life planning - pechanga-nsn.gov

LIFE PLANNING

September 5, 2019

Do you want to be buried in pink sequin bell bottoms, carried out to the tune of “Driving in my Indian

Car”?

Does anything you own have sentimental value – no cash/money value? (A worn but beautiful

gourd rattle handed down from grandpa? A turkey platter you ate many meals on? A life-

size Lego masterpiece you built with your granddaughter?)

Do you have children under the age of 18 or adult dependents?

Do you have tribal land?

ICE BREAKER: Who will get my casino player

points?

What’s with the Binder?

Part 1: What is the purpose of an estate?

Our Moderator:Michele Fahley, Deputy General Counsel

Pechanga Band of Luiseño Indians

Our Speaker: Yolanda Umeda, Trust Review Board

Pechanga Band of Luiseño Indians

Assets

Dependents

WillMy Wishes

Insurance

My Care

Life Planning

Binder Activity

Part 1: Journal your wishes, do you want a traditional Luiseno ceremony or something else?

Part 2: What is your property and how is it

titled?

Our Speaker: Mark Vezzola, Esq., Directing Attorney

California Indian Legal Services

Part 2: What is Your Property and How is it Titled?

• Real property (fee land, trust land, etc.)

• Bank and investment accounts• (Joint owners? Named beneficiaries?)

• Personal Property• Items of cultural and/or family significance• Automobiles, boats, bikes, etc.• Collectibles, antiques, jewelry, artwork, etc.

Do You Own Any Interests in Trust Land?

Southern California AgencyBureau of Indian Affairs

1451 Research Park DriveSuite 100

Riverside, CA 92507Telephone: (951) 276-6624

Palm Springs AgencyOffice of Special Trustee3700A Tachevah Drive

Suite 202Palm Springs, CA 92262

Telephone: (760) 416-4167

OST Trust Beneficiary Call Center: 1-888-678-6836

Individual Trust Interest Report

Assets

Dependents

WillMy Wishes

Insurance

My Care

Life Planning

Binder Activity

Part 2 - Take an inventory of your “property” and other assets you value.

Part 3: What are the options and potential legal issues your

beneficiaries may face?

Part 3: What Options and Potential Legal Issues May Your Beneficiaries Face?

• Who is a beneficiary?• A beneficiary gets an advantage or benefit from your property (not

automatic); e.g. a child named in a will can expect to inherit property.• What issues might your beneficiaries face?

• Probate (state/tribal court/BIA);• Challenges to a will (no contest clause?)

What will you leave your beneficiaries?

Feuding Family Members? Disagreements Over Property?

Different Kinds of Probate• Probate simply means the administration of an estate. The process varies depending on the nature of

the property and which government(s) probate the estate.

• Probates under California lawCan take up to a year, slightly less time than a BIA probate;Wills including non-Indian land and other property must be filed in state probate court;Small estate affidavits can be submitted to transfer property valued at $150,000 or less.Document intensive; lawyers are strongly recommended in state probate court.

• Tribal ProbatesTribes can adopt probate codes to administer and probate property under their jurisdiction.

• BIA ProbatesCan take several years to process;A copy of the death certificate and the Will, if they have one, must be submitted to the BIA;The BIA will appoint an Administrative Law Judge to hold a hearing, review the Will(s) (if any), and issue a decision on how to distribute the deceased person’s property.Little paperwork required of the relatives of the deceased; lawyers are optional.

Assets

Dependents

WillMy Wishes

Insurance

My Care

Life Planning

Binder Activity

Part 3 - Write down your policy information, think through land issues if you have allotted land or a home on tribal land.

ICE BREAKER: Who gets my money?

Part 4: What are the essential documents?

Part 4: What are the Essential Documents?

• Will (with careful drafting you can list all property in one document; some people have a separate will for Indian trust assets)

• Power of Attorney• Advanced Healthcare Directive• Living Trust*

*Living trusts are not necessarily but remain highly desirable and different from wills.

What is a Will?

• Wills are written documents stating how a person wants his/her property distributed upon death.

• Special rules govern who can inherit Indian trust property (e.g. allotments, IIM money), how it can be distributed, etc.;

• The BIA probates Wills containing Indian trust assets; state courts probate Wills for all other kinds of property (e.g., fee land, cars).

Requirements for a Valid Will

• What is required for a Will for Indian trust assets to be valid under federal law?• Wills must be in writing;• Wills must be signed by you (“testator”) and two disinterested witnesses

age 18 or over;• Wills do not need to be notarized but in the case of Indian Wills for trust

assets the accompanying affidavit requires notarization (the Will itself does not);

• California has similar requirements for wills.

Things to Think About When Making a Will

• What do you own? Allotment land? IIM money?• Who do you want that property to go to when you are

gone?• You can make gifts of land or money to one or more people

and sometimes divide it in different shares.• Do you wish to exclude anybody from inheriting your

property who might have an interest in it? • Think carefully about how your decisions will impact others.

Powers of Attorney• Grants power over your financial

and business decisions to a person of your choice.

• You decide when the power(s) begins: immediately or only when you become incapacitated.

• Can be revoked or changed any time;

• Does not apply to healthcare decisions (see Advanced Healthcare Directive)

• CA Uniform Power of Attorney Form is free and must be signed before a notary public.

Advanced Healthcare Directives• Designate an agent to make

healthcare decisions for you if you become unable to do so;

• Designate a primary treating doctor;• Choose to prolong your life through

artificial means;• Other healthcare-related decisions:

e.g., organ donation, autopsy, etc.• Can be registered with the CA

Secretary of State so it is on file in case of an emergency away from home.

Living Trusts• Living Trusts are a kind of trust created by a person (“Settlor”) during his or her lifetime

or upon death;• To fund a Living Trust property often must be retitled in the name of the Trust (e.g., a

home owned in the name of the Joe Smith Living Trust)*• A Living Trust can avoid the state court probate which is expensive (5% of estate value)

and takes time (up to 1 year);• Living Trusts can be revoked or changed by the Settlor during his or her life if worded

carefully;• It is not an either or situation: Even people with Living Trusts should have a Will to add

future assets into the Trust in the future however everyone should have at least a will.

* No regulations yet on putting trust land (e.g. allotments) into a trust.

Who am I?

Part 5: What taxes impact an estate?

Moderator: Michele Fahley, Deputy General Counsel,

Pechanga Band of Luiseño

Speakers: Michael Noon, Partner, Noon & Associates

CPAs & Dan Taylor Director of Finance, Pechanga Band of Luiseño

HOW DO I BUILD MY ESTATE?

• Your estate is made up of everything you own.• Building the value of your estate is done over a lifetime.• Understanding Finances and using Pechanga Plans can help you build that estate

LEGACY BENEFIT PLAN

GWE HOUSING GWE UTILITIES GWE NUTRITION

GWE CHILD CARE GWE WELLNESS GWE DEPENDENT INSURANCE

Sample Slide•Exemption $11.4M per person

•Married exemption $22.8M

•Above exemption, 40% Fed, 0% CA

•Debt counts as a deduction

•Can give any person $15K each in year ($30K married) and avoid filing a gift tax return.

•Gifts above annual exclusion eat into your lifetime estate exemption and need a gift tax return filed.

Portability •Allows executor to make an election on the estate tax return to transfer unused estate tax exemption to surviving spouse.

•Creates a double step-up (or down)

•Make sure trust allows it

•Elect on timely filed estate tax return. There is late relief.

•Gifting a house/asset is passed to recipient at cost basis to donor.

•Inheriting assets are adjusted to FMV. Start over depreciation too.

•Generally FMV is higher then cost basis.

•Think twice before gifting assets

Example:Steven is single and has a beach house from the 1960’s purchased for $19K. Home is now worth $2.4M.

Steven’s health is declining, should he gift the home to his son or let his son inherit?

•401-K Plans

•Life Insurance

•IRA’s

•Legacy Plan

•Annuities

•Transfer on/Payable on Death

No step-up on these assets

•Not taxable to beneficiary

•Payable to estate or incident of ownership, most likely no, unless over estate exemption.

•If concerned, create life insurance trust

vs.

•Estate is settled in probate court, open to the public, greater $100K

•Pass with will, need to prove will is valid.

•Pass w/o will, state inheritance laws kick in.

•Written legal document, assets titled in name of trust.

•Pecuniary beneficiary vs. residual beneficiary.

•Privacy

•Easier to administer

•Need to file a final personal income tax return for income earned up until death.

•If income after death, need to file a tax return (trust return) for income in respect of decedent.

•If living trust, may need to file a trust return if income is over $600.

•Upon death, per cap ceases.

•Get post tax investment account adjusted and get appraisals on real estate.

Assets

Dependents

WillMy Wishes

Insurance

My Care

Life Planning

Binder Activity

Part 5 – List your tax dependents and learn about GWE and the Pechanga Legacy Benefit Savings plan.

What did we learn?P1: What is the

purpose of an estate?P5: What are the

essential documents?

P3: What is your property and how is it

titled?

P4: What are the options and potential

legal issues your beneficiaries may face?

P5: What taxes impact an estate?

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