Wills, Trusts, and Estates
FIN 4004
Spring, 2013
CRN 13341
(MW 4:00-5:15pm)

Jason Bryan Malone, Esq.
2117 Pamplin Hall
Email: jbmalone@vt.edu
Office Hours: MW 12:10pm-1:10pm
(Additional hours will be posted on Scholar throughout the semester)
(Please feel free to make an appointment or come by during other times)

Text: Estate Planning for Financial Planners, 6th ed., Michael A. Dalton and Thomas P. Langdon

Course Description:
Estate Planning focuses on the efficient conservation and transfer of wealth, consistent with the client’s goals. It is a study of the legal, financial and non-financial aspects of this process, covering topics such as trusts, wills, probate, advanced directives, charitable giving, wealth transfers and related taxes.

Course Objectives:
At the end of this course, the student should be able to understand, explain, analyze and evaluate estate planning needs and taxation in order to recommend appropriate techniques for meeting estate planning and objectives, including without limitation: • Determine client estate planning needs and objectives, taking into account financial and non-financial (behavioral/social/emotional) aspects of estate planning • Understand the effects of the lack of estate planning, including state laws of intestacy • Project estate taxation and liquidity needs in various situations • Recommend appropriate and efficient methods of wealth transfer for a client’s situation, including, without limitation, ➢ lifetime gifting strategies and taxation ➢ planning for minors ➢ incapacity planning ➢ pre-mature death planning ➢ planning in anticipation of marriage ➢ planning related to divorce ➢ planning related to tax-favored retirement assets ➢ planning for non-citizen spouse ➢ planning for adequate liquidity ➢ planning to conserve assets and minimize expenses, including taxes • Understand, analyze and evaluate client need for various estate documents, including wills, trusts, powers of appointment and medical directives • Recommend appropriate life insurance arrangements • Be able to explain the probate system, including its purpose and its pros and cons • Recommend appropriate titling of assets to meet estate planning and other objectives • Understand and recommend appropriate techniques for charitable giving during life and as part of an estate plan • Recommend estate planning techniques for traditional and non-traditional families, relationships and needs • Recommend planning techniques for married couples, including pre-nuptial agreements and use of trusts • Recommend planning techniques for owners of closely-held businesses and farms and ranches • Recommend planning techniques for multi-generational planning • Recommend techniques to mitigate post-death problems for survivors of the decedent, including pre-death planning techniques, planning for income adequacy and post-mortem planning techniques such as qualified disclaimers • Evaluate a client’s situation and available estate planning strategies and techniques to recommend an appropriate/the most appropriate plan to meet client objectives; monitor and recommend modifications based on changing circumstances • Evaluate possible future changes in the client’s situation and legal/tax situation to provide forward-looking estate planning advice • Learn to work appropriately with other members of the client’s estate planning team

Note: The periodic changes and uncertainties of federal transfer taxes (Federal estate tax and Generation-skipping transfer taxes) and some state tax systems create an ever changing environment for estate planning. Students will be expected to know and apply techniques appropriate to today’s tax climate, as well as the potential tax situation in future years, according to legislation currently in place.

Finance 4004 is just one of the courses offered by Virginia Tech that is intended to prepare students for career opportunities as a Certified Financial Planner. Estate planning principles account for approximately 15% of the subject matter that is tested on the CFP exam.

Completing this course does NOT enable one to render legal advice or perform certain legal functions for others.

Class Expectations:
The class format will be a combination of lecture and discussion. I respect your abilities and intelligence, and will try not to needlessly repeat information that you can read in the textbook. However, I will highlight principals of law that are in the textbook and expand upon legal doctrines. This means that you are still responsible for information in the book that is not specifically discussed in class and for material discussed in class that may not be in the book.

I also expect you to volunteer ideas and raise questions to further explore the material. This will assist me in probing your understanding and comfort with the material while increasing your own understanding through active learning. Additionally, if you are interested in a particular aspect of your reading or the discussion, please feel free to email me such topics that are related to the course and I can mention them in the main lecture or during office hour discussions. I will also post my presentation materials on Scholar for your reference.

Office Hours and Communications:
I will strive to be available to you as much as possible. However, the above stated office hours are subject to change given unavoidable circumstances. Short absences will be posted on the door and major changes will be announced in class or on Scholar. Feel free to stop by during hours that are not my regularly posted office hours. These hours are, however, often scheduled for other meetings and activities it is often better to make an appointment so that you are sure that I am available to meet with you at that time.

I do check my Virginia Tech email regularly; however, emails are sometimes lost or deleted by spam filters so if you have not received a response from me within 24 hours, resend your email or call my office. If you are in need an immediate response call or stop by my office.

Grading:
There will be 3 exams.

If you miss an exam without a documented (that means a verifiable document from the authorities responsible for your absence) pre-approved (that means before the exam) excuse (clear and convincing proof of “emergency” circumstances is mandatory and the right to excuse is in my sole discretion) you will receive a zero.

The exams will be given at the times stated below and at no others, for any reason. Should the University close at a time an exam is scheduled the exam will be given at the very next class and at no other.

If an absence of the kind contemplated in the preceding paragraphs does occur, it is your responsibility to contact the appropriate University authorities, such as the Office of Student Life or the Student Health Center, to verify the emergency nature of your absence.

If you qualify for accommodated testing please be aware that it is your responsibility to present the proper documentation regarding such to me at least 72 hours prior to the exam you require accommodations for.

25% Exam 1
35% Exam 2
40% Final Exam

Rounding is as follows: .5 and greater is rounded up to the next point, .49 and less is rounded down to the next point. Rounding will take place at the final grade stage of the calculation only. Please be aware that your grade is not negotiable under any circumstances and any efforts to the contrary will not be recognized.

Grading Scale: 93 -100 A 90 - 92 A- 87 - 89 B+ 83 - 86 B 80 - 82 B- 77 - 79 C+ 73 - 76 C 70 - 72 C- 67 - 69 D+ 63 - 66 D 60 - 62 D- 0 - 59 F

Extra Credit:
It is at the discretion of the Instructor as to how much or even if extra credit will be offered. Therefore, there is no guarantee that any extra credit will be given. Extra credit can be given in any form the Instructor chooses. Any extra credit points will be added to the following exam’s score. There is no “makeup” of extra credit opportunities regardless of the excuse.

Academic Integrity:
By accepting admission to Virginia Tech, each student has consented to understand, support, and abide by the University Honor Code without compromise or exception. Academic integrity, as set forth in the Student Handbook, should be maintained at all times. Integrity and honesty in the classroom is essential and is a precursor to professional ethical standards.

Class Schedule and Reading Assignments

The reading assignments should be completed in the week they are listed. Please note that this schedule is flexible, and as is the case in most classes, the topics can go over into the next scheduled class. If there are any large changes they will be announced in class and posted on Scholar. I will also talk about each assignment in class, and what cases and sections to pay particular attention to, and what sections we might skip until a later date. There may be a few outside readings posted to Scholar from time to time.

January 23
Introduce the Course

January 28 – 30 Chapter 1
Estate Planning process Defining Estate Planning History of Estate Planning Why is Estate Planning Important Estate Planning Process Laws Governing Estate Planning Unauthorized Practice of Law General explanation of Transfer Taxes: Estate and Gift Taxes

February 4 – 6 Chapter 3, 4
Property Interests Real Property v. Personal Property Legal v. Equitable ownership Fee Simple, Life Estate, Contingent Remainders, Vested Remainders TC, JT, TE Community Property v. Non-community Property
Fiduciaries/Fiduciary duty
Probate
Testate v. Intestate Executor v. Administrator Probate Property v. Nonprobate Property Probate Process Advantages and Disadvantages Ancillary Probate

February 11 – 13 Chapter 2
Basic Estate Planning Documents Power of Attorney (Defined) Medical directives (Defined) Wills (Defined) Trusts (Defined) Will substitutes (Defined) Buy-sell agreements (Defined)
Medial directives Living wills Health care proxy/Medical power of attorney Do not resuscitate order (DNRs)
Powers of Attorney
Powers of Appointment

February 18 – 20 Chapter 8
Wills
Types of Wills Statutory v. Holographic v. Nuncupative Reciprocal/Mutual Will v. Joint Will Legal requirements Modifying Revoking Clauses in a Will Ways to contest a will Capacity Undue influence
Trusts
Explained Elements of a trust When trusts are used How trusts are created How trusts are administered Choice of trustee Clauses in a trust Tax implications of trusts

February 25 – 27 Types of trusts Inter Vivos v. testamentary Revocable v. Irrevocable Revocable living trust Pour-over trust Spendthrift trust Inter Vivos Revocable trust Inter Vivos Irrevocable trust A-B trust/Bypass trust Marital trust Qualified terminable-interest property (QTIP) trust Power of appointment trust Qualifying domestic trust Pour-over trust Trusts for minors §2503(b) trust §2503(c) trust Grantor Retained Interest Trusts Grantor-retained annuity trusts (GRATs) Grantor-retained unitrusts (GRUTs) Qualified personal residence trusts (QPRTs) Common Law Grantor Retained Income trust Charitable Trusts Charitable Remainder Trusts Unitrusts (CRUTs) Annuity trusts (CRATs) Charitable Lead Trusts Unitrusts (CLUTs) Annuity trusts (CLATs) Irrevocable life insurance trust (ILIT) Qualified domestic trust (QDOT) Tangible personal property trust (TPPT) Nontrusts Totten trust

March 4 – 6
Review – Exam 1

March 18 – 20 Chapter 6
General Tax Principals that affect estate planning Estate tax Gift tax Generation-skipping transfer tax Income tax
History of transfer taxes
Current tax climate
Federal Estate Tax Valuation for estate tax purposes Estate Tax calculation Gross Estate Adjusted Gross Estate Taxable Estate Tentative Tax Estate Tax Liability Reporting IRS Form 706

March 25 – 27 Chapter 5
Gift Tax Gift defined Valuation for gift tax purposes Exemptions and Exclusions from gift tax Transfers not subject to the gift tax Present and future interest gifts Income tax issues Gift tax calculation Reporting IRS Form 709

April 1 – 3 Chapter 13
Generation-Skipping Transfer Tax (GSTT) Types of transfers subject to the GSTT Exemptions and exclusions to the GSTT
Estate planning techniques to decrease tax liability

April 8 – 10
Review – Exam 2

April 15 – 17 Chapters 7, 10
Advanced Planning Tools Transfers during life & at death Unlimited Marital Deduction

April 22 – 24 Chapters 9 Charitable Giving

April 29 – May 1 Chapters 11, 12 Insurance
Postmortem Estate Planning Techniques

May 6 – 8
Review

Final Exam
3:25pm - 5:25pm, May 14 in the regularly scheduled classroom.

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