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 It is assumed that several years have passed and your marital status has changed from single status to married, then divorced with two teenage children under age 18

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 It is assumed that several years have passed and your marital status has changed from single status to married, then divorced with two teenage children under age 18. In the event of your death, you have arranged for your children to become heirs to your estate.

You will complete this assignment based on the relationship of key elements and decisions of your Financial Planning Simulation to estate planning, the difference between the role of a will and a trust in an estate plan, and the types of documents utilized to direct estate affairs.

Respond to the following questions:

1. Relate key elements and decisions of your Financial Planning Simulation to estate planning by addressing the following:

1. 1. M1 Discussion: Financial & Career Strategies: review your installment related to your short, intermediate, and long term personal financial goals. Discuss how estate planning would factor into achieving these goals for the benefit of your heirs if you were not able to complete them due to an early death.
   2. M2 Discussion: Life Insurance Coverage & Options: review your installment and indicate how your life insurance proceeds would factor into estate planning. If you arranged for your heirs to be your beneficiary under the policy, would it be necessary to include this amount in your will or trust? Explain why or why not.
   3. M3 Assignment: Health, Disability, and Long-Term Care Insurance: review your installment related to the portion which addresses the necessity of long-term care insurance. Discuss how this coverage for you would be beneficial for your overall estate plan and your heirs.
   4. M5 Assignment: Major Purchases: review your installment related to the assets and liabilities associated with your home and vehicle purchases. Discuss why these items should be included in your estate plan and how this would be accomplished.
   5. M9 Assignment: Financial Strength: review the Estimated Balance Sheet portion of this installment. Assume that since several years have passed since you first created this report, your Total Assets are now five times higher than they were at that time. After multiplying Total Assets by 5, compare this amount with the latest “Applicable Exclusion Amount – Estates” in Chapter 15. Based on this increased value, would your estate owe any estate tax if you became deceased now? Explain why or why not.
   6. M10 Assignment: Income Tax Preparation: review your installment related to the charitable contributions portion of the itemized deductions and assume that you would like to leave a donation of ten times this amount to the same charity after your death. Describe how you would address this in your estate plan and what impact it would have on the determination of your taxable estate (if any).

2. Differentiate between the role of a will and a trust in an estate plan by addressing the following:

1. 1. Define the purpose of a will and indicate how you would utilize one as part of your estate plan.
   2. Discuss the three requirements of a valid will.
   3. Assume that at the time you became divorced, you wanted to change your will to remove reference to your ex-spouse. Explain if it would be necessary to draft an entirely new will or if this could be facilitated in another manner.
   4. Define the purpose of a trust and indicate how you would utilize one as part of your estate plan.
   5. Discuss the difference between a revocable and an irrevocable trust. If you were preparing a trust for your estate plan, indicate which one that you would select and provide your rationale.
   6. Discuss the relationship of a “pour-over will” to a trust.
   7. Based on your knowledge of wills and trusts, describe how they are the same and how they are different. If you were preparing your personal estate plan, which one that you would use, or if you would use both, and provide your rationale.

3. Characterize the types of documents utilized to direct estate affairs by addressing the following:

1. 1. M2 Discussion: Life Insurance Coverage & Options: review your installment related to the four strategies for protection against losses with financial consequences. Based on the importance of these strategies, describe two other examples that you could instruct your heirs on the topic of risk through the use of a Letter of Last Instructions. Indicate the purpose of this document and give three examples of what you would include in this letter.
   2. M3 Assignment: Health, Disability, and Long-Term Care Insurance: review your installment related to the purpose of each type of policy and your selected coverage. Discuss how you would utilize a Power of Attorney for Health Care Matters in connection with health-related decisions which would need to be made if you were unable to make them. How is this document different than a living will? Indicate a circumstance where a living will would be more appropriate. Finally, assuming that you are divorced and your children are not age 18, indicate who you would select to handle your medical decisions under the Durable Power of Attorney and provide your rationale.
   3. M4 Discussion: Monetary Asset Management, M6 Discussion: Credit & Loans, and M8 Assignment: Investment Assets: review your installments related to the administration of these assets. Discuss how you would utilize a Durable Power of Attorney for Financial Matters in connection with these assets. Under what circumstance would the Power of Attorney become effective? Finally, assuming that you are divorced and your children are not age 18, indicate who you would select to handle your financial affairs under this type of arrangement and provide your rationale.