The Best Tips & Techniques
for Estate Planning
What Doctors Need to Know
Matthew Tuttle & Adam Chodos
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Slide 2
About the Webinar Speakers
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About Matthew Tuttle, CFP, & Adam Chodos, JD, CPA
Matthew Tuttle is the author of “How Harvard & Yale Beat the Market” and “Financial Secrets of my
Wealthy Grandparents”. He is also the co-author of the “CPAs Guide to Life Insurance” and a contributor
to the “Life Insurance Answer Book”. Matthew is a frequent guest on Fox Business News, CNBC, and
Fox News, and he is frequently quoted in the Wall Street Journal, NY Times, SmartMoney, and many
other publications.
Adam Chodos focuses on advising significant families and businesses on asset protection, advanced
estate planning, and taxation. Previously, he focused on asset protection and taxation at the New York
headquarters of Brown and Wood, LLP (n.k.a Sidley Austin Brown & Wood) and with Ernst & Young, LLP
consulting department. He holds a Certified Public Accountancy Certificate. Mr. Chodos is also a
frequent speaker and author for professional and business organizations, including, Morgan Stanley
Smith Barney Roundtable, Citi Smith Barney Conferences, NY Society of Security Analysts, The
Financial Planning Association, Estate Planning Council of Westchester, and New York University
Executive Forum.
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 3
Overview
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Why Estate Planning & Asset Protection is Important for Doctors now
1. Tax rules have changed significantly and more changes are anticipated.
2. Family structures increasingly complicated
3. Most plans have significant gaps of which family is unaware
4. Lawsuits are increasing in number and variety of theories
5. Doctors are a common target
6. Unrealistic expectations of patients lead to more perceived liability
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 4
What to Know
1. Estate planning is not a will or any other document/technique, but a holistic
approach to address incapacity, death, asset disposition, and financial structure.
2. Documents should match goals, rather than a "package"
3. Flexibility of structure is paramount as circumstances and laws change
4. Topics to consider include minor children, replacement income, tax minimization,
probate/lawyer minimization, potential for second marriages, changing tax rules,
adaptability, back up affairs management, minimizing family disputes, perpetuation
of values.
5. A modest plan is better than no plan.
6. Asset protection should be part of your estate plan
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 5
Tips & Techniques
1. Imperfect choices for guardians, trustees etc. is better than no choices
2. Most people have no estate plan in place (~75%) and while most do not become
horror stories, they are very unpleasant, cause much unnecessary time and
expense, and usually doesn't match family goals.
3. Life insurance is usually underutilized - it is an inexpensive way to replace income
to family members.
4. Trusts (within a will or otherwise) are often too rigid and lose much of the asset
protection and tax planning benefits they could have achieved.
5. Even though taxes change, well prepared documents can address the tax changes
without needing to be redone.
6. Entities and asset segregation should be utilized for asset protection
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 6
Tips & Techniques
•
Imperfect choices for guardians, trustees etc. is better than no
choices
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•
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Don’t put this off, make your best choice and keep it updated constantly
Be careful of corporate trustees-- Community banks and large financial
services companies
Consider a trust protector
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 7
Tips & Techniques
•
Most people have no estate plan in place (~75%) and while most do
not become horror stories, they are very unpleasant, cause much
unnecessary time and expense, and usually doesn't match family
goals.
•
Family meetings
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Don’t ignore estate taxes
•
Don’t assume that today’s rates will last forever
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Consider an ethical will
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 8
Tips & Techniques
•
Life insurance is usually underutilized - it is an inexpensive way to
replace income to family members
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Life insurance is often oversold, but sometimes it is necessary
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Make sure insurance is owned by a trust or some other entity
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Consider premium financing if you qualify
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 9
Tips & Techniques
•
Trusts (within a will or otherwise) are often too rigid and lose much of
the asset protection and tax planning benefits they could have
achieved.
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Meld asset protection planning with estate planning when designing trusts
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Don’t assume a living trust will protect from estate taxes
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Make sure you have disclaimers in marital trusts
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Make sure you use supplemental needs trusts if you have disabled beneficiaries
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Consider spendthrifts, divorces, predators, and creditors
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 10
Tips & Techniques
•
Even though taxes change, well prepared documents can address
the tax changes without needing to be redone.
•
Tax laws are constantly changing, flexibility is the key or you will make your attorney
rich
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 11
Tips & Techniques
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Consider entities and asset segregation
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Maintain formalities
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Use techniques in combination to achieve better results
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Planning most effective in advance; much more limited when a claim is on the
horizon.
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 12
Case Studies
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•
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Case Study # 1 – Dr. A wanted to do some estate planning, get asset protection, and
tax deduct his life insurance. He decided on a 419 Plan. He got audited, paid
penalties, lost his deductions, and still hasn’t been able to unwind the plan.
Case Study #2 – Dr. B in his estate plan made a community bank and a financial
incompetent relative the trustees on his trust. His trust ended up declining more than
50% during a major bull market due to mis-management.
Case Study # 3 – Dr. C. has a $2mm estate and is married. An insurance agent got
him to buy $3mm of expensive whole life insurance for estate planning even thought it
is likely he will never have a liability.
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 12
Misconceptions
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1. A will or a trust is a simple process that shouldn’t require that much time and effort
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2. Once you put your estate plan together you usually don’t need to review it
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3. Moving money to your spouse is enough asset protection
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4. The $5mm estate tax exemption is permanent
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.
Slide 14
Conclusions
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If you don’t have an estate plan now, get one
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If you do have an estate plan now, review it in light of the law changes
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Don’t ignore asset protection
The Best Tips & Techniques for Estate Planning
Matthew Tuttle & Adam Chodos
www.ExecSense.com © ExecSense, Inc.