephone Assistance by telephone is available Monday through Friday between 9 00 AM and 6 00PM Eastern St
26. also select to print the date and time on your reports To format your reports you will use the Report Options window Accessing the Report Options Window e On the File menu click Report Options Creating a Heading for a Report 1 In the Report Options window click the Heading box 2 Type the text that you want to display at the top of your printed report Formatting Page Margins You will format page margins using the Page Margins group box in the Report Options window The Page Margins group box contains boxes for you to enter top bottom left and right page margins e In the Page Margins group box enter the Top Left Bottom and Right margin settings in inches Formatting the Text of a Report You will format the text of your reports using the Fonts group box in the Report Options window The Fonts group box contains three types of text to format Title Body Text and Headers The name of the font and its size appear next to each type The text appears in the same color as it will on the printed report 1 In the Fonts group box click the text Title Body Text or Headers that you want to format The Font dialog box appears 2 Format the Font Style Size and Effects of the text and click OK 3 Notice the description of the text in the Report Options window has changed 23 Estate Planning QuickView Printing the Date and Time Use the Printing Options group box in the Report Options window if you w
27. am applies the same growth rate to the taxes at the first death when totaling the taxes This way the total reflects the true economic cost of the taxes paid at the first death Federal Estate Tax Calculations Death Taxes always reflect the sum of the federal estate tax and any state death tax that may be imposed Under the Economic Growth and Tax Relief Reconciliation Act of 2001 the state death tax credit will be reduced by 25 in 2002 by 50 in 2003 by 75 in 2004 and eliminated in 2005 when estates will be allowed a deduction not a credit for state death taxes paid Of the states that impose death taxes that are supposed to be equal to the 27 Estate Planning QuickView credit thirteen seem to have defined the amount of the credit based on federal tax law as it existed on a particular date before the enactment of EGTRRA In those states Arizona Georgia Iowa Kansas Maine Minnesota New York North Carolina Rhode Island South Carolina South Dakota Virginia and Washington the state death tax may exceed the credit beginning in 2002 Because these laws may change over the next year or two and to provide flexibility the user must specify as a Preference whether or not the state death tax will conform to the federal credit Every state imposes a death tax at least equal to the state death tax credit allowed in determining the federal estate tax and 10 states in 2001 impose an independent inheritance success
28. andard Time at 407 306 6160 Fax For assistance by fax send your fax to 407 306 6107 E mail For assistance via e mail send your questions and comments to support brentmark com 59 Estate Planning QuickView Postal Mail For assistance by postal mail send your questions to the following address Brentmark Software Inc 3505 Lake Lynda Drive Suite 212 Orlando FL 32817 8327 Please include the following information in your correspondence The name to which the program is registered A contact phone number The program name and version number Your system configuration A sample printout or description of the problem A list of any error messages that have appeared 60 License Agreement This software is protected by both United States copyright law and international treaty provisions You must treat this software just like a book except that you may copy it onto a computer to be used and you may make archival copies of the software for the sole purpose of backing up our software and protecting your investment from loss You must also agree not to reverse engineer the software By saying just like a book Brentmark means for example that this software may be used by any number of people and may be freely moved from one computer location to another so long as there is no possibility of it being used at one location or on one computer while it is being used at another Just like a book cannot be
29. ant the date and time printed on reports e In the Printing Options group box click the Print Date and or Print Time check boxes Printing Page Numbers e In the Printing Options group box click the Print Page s check box Editing the Cover Page 1 On the toolbar click Final Report 2 Click the Edit Cover Page button located at the bottom of the window The Configure Report window appears 3 Click Left Center or Right to align your text on the page 4 Enter the preparer s name the company name and any additional information that should appear on the Cover Page 5 Click OK to create the Cover Page 24 Chapter 7 Printing Reports and Graphs Selecting Reports to Print Estate Planning QuickView allows you to print the following items enabling you to build a Final Report You can click as many of the following items as you like Cover Page Prints the preparer s Name Company Name and additional information of your choice You can also left align right align or center this information Summaries Prints brief descriptions of each plan including the names of the estate owners Client Data Inputs Prints the information in the Client Data section Graphs Prints the program s graphs Detailed Plan Descriptions Prints more in depth descriptions of the plans than the Summaries To see what will actually be printed on each of these reports click the Print Preview button at the bottom o
30. d 51 South Dakota Inheritance Tax ccccccccccccesssssssecececececeessnseaecececeesesessseseeeceeeeeneaees 52 Tennessee Inheritance Lax t b evo repito elato hess 56 Chapter 9 einn 59 A O E 59 lavender 59 Technical SUpport is ienten a E 59 T cense A A esee tin treten se Yee te Minas in uF esso eee eR Ue nee Uer Run Ove c e puT ee eR ere Ce esp ees 61 nro eter EN 63 lii Chapter 1 Getting Started Getting started with the Estate Planning QuickView is easy Before you install the program be sure that you re running a Windows 95 or later operating system The Estate Planning QuickView does not run on Windows 3 1 or earlier operating systems Installing the Program 1 Insert the disk into the disk drive 2 On the Windows Taskbar click the Start button On the Start menu click Run The Run dialog box appears In the Open box A setup EXE should appear If it doesn t type A setup EXE 4 Click OK 5 The setup program begins Follow the instructions in the setup program Uninstalling the Program 1 On the Windows Taskbar click the Start button 2 Point to Settings and click Control Panel The Control Panel window appears 3 Click Add Remove Programs The Add Remove Program Properties dialog box appears 4 Use the scrollbar to find the Minimum Distributions Calculator When you find it click the program title Notice that the Add Remove button is now functional 5 Click the Add Remove but
31. ed at the bottom of the window The Exporting Reports window appears 3 Click Text File or Spreadsheet File 4 Click Create File The Save As dialog box appears Save the file 26 Chapter 8 Reference Material To keep procedures free from lengthy discussions this manual refers to the following material Community Property When the domicile is one of the community property states Arizona California Idaho Louisiana Nevada New Mexico Texas Washington or Wisconsin the program treats the joint assets as community property The program divides these assets equally between the husband s separate estate and the wife s separate estate upon the death of the first to die If you have entered values as gross values instead of net the program makes the division of the community property before calculating the administrative or other expenses that are a percentage of the estate No change is made to the treatment of life insurance or retirement benefits In non community property states all joint assets pass to the survivor except in plans that make use of the unified credit In such cases the remainder of the joint assets after credits have been titled pass to the estate of the survivor Total Taxes The Total Taxes shown in the flowcharts is the total of the taxes at the first death and the second death If you have entered a growth rate and the deaths are projected to occur in different years the progr
32. ense testo etos t teste sten seta ronoccnncconeconos 25 Selecting Reports to Prato en Dica a aa usi iol tides oe Ei 25 Selecting Flowcharts to PM in 23 PEE ReDOPSS dei figs dana dan ELE E d 26 Sa A O a A 26 Printing Reports to a Text or Spreadsheet File eee 26 Chapter 8 AA m 27 Community Property sides sentitur ation pa E sy es ue E E Deb scs de luco tat iacit 27 Total Taxes E EET 27 Federal Estate Tax Calculations cc ccccccccccssessssecececececeesensecececcceesesenssaeceseceesenensnaes 27 Unified Credit Form laS ios a A aaa ert a OSI 28 Marital Ded ction de RD HE EHE ED ED GI S 29 Federal Estate Pax Rates mia daa RET THE cbe ae T d aere 29 Unified Credit om eto ee HO ent 30 State Death Tax Calc lations ias 31 State Death Tax Gredit ia ete Eee elei toe soos lavas idol diia 32 Table of Contents Connecticut Succession Taiana SHURA BS 33 Delaware Inheritance Tax ss sz sss srta titer ierit N EE NE aR 35 Indiana Inheritance Tax oooocononononononononononanononononononononcnnonononononononononononononononononononononos 37 Louisiana Inheritance Taxas tert tri 39 Maryland Inheritance AX odias ga 41 Mississippi Inhentance Lax oe dE ee gu 42 Nebraska Inheritance Tax ccccccccccccsssssssecececceeceesessssecececcesesessnseaecesecesensnsaaeeeseeeens 44 Ohio ES tate VA A DIA tite A EAT 46 Oklahoma Estate Paes ss iet ente sri e EN UNE 48 Pennsylvania Inheritance T 3x 55 i SEE eei aa
33. es between July 1 2002 and July 1 2003 will be reduced by 60 e Rates between July 1 2003 and July 1 2004 will be reduced by 80 For simplicity the program assumes that the rates in effect in the last half of each year are the rates in effect through the entire year Following is a summary of how the Louisiana Inheritance Tax affects the elements of an estate plan Life Insurance Not taxable Retirement Plans Not taxable Marital Distributions Not taxable Marital Trust l Not taxable upon the death of the first to die Taxable upon the death of the second to die Nonmarital Trust Taxable No exemption for spouse s life estate Taxable amount for each child upon the death of the First to Die The net assets of the first to die The federal marital education reduced by nontaxable life insurance and retirement plans The number of children A 25 000 exemption for each child 39 Estate Planning QuickView The total tax is the tax on each child s share multiplied by the number of children Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die The retirement benefits of the second to die The value of the Marital Trust if any not including any life insurance and retirement benefits
34. estate and the adjusted taxable gifts Before 2002 and for taxable estates between 10 000 000 and 17 184 000 there is an additional 5 imposed or a total tax rate of 60 until the benefits of the lower tax brackets have been eliminated The average tax rate is 55 Before the Taxpayer Relief Act of 1997 the 5 tax applied until the benefit of the unified credit was also eliminated This part of the 1997 Act was a technical error but Congress chose not to correct the error in the Technical Corrections Act of 1998 The unified credit and state death tax credit are deducted from the tentative tax to determine the actual federal estate tax Estate Value Tax 0 to 10 000 18 10 000 to 20 000 1 800 plus 20 over 10 000 20 000 to 40 000 3 800 plus 22 over 20 000 29 Estate Planning QuickView 40 000 to 60 000 8 200 plus 24 over 40 000 60 000 to 80 000 13 000 plus 26 over 60 000 80 000 to 100 000 18 200 plus 28 over 80 000 100 000 to 150 000 23 800 plus 30 over 100 000 150 000 to 250 000 38 800 plus 32 over 150 000 250 000 to 500 000 70 800 plus 34 over 250 000 500 000 to 750 000 155 800 plus 37 over 500 000 750 000 to 1 000 000 248 300 plus 39 over 750 000 1 000 000 to 1 250 000 345 800 plus 41 over 1 000 000 1 250 000 to 1 500 000 448 300 plus 43 over 1 250 000 1 500
35. f the window Selecting Flowcharts to Print The Select Flowcharts section contains options for selecting which flowcharts you will print In the middle of this section you will see descriptions of each of the plans Choosing the First to Die For each report description click Husband Dies First Wife Dies First or a combination of both If the first to die will be the same for every report click Select All for Husband Dies First or Select All for Wife Dies First If you want to show the most extensive set of results you can select both Select All for Husband Dies First and Select All for Wife Dies First If you do not want to print flowcharts click Deselect All 25 Estate Planning QuickView Previewing Reports After selecting and formatting reports graphs and flowcharts for printing you can preview your Final Report e Click Print Preview The Preview Reports window opens e Click Zoom to increase magnification e Click Full Page to decrease magnification e Click the arrow buttons to move through the pages of report Setting up a Printer 1 On the File menu click Print 2 In the Print Options section click Printer Setup Printing Reports to a Text or Spreadsheet File When you save a report as a text or spreadsheet file you are saving the inputs and the plan descriptions You cannot save the flowchart calculations 1 On the toolbar click Final Report 2 Click the Print to File button locat
36. federal taxable estate less the specific exemption described below under Tax Rates First to Die Upon the death of the second to die the taxable amount is the same as the federal taxable estate less the specific exemption described below under Tax Rates Second to Die Tax Rates The program calculates the taxable estate by subtracting all other deductions from the gross estate and then subtracting the following exemption Year Exemption 1997 600 000 1998 625 000 1999 650 000 2000 675 000 42 Chapter 8 Reference Material 2001 675 000 2002 700 000 2003 700 000 2004 850 000 2005 950 000 After 2005 1 000 000 The tax is calculated from the taxable estate as follows Amount Tax 0 to 60 000 1 60 000 to 100 000 600 plus 1 6 over 60 000 100 000 to 200 000 1 240 plus 2 4 over 100 000 200 000 to 400 000 3 640 plus 3 2 over 200 000 400 000 to 600 000 10 040 plus 4 over 400 000 600 000 to 800 000 18 040 plus 4 8 over 600 000 800 000 to 1 000 000 27 640 plus 5 6 over 800 000 1 000 000 to 1 500 000 38 380 plus 6 4 over 1 000 000 1 500 000 to 2 000 000 70 840 plus 7 2 over 1 500 000 2 000 000 to 2 500 000 106 840 plus 8 over 2 000 000 2 500 000 to 3 000 000 146 840 plus 8 8 over 2 500 000 3 000 000 to
37. h of the surviving spouse and 31 Estate Planning QuickView the 75 is not included in the taxable estate or taxable transfers of the spouse for the purpose of that death tax State Death Tax Credit The maximum state death tax credit is calculated from the adjusted taxable estate which is the taxable estate less 60 000 This means that adjusted taxable gifts increase the tentative tax base and federal estate tax but do not increase the state death tax credit The tax rates before 2002 are as follows Adjusted Taxable Estate Credit 0 to 90 000 0 8 of the amount over 40 000 90 000 to 140 000 400 plus 1 6 over 90 000 140 000 to 240 000 1 200 plus 2 4 over 140 000 240 000 to 440 000 3 600 plus 3 2 over 240 000 440 000 to 640 000 10 000 plus 4 over 440 000 640 000 to 840 000 18 000 plus 4 8 over 640 000 840 000 to 1 040 000 27 600 plus 5 6 over 840 000 1 040 000 to 1 540 000 38 300 plus 6 4 over 1 040 000 1 540 000 to 2 040 000 70 800 plus 7 2 over 1 540 000 2 040 000 to 2 540 000 106 800 plus 8 over 2 040 000 2 540 000 to 3 040 000 146 800 plus 8 8 over 2 540 000 3 040 000 to 3 540 000 190 800 plus 9 6 over 3 040 000 3 540 000 to 4 040 000 238 800 plus 10 4 over 3 540 000 4 040 000 to 5 040 000 290 800 plus 11 2 over 4 040 000 5 040 000 to 6 040 000 402 800 plus 12 0 over 5 040 000 6 0
38. he Husband column enter the total value of the plans that the husband is the owner or participant In the Wife column enter the total value of the plans for which the wife is the owner or participant Although retirement plan are taxable income for federal and many state income tax purposes the program does not project any federal or state income taxes on retirement plan distributions The program only uses retirement plan assets to calculate certain state death taxes Enter the total cumulative amount of post 1976 taxable gifts for both the husband and wife that is gifts in excess of the annual exclusion that do not qualify for any marital charitable or other deduction Enter the rate at which you expect the non insurance assets to grow The program does not apply growth rates to insurance policies However it does apply growth to insurance proceeds after the death of the insured If you re entering a rate of 5 enter 5 not 0 05 The sign is optional The program compounds the growth rate annually and applies it to the estates in accordance with the years of death that you have entered Enter the assumed years of death for the First to Die and the Survivor This is relevant for unified credit and other scheduled tax changes as well as the optional estate growth calculations This does not necessarily mean that the husband dies first Enter the abbreviation for the owner s state of domicile Or click the down arrow and
39. he results in the forms of flowcharts graphs or summary reports Plans 1 through 8 display cases in which the husband dies first Plans 9 through 16 display cases in which the wife dies first Plan Description Plans 1 and 8 All to Surviving Spouse Plans 2 and 9 Unified Credit By Pass Trust with Outright Marital Deduction The decedent s assets life insurance and retirement benefits are divided between a nonmarital or unified credit or by pass trust and the surviving spouse in accordance with a unified credit or optimum marital deduction formula Such a formula is intended to reduce the federal estate tax to the lowest possible amount taking into account both the unified credit and the state death tax credit if a state death tax is otherwise payable 17 Estate Planning QuickView Plans 3 and 10 Plans 4 and 11 Unified Credit By Pass Trust These plans are similar to Plans 2 and 10 but with the addition of a marital trust The decedent s assets life insurance and retirement benefits are divided between a nonmarital or unified credit or by pass trust and a marital trust qualifying for the marital deduction in accordance with a unified credit or optimum marital deduction formula Such a formula is intended to reduce the federal estate tax to the lowest possible amount taking into account both the unified credit and the state death tax credit if a state death tax is otherwise payable Marital Transfers to use
40. ion or estate tax on transfers to spouses or heirs beneficiaries that may exceed the state death tax credit The program calculates the federal estate tax based only upon the following values e Assets e Marital deduction e Unified credit e Amounts of adjusted taxable gifts e State death tax credit e Credit for gift tax paid For simplicity the program assumes that if the total taxable gifts exceed the unified credit applicable exclusion amount a gift tax was paid on the gifts in excess of the applicable exclusion amount and credit is taken for the gift tax assumed to have been paid The actual gift tax could have been more or less than the assumed gift tax depending on the timing of the gifts Unified Credit Formulas The program illustrates several estate plans that rely on a unified credit or optimum marital deduction formula This formula can be summarized as follows The largest amount if any that can pass free of federal estate tax or will result in the least possible estate tax taking into account the federal estate tax unified credit and the state death tax credit When there is no state death tax independent of the state death tax credit the nonmarital or unified credit share of the estate will be the applicable exclusion amount less any adjusted taxable gifts If there is a state death tax that is independent of the state death tax credit the calculation may become circular First the nonmarital share
41. iving spouse or minor children or a total of 21 500 in exemptions at the first death For simplicity it is assumed that all children are adults at the second death and only the 5 000 family exemption applies Taxable amount upon the death of the First to Die equals The net assets of the first to die The retirement benefits of the first to die The federal marital deduction reduced by life insurance The nontaxable portion of the Nonmarital Trust reduced by life insurance and any federal estate tax payable 44 Chapter 8 Reference Material The 21 500 family exemptions described above A 10 000 exemption for each child Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die but not including the marital Trust The retirement benefits of the second to die The 5 000 family exemption described above A 10 000 exemption for each child The federal estate tax payable if any Tax Rate 1 for children and grandchildren 45 Estate Planning QuickView Ohio Estate Tax Following is a summary of how the Ohio Estate Tax affects the elements of an estate plan Ohio has a 500 credit against tax so any Ohio tax should be reduced by 500 but not below zero
42. le has been saved Estate Planning QuickView Menu Bar The Menu bar is below the title bar The Menu bar contains three menus you use to click program commands Use the menus on the Menu bar to control your files and the program or to get Help File View Help Toolbar The toolbar is below the Menu bar The toolbar contains graphics as commands You can click these graphics instead of using the related menu bar commands Open Files Access the Web eio Save F iles Print F iles GetHelp Client Data Section The Client Data section allows you to enter the data needed to begin an analysis If you are required to enter additional data the program will prompt you to do so For instructions on entering data click here Summary Results and Help Instructions While viewing the Client Data section you can also view a summary of the results or view instructions for entering data Chapter 2 Introducing Estate Planning QuickView Function Keys Use the Function Keys for frequently used commands The Function Keys are located at the top of your keyboard Keys Descriptions F1 Access the Help system F2 Save a file F3 Open a file Also you can use the following key combinations for frequently used commands Keys Descriptions Alt S Save an existing file Save As Alt P Print a file Alt R Format a report Alt S Exit the program Alt D View client data Alt W X View the flowcharts
43. n for the interests of the surviving spouse Effective 7 1 2001 Maryland exempts from inheritance tax all property passing to children or lineal descendents Because QuickView assumes that the ultimate beneficiaries are children or lineal descendents this means there is no inheritance tax as far as QuickView is concerned First to Die Upon the first to die the taxable amount is equal to the net assets of the first to die less 100 000 but not more than the federal marital deduction reduced by life insurance and retirement benefits passing outright not in trust Second to Die Upon the death of the second to die the taxable amount is equal to the net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die Tax Rate 1 41 Estate Planning QuickView Mississippi Inheritance Tax Mississippi has repealed its inheritance tax effective for the year 2000 Following is a summary of how the Mississippi Inheritance Tax affects the elements of an estate plan Life Insurance Taxable Retirement Plans Taxable Marital Distributions Not taxable Marital Trust Not taxable upon the death of the first to die Taxable upon the death of the second to die Nonmarital Trust Taxable No exemption for spouse s life estate Upon the death of the first to die the taxable amount is the same as the
44. ne of the community property states Arizona California Idaho Louisiana Nevada New Mexico Texas Washington or Wisconsin the program divides these assets equally between the husband s separate estate and the wife s separate estate upon the death of the first to die In non community property states all joint assets pass to the survivor except in plans that make use of the unified credit In such cases the remainder of the joint assets after credits have been titled pass to the estate of the survivor This value signifies the percentage of the estate used for administrative or other expenses such as fiduciary commissions or attorney s fees The program will reduce the value of the probate estate by the percentage that you enter here Enter any debts or fixed expenses that the program should deduct from the estate If you select a state that imposes a state death tax independent of the federal estate tax and if that state requires additional information to calculate that tax a button appears to the right of the Domicile box Click the button to enter the state specific tax information that is Taxable at First Death that are Taxable Number of Children Percentage of Nonmarital Trust Percentage of Retirement Plans Steve Jo Ann 80 00 80 00 ETT E 15 Estate Planning QuickView Depending on the state enter the following information The program only allows you to enter informati
45. of 2009 rates and credits Note Plans 5 6 13 and 14 demonstrate the three year rule In these plans the program will automatically transfer all life insurance including both life insurance owned by the spouse and joint or second to die insurance into an irrevocable life insurance trust that is no longer part of the taxable estates of the husband or the wife However if death occurs within three years of the current year life insurance is pulled back into the taxable estate Gross Assets Box You can enter Gross Assets instead of Net Assets To enter Gross Assets click the blue cross located to the right of Net Assets The Asset Adjustments window appears Adjust entered asset values for administration or other expenses Probate Percentage 0 00 Debts or Fixed Expenses 0 00 14 Chapter 4 Entering Data Input Description Adjust entered asset values for administration or other expenses Probate Percentage Debts or Fixed Expenses State Inputs Window When entering gross values you can enter probate percentages and dollar amounts of debts or fixed expenses that will reduce the gross value that you enter When entering gross assets the program makes the division of the community property before calculating the administrative or other expenses that are a percentage of the estate No change is made to the treatment of life insurance or retirement benefits When the domicile is o
46. on described above by calculating the tax and then by subtracting the tax on the exemption amount Tax Rates The program bases tax rates on the following table Amount Tax 0 to 2 000 000 0 Over 2 000 000 11 44 of the amount over 1 000 000 34 Chapter 8 Reference Material Delaware Inheritan ce Tax Delaware has repealed its inheritance tax for deaths after 1998 Following is a summary of how the Delaware Inheritance Tax affects the elements of an estate plan before 1999 Life Insurance Not taxable Retirement Plans Benefits attributable to employer contributions are exempt The program allows you to enter a factor that will determine the percentage of benefits taxable Marital Distributions Not taxable Marital Trust Not taxable upon the first to die Subject to tax upon the death of the second to die Spouse s life estate is taxable at tax rates applicable to the second Nonmarital Trust to die The Present value of the remainder to children is taxable at rates to children The program allows you to enter a factor that will determine the percentage of the trust that is taxable First to Die Upon the death of the first to die the taxable amount for the surviving spouse is the nontaxable portion of the Nonmarital Trust Taxable amount for each child equals The net assets of the first to die The taxable portion
47. on specific to the state that you select Input Description Percent of Nonmarital Trust that is Taxable at First Death Percent of Retirement Benefits that are Taxable Number of Children In some states a life estate or other interests of the surviving spouse in a trust may be exempt from tax so only the value of the children s interests are taxable Enter the percentage of the unified credit or nonmarital trust that should be considered taxable upon the death of the first to die In some states only retirement benefits attributable to employee contributions are subject to tax while the benefits attributable to employer contributions are exempt from tax Enter the percentage of any retirement plan or benefits that should be considered to be taxable In some states the number of beneficiaries affects the calculation of the inheritance tax The program assumes that the children of the client s are the beneficiaries 16 Plan Descriptions Chapter 5 Viewing the Estate Plans Estate Planning QuickView generates eight different estate plans for married clients and two different estate plans for single unmarried clients In all married plans the jointly owned assets pass to the surviving spouse and become part of the estate of the surviving spouse except in community property states for which the program divides the joint assets between the estates of husband and wife as community property You can view t
48. ries that may exceed the state death tax credit If the independent state death tax is more than the credit the state imposes the tax If the independent state tax is less than the credit the state will still impose what is often called a pickup or slack tax equal to the difference so the state will still collect the full state death tax credit For simplicity the program assumes the following Each case all of the decedent s assets are subject to the death tax of the domiciliary estate that is there is no real property or tangible personal property outside of the domicile that is subject to tax in a different state Any nonmarital trust is funded first with assets subject to state death taxes and that any marital trust will qualify for any marital deduction or exemption for state death tax purposes even though the election may be separate from the federal marital deduction election Trusts funded with assets that are not taxable at the first death are not taxable at the second death because of appropriate elections partial elections division of trusts into separate trusts or other appropriate estate planning techniques For example let s say 25 of a marital trust is funded with assets subject to the state death tax and 75 is funded with life insurance or other assets that are not subject to the state death tax In such a case the program assumes that 75 of the value of the trust is still exempt from tax at the deat
49. row of flowchart boxes displays the taxes due upon the death of the second to die The last row of flowchart boxes displays the total taxes for both estates and the total value that passes to the heirs Note You can display the lines in the flowcharts in black or in red and green If you click Color Flowchart Lines on the View menu the lines will appear red and green Red lines extending from a box indicate that money being transferred is taxed Green lines extending from a box indicate that money being transferred is not taxed 20 Chapter 5 Viewing the Estate Plans Graphs The graphs display a comparison of the net assets that pass to the heir for all plans or a comparison of the total estate taxes Viewing the Graphs 1 On the toolbar click Graphs 2 Click the tabs at the top of the graph to view comparisons of plans 1 8 or plans 9 16 The active tab is white Summary Reports The summary reports list the total estate taxes and the net assets that pass to the heirs Viewing the Summary Reports e The Summary Report appears below the client data section of the program Use the scroll bar to the right of the report to view more results Click the Expand button to view the Summary Report full screen 21 Estate Planning QuickView 22 Chapter 6 Formatting Reports for Printing Estate Planning QuickView allows you to format your reports with headings personalized fonts and page margins You can
50. rposes 12 Chapter 4 Entering Data Preferences Box The Preferences box lets you enter different names for Marital Trusts Nonmarital Trusts Heirs and the Nontaxable Trust The names that you enter in the Preferences box will appear in the Flowcharts Marital Trust Marital Trust a Nonmarital Trust Heirs Nontaxable Asset Insurance Current Year 2001 Conform State Death Tax to Credit No Default Domicile AL Estate Tax Calculations amp 2009 Rates in 2009 O 2010 Repeal in 2010 O 2011 Sunset Enter the name of the marital trust An example of a marital trust is a QTIP Trust Also the Preferences box contains the Current Year box The Current Year determines growth factors and in the case of death whether or not the three year rule applies The three year rule implies that if the plan owner dies within three years of the Current Year life insurance is not removed from the estate State Credit Tax allows you to select how state death taxes that are based on the state death tax credit sometimes called slack taxes or sponge taxes will be calculated in future years Most states will follow section 2011 of the Internal Revenue Code as amended by the Economic Growth and Tax Relief Reconciliation Act of 2001 which phases out the credit from 2002 through 2004 and eliminates the credit after 2004 So for most states Phase out will be the correct preference Ho
51. s iara e tas eere eet care danca 7 S UTITUR 7 Saving an Existing File ainia dni orcas drag atadas 8 Exiting tlie Program Ai e Dorada ido Dad 8 Chapter 4 Entering Data eC 9 Client Data Seconde eter eee gas de QUER URU evade dsd sat E ies 9 Nontaxable Assets Section erre a S 12 Preterences BOX us ce eco Ete E da a LN DA a da a EA EE 13 Gross Asset BOX ti isis uid 14 State Inputs Window sesion id cada 15 Estate Planning QuickView Chapter 5 Viewing the Estate EA O 17 Plan Descriptions o6 ce oscar dimid arate iu UR d tus c Ud e 17 Floweharts td A a pa a is 20 Viewing the Flowcharts sisi dias riada 20 Reading the PO a ao e dal 20 CTA DIAS A tat ae a DO o od a 21 Viewing the rapid 21 Summa Reports 5c boe SR eo iva tus dtt M tud e tue 21 Viewing the Summary Reports 22 255 ii de Ble At BA 21 Chapter 6 Formatting Reports for Printing eee esee ee ee eee eee ee eee sten aestas ette seta aee enses aeos toes tena seas 23 Accessing the Report Options Window sese 23 Creating a Heading for a Report ini na 23 Formatting Page Marcin 0 Ai ices 23 Formatting the Text of a Repo iii a Ae eS 23 Printing the Date and Aita 24 Printing Page Numb ts 5 2 act e D ERI ERE QU RENI EIER SA ERES AR ESAE qu 24 Editino the Loera uas di odit me SI ed 24 Chapter 7 Printing Reports and Graphs Aere e eee eee e eene eene eene
52. stributions from the estate of the first to die The value of the Marital Trust if any not including any life insurance and retirement benefits that were not taxed upon the death of the first to die 51 Estate Planning QuickView Tax Rate The tax is 4 5 of the net amount passing to or for the children South Dakota Inheritance Tax South Dakota has repealed its inheritance tax effective 7 1 2001 Following is a summary of how the South Dakota Inheritance Tax affects the elements of an estate plan Life Insurance Not taxable Retirement Plans Not taxable Marital Distributions Not taxable Marital Trust Not taxable upon the death of the first to die Subject to tax upon the death of the second to die Spouse s life estate is not taxable Present value of remainder to children is taxable The program allows you to enter a factor that will determine the percentage of the trust that is taxable Nonmarital Trust South Dakota will be increasing the exemption for each child from 30 000 to 100 000 in 10 000 increments as follows for simplicity the program assumes that the rates in effect in the last half of each year are the rates in effect through the entire year Effective July 1 2000 exemption is 40 000 Effective July 1 2001 exemption is 50 000 Effective July 1 2002 exemption is 60 000 Effective July 1 2003 exemption is 70 000 Effective Jul
53. t is included in the gross estates of the husband and wife This includes all life insurance in which they have any incident of ownership such as the power to name the beneficiary of the policy or borrow against the policy In the Joint column enter the amount of total death benefits payable under any second to die life insurance payable upon the death of the survivor of the husband and wife 1f either of them have any incident of ownership in the policy Note In the case of death the Current Year determines whether or not the program applies the three year rule The three year rule implies that if the plan owner dies within three year of the Current Year life insurance is not removed from the estate In Plans 5 6 13 and 14 the program will automatically transfer all life insurance including both life insurance owned by the spouse and joint or second to die insurance into an irrevocable life insurance trust that is no longer part of the taxable estates of the husband or the wife However if death occurs within three years of the transfer the program pulls life insurance back into the taxable estate 10 Chapter 4 Entering Data Retirement Plans Adjustable Taxable Gifts Estate Growth Year of First Death Year of Second Death Domicile Enter the values of any qualified retirement plans or individual retirement accounts that will be payable to beneficiaries upon the death of the husband or wife In t
54. tal Trust Not taxable Not taxable at the first death Subject to tax at the second death Nonmarital Trust Spouse s life estate is not taxable Present value of remainder to children is taxable The program allows you to enter a factor that will determine the percentage of the trust that is taxable There is a 5 000 exemption on jointly owned bank accounts and U S Savings Bonds which is ignored in these calculations Taxable amount upon the death of the First to Die equals The net assets of the first to die The taxable portion of retirement benefits The federal deduction reduced by nontaxable life insurance and retirement benefits The nontaxable portion of the Nonmarital Trust reduced by nontaxable life insurance 33 Estate Planning QuickView and retirement benefits The program applies the exemption described above by calculating the tax and then by subtracting the tax on the exemption amount Taxable amount upon the death of the Second to Die equals The net assets of the survivor including jointly owned property and marital distributions from the estate of the first to die The taxable portion of the retirement benefits The value of the Marital Trust if any not including any life insurance and retirement benefits that were not taxed upon the death of the first to die The program applies the exempti
55. the transfer life insurance is pulled back into the taxable estate The assets and retirement benefits of the first to die are divided between a nonmarital or unified credit or by pass trust and a marital trust qualifying for the marital deduction in accordance with a unified credit or optimum marital deduction formula 19 Estate Planning QuickView Plans 7 and 14 None to Surviving Spouse None of the decedent s assets life insurance and retirement benefits are distributed to or for the surviving spouse but are instead distributed as part of the nonmarital trust not qualifying for the marital deduction ultimately passing to the children outside of the surviving spouse s estate Flowcharts The flowcharts display the results of one plan at a time From the flowcharts you can see how money passes from the owner through trusts and to the heirs The flowcharts display total taxes and the net assets that pass to the heir Viewing the Flowcharts 1 On the toolbar click Flowcharts Plan 1 appears 2 To view plans in ascending order click Next Plan To view plans in decreasing order click Previous Plan Reading the F lowcharts The first row of flowchart boxes display assets upon the death of the first to die The second row of flowchart boxes displays the taxes due upon the death of the first to die The third row of flowchart boxes represents the values upon the death of the second to die The fourth
56. ton 6 The uninstall program begins Follow the instruction in the uninstall program Estate Planning QuickView Chapter 2 Introducing Estate Planning QuickView Welcome to Estate Planning QuickView Estate Planning QuickView illustrates the relative tax advantages of several different estate planning scenarios The program displays up to eight different estate plans for married clients and two different estate plans for single unmarried clients In all plans in which a married couple has jointly owned assets such assets pass to the estate of the surviving spouse except in community property states in which the joint assets are divided between the estates of the husband and wife as community property In order for you to view results quickly and easily the program includes a number of assumptions about estate distributions and valuations This means that in some cases the program s calculations may not be entirely accurate For example although the program calculates death taxes such calculations serve as comparisons and illustrations not determinations of actual liabilities What do See on the Screen When you run the program the Estate Planning QuickView window appears Following is a description of what you see when you run the program Title Bar The title bar appears at the top of the window It contains the following information e Program title e Program version number e File name if the fi
57. wever it appears that 13 states Arizona Georgia Iowa Kansas Maine Minnesota New York North Carolina Rhode Island South Carolina South Dakota Virginia and Washington will not follow the amendment to section 2011 and will continue to impose a death tax equal to the full amount of the credit After 2004 when there is not supposed to be a credit but a deduction for state death taxes it is possible that some of those states will deduct the tax 13 Estate Planning QuickView from the taxable estate for the purpose of calculating the credit under section 2011 while other states will follow present law and not deduct its own death tax for the purpose of calculating the tax The No Phase out No Deduct preference is for those states that will not deduct their own death tax for the purpose of calculating the death tax and the No Phase out With Deduct preference is for those states that will allow a deduction for the tax in calculating the tax Default Domicile allows you to set the state input to a specific state every time the program starts Estate Tax allows you to select how future estate tax calculations under the Economic Growth and Tax Relief Reconciliation Act of 2001 will be handled 2011 Sunset to show the law as now written with repeal in 2010 and reinstatement of prior law in 2011 2010 Repeal in 2010 to assume that estate tax repeal is permanent or 2009 Rates in 2009 to show no repeal and the continuance
58. within three years of the transfer life insurance is pulled back into the taxable estate The program displays the life insurance as nontaxable assets passing to the children As in plans 3 and 11 the assets and retirement benefits of the first to die are divided between a nonmarital unified credit or by pass trust and a marital trust qualifying for the marital deduction in accordance with a unified credit or optimum marital deduction formula Such a formula reduces the federal estate tax to the lowest possible amount taking into account both the unified credit and the state death tax credit if a state death tax is otherwise payable Marital Transfers to Use both Unified Credits Transfers of all Life Insurance to Irrevocable Trusts These plans are similar to plans 5 and 13 But the program will automatically shift assets in the following ways e From the spouse with the larger estate to the spouse with the smaller estate e From jointly owned assets to the spouse with the smaller estate The program only shifts enough assets necessary to give both spouses the ability to fund a unified credit or by pass trust regardless of which should die first As in plans 5 and 13 all life insurance is transferred into an irrevocable life insurance trust that is no longer part of the taxable estates of the husband or the wife if the year of death is more than three years from the current year However if death occurs within three years of
59. y 1 2004 exemption is 80 000 Effective July 1 2005 exemption is 90 000 Effective July 1 2006 exemption is 100 000 Taxable amount upon the death of the First to Die equals The net assets of the first to die The federal marital deduction reduced by nontaxable life insurance 52 Chapter 8 Reference Material and retirement benefits The nontaxable portion of the Nonmarital Trust reduced by the life insurance and retirement benefits The number of children The program calculates total tax by multiplying the tax on each child s share by the number of children Taxable amount upon the death of the Second to Die equals The net assets of the second to die including jointly owned property and marital distributions from the estate of the first to die The value of the Marital Trust if any not including any life insurance and retirement benefits that were not taxed upon the death of the first to die The number of children The 30 000 exemption described above The program calculates total tax by multiplying the tax on each child s share by the number of children Tax Rates For deaths in 2000 the tax on each child s share is calculated as follows 0 to 40 000 tax is 0 40 000 to 50 000 tax is 3 75 of the amount over 40 000 50 000 to 100 000 tax is 375 plus 6 of the amount over tax is 3
60. zed representative of Brentmark All rights not specifically granted in this statement are reserved by Brentmark 61 Estate Planning QuickView 62 A Adjustable Taxable Gifts 11 ASSUMPLIONS esas esee ma idad nais loses 3 C Client Data Section 4 9 Community Property 10 14 2 Connecticut Succession Tax 32 COVER Page idna a da 24 Current Yeates esia eiin 13 D D ta Entry 5 ios AR 9 Date and Time etes 24 Death Laxes AA waster atia eus 27 Debts or Fixed Expenses 14 Delaware Inheritance Tax 34 Doinlclle 4E tete 11 15 E Estate Growth cados 11 Estate Tania 27 28 Exiting the Program 8 EXPENSES enses th einn ett aa ex eed Sedes 14 F Federal Estate Tax 27 28 A seda tuisasa 7 Crea ng oe aere ue T A pec 7 SAVING iii ad 7 8 EXISEXO DIOS Goo esp tests 25 PloWeliarts ados 20 25 gon f a as 23 Frequently Used Commands 5 Frequently Used Procedures 7 Function Keys e Ie ees Lone Md 5 G aei Mc DE 21 Gross SSets eese eene 14 CEC A O RAE NR REDE enean 11 H Headin Sinnen a 23 Hel 1 tee EE EEE E 13 I Indiana Inheritance Tax 36 A tC e uites 1 Insurance eee 10 11 12 on 2nd To Die ossis 12 on Husband eseeeeen 12 On Wile onun ts
Download Pdf Manuals
Related Search