CERTIFIED ESTATE AND TRUST SPECIALIST™

CES™

PROGRAM OUTLINE

OVERVIEW

The CES™ program lays a solid foundation and explains core concepts before tackling

sophisticated estate planning techniques. Materials that have been written with an eye toward

real-world situations. The content is both practical and simple to follow, unlike similar business

and law school courses. The building blocks of an effective estate plan are a will and one or

more trusts. Our estate planning education materials are written so the client can also understand

them, enhancing your services as a financial professional.

MODULE I:

INTRODUCTION TO ESTATE

PLANNING

GOALS, OBJECTIVES AND RISKS

Estate Planning Defined

Who Needs Estate Planning

Why the Interest in Estate Planning

Tools for Wealth Protection

THE ESTATE PLANNING PROCESS

Six Basic Steps

Establishing a Client/Planner Relationship

Collecting Client Information

Defining Transfer Objectives

THE ESTATE PLANNING TEAM

Unauthorized Practice of Law

ESTATE PLANNING DOCUMENTS

WILLS

Intestacy

Advantages of Wills

Limitations of Wills

Types of Wills

Legal Capacity to Execute a Will

Clauses in Wills

Sample Wills

Revoking and Changing Wills

Side Instruction Letters

Statutes Affecting Wills

Avoiding Will Contests

POWERS OF ATTORNEY

General and Limited Power of Attorney

Durable Feature / Springing Power

Power of Attorney for Property

Disadvantages of a Power of Attorney

DIRECTIVES REGARDING HEALTH CARE

Durable Power of Attorney for Health Care

Living Wills/Advance Medical Directives

Do Not Resuscitate Order (DNRs)

MODULE II:

TYPES OF PROPERTY INTEREST

PROPERTY INTERESTS

Fee Simple

Tenancy in Common

Joint Tenancy with Rights of Survivorship

Tenancy by the Entirety

Community & Separate Property in

Community Regimes

OTHER OWNERSHIP TOPICS

Partial Ownership

Legal Ownership vs. Equitable Ownership

THE PROBATE PROCESS INTRODUCTION

Testate vs. Intestate Succession

Transfer of Assets

Advantages of Probate

Disadvantages of the Probate Process

Nontraditional Relationships

THE PROBATE PROCESS

State Probate Laws

Beginning the Probate Process: Producing a

Will

The Probate Court

Personal Representatives: Executors and

Administrators

Managing and Distributing the Estate

Potential Distribution Problems

PROPERTY PASSING THROUGH PROBATE

PROPERTY PASSING OUTSIDE OF

PROBATE

State Contract Laws

State Titling Laws

State Trust Laws

GIFT TAX THE GIFT TAX SYSTEM

Historical Background and Purpose

Estate and Gift Tax Reform

CHARACTERISTICS OF A GIFT

Parties

Definition and Elements of a Gift

Consideration and Valuation

Types of Gifts

EXCLUSIONS & EXEMPTIONS

The Annual Exclusion

Split Gift Elections

Gifts of Joint and Community Property

Applicable Credits

GIFTS OF A PRESENT & FUTURE INTEREST

Present and Future Interest Gifts

The Crumney Provision

The 5/5 Lapse Rule

TRANSFERS RESULTING IN NO GIFT TAX

Transfers to Political Organizations

Qualified Transfers

Payments for Support

Payments Between Divorcing Spouses

Transfers within a Business Setting

Gifts to Spouses

Charitable Gifts

THE GIFT TAX RETURN

Form 709

Statute of Limitations

Calculation

INCOME TAX ISSUES

Donee’s Adjusted Basis

Exceptions

STRATEGIES

Achieving Client Goals with Direct Gift

Gifts of Appreciating Property

Gifts to Spouses and Minors

Single and MultiParty Gift Strategies

MODULE III:

ESTATE TAX

THE GROSS ESTATE

Decedent Owned Property

Dower Interests

Gifts Within Three Years of Death

Transfers with Retained Life Estate

Transfers Taking Effect at Death

Revocable Transfers

Annuities

Joint Interests

Powers of Appointment

Life Insurance Proceeds

Previously Allowed Marital Deduction

VALUATION OF ASSETS AT DEATH

Hard-to-Value Assets

Financial Securities

Life Insurance

Alternate Valuation Date

DETERMINING TAXABLE ESTATE

The Charitable Deduction

Unlimited Marital Deduction

DETERMINING TENTATIVE TAX

Post-1976 Taxable Gifts

Tentative Tax Base

CREDITS FROM TENTATIVE TAX

Applicable Estate Tax Credit

Credit for Tax Paid on Prior Transfers

Foreign Death Tax Credit

PAYING AND REPORTING ESTATE TAXES

Filing Requirements

Penalties

ADJUSTED BASIS TO HEIRS

IRD Assets

Heir Donor

Surviving Owner

Community Property

Rules for Years Beginning After 2009

LIFE & DEATH TRANSFERS

INTRODUCTION

Lifetime Transfers

ARM’S-LENGTH TRANSACTIONS

Sale

Installment Sale

Exchange

TRANSFERS TO LOVED ONES

Transfers Not Subject to Gift Tax

Gifts Outright and in Trust

Partial Sale-Gift Transactions

Full Consideration Transfers/Sales

Family Limited Partnerships (FLP)

TRANSFERS AT DEATH

Transfers by Will

Property Transferred at Death by Contract

Transfers at Death by Operation of Law

Charitable Transfers at Death

MODULE IV:

TRUSTS

DEFINITIONS AND PARTIES

Grantor (Trustor)

Trustee

Beneficiary

WHY USE A TRUST

Management

Creditor Protection

Split Interests in Property

Avoiding Probate (Living Trust)

Minimizing Taxes

THE RULE AGAINST PERPETUITIES

ACCOUNTING AND INCOME TAXES

Income Taxation

Gift Tax as Applied to Trusts

Inclusion/Exclusion from Gross Estate

TRUST AGREEMENT CLASSIFICATIONS

Revocable and Irrevocable Trusts

Inter Vivos and Testamentary Trusts

Standby and Pourover Trusts

Grantor Trusts

Funded and Unfunded Trusts

Simple/ and Complex Trusts

TRUSTS USED IN ESTATE PLANNING

Life Insurance Trusts (ILITs)

Bypass (Credit Shelter) Trusts

Power of Appointment Trusts

Qualified Terminable Interest Trusts

Grantor Retained Trusts

Qualified Personal Residence Trusts

Tangible Personal Property Trusts

Dynasty and Grantor Trusts

Trusts for Minors

Crumney and Totten Trusts

Charitable and Blind Trusts

CHARITABLE GIVING

INTRODUCTION

Contribution and Taxation Issues

Qualifying Organizations

Types of Charities

CHARITABLE GIFTS DURING LIFE

Gifts of Cash, Services and Property

Contribution Base Limitations

Choosing Adjusted Basis over FMV

Valuation, Record Keeping and Reporting

OTHER OUTRIGHT GIFTS TO CHARITY

Bargain Sales of Property to Charities

Bargain Sales of Appreciated Property

Charitable Gift Annuities

Encumbered Properties

Gifts of Life Insurance to Charities

Group Term Life Insurance

CHARITABLE GIFTS OF A SPLIT INTEREST

Pooled Income Funds

Charitable Remainder Annuity Trust

Charitable Remainder Unitrust

Gift and Remainder Interest Calculation

CRT and Insurance for Wealth Replacement

Charitable Lead Trusts

ADVANCED PLANNING TOPICS

Tangible Property

Community Property

Choosing Between the CRAT or the CRUT

Reformation of Disqualified Split Interests

MODULE V:

UNLIMITED MARITAL DEDUCTION

DEDUCTION DEFINED

The Single Economic Unit

Advantages and Requirements of the UMD

Limitations

UMD QUALIFICATION

Inclusion in Decedent’s Gross Estate

Property Transferred to Surviving Spouse

Terminable Interest Rule

OUTRIGHT SPOUSAL BEQUESTS

Limiting a Direct Transfer

QTIP TRUSTS

Qualifying as a QTIP Trust

Lifetime Transfer Device

Estate Taxes

PLANNING FOR NONCITIZEN SPOUSE

Qualified Domestic Trust

ALTERNATIVES TO QUALIFICATION

Over- and Under-qualification

Bypass Trust

Common Trust Arrangements

Disclaimers

Irrevocable Life Insurance Trusts

LIFE INSURANCE

OBJECTIVE OF LIFE INSURANCE

Protect Income Stream for Beneficiaries

A Source of Funds for Education

Provide Liquidity at Death

Retirement Income

Create or Sustain Family Wealth

TYPES

Term and Whole Life Insurance

Universal and Variable Universal Life

First- and Second-to-Die

PARTIES TO A LIFE POLICY

Owner

Insured

Beneficiary

TAX TREATMENT OF LIFE INSURANCE

Transfer for Value

Settlement or Cash Surrender

Policy Dividends and Loans

MECs and 1035 Exchanges

Accelerated Death Benefits

GIFT TAX TREATMENT

Changing Beneficiaries

Outright Gift

Gifts of Premiums

Gifts of Life Insurance

ESTATE TAX TREATMENT OF INSURANCE

Insurance on Someone Else’s Life

Insurance on Insured/Decedent’s Life

Three-Year Look Back Rule

CREATION OF LIFE INSURANCE TRUST

Using Annual Exclusion

Other Objectives

MODULE VI:

POST MORTEM PLANNING

LIQUIDITY NEEDS

Last Medical Costs

Funeral and Administrative Costs

Transition/Adjustment Period Costs

Income, and Estate Taxes

Generation-Skipping Transfer Taxes

LIQUIDITY SOURCES AND IMPLICATIONS

Sale of Assets

Life Insurance

Tax-Advantaged Accounts

Closely Held Businesses

Distribution of Assets

Loans for Taxes and Other Costs

DECEDENT’S FINAL INCOME TAX RETURN

Joint or Separate Final Return

Passive Losses

Expense Elections

ESTATE FIDUCIARY INCOME TAX RETURN

Selection of Tax Year

Expense Elections

Waiver of Executor’s Fees

Income in Respect of Decedent

Distributions and Tax Bracket Analysis

GIFT TAX ISSUES

Election to Split Gifts in Year of Death

POST MORTEM PLANNING

Valuation of Assets

Selection of Valuation Date

Alternate Valuation Date

Installment Payments

Special Use Valuation

QTIP and QDOT Election

Generation-Skipping Transfer Tax Elections

GENERATION TRANSFERS

GENERATION-SKIPPING TRANSFERS

Transferor and Transferee

Qualified Disclaimers

TAXABLE TRANSFERS

Direct Skip

Taxable Termination and Distributions

Filing Requirements and Returns

INTRODUCTION TO DYNASTY TRUSTS

Rule Against Perpetuities

Taxation of Dynasty Trusts

Basic Structure and Types of Dynasty Trusts

Dynasty Trusts and Business Planning

Types and Funding of Dynasty Trusts

Drafting Issues

BASIC ESTATE PLAN

ESTATE PLANNING PROCESS

Determine Client’s Financial Situation

Develop Estate Plan

Implementation and Monitoring

Comprehensive Case Example