We use a variety of trust and estate planning strategies, each customized to a client’s particular needs. We believe that any good estate plan starts with certain foundational documents: a will, a general power of attorney, and a health care power of attorney.
Most of our estate plans are designed around a revocable living trust for each client. This common form of trust allows more flexibility and control over how one's property is administered during lifetime incapacity than relying on a power of attorney, and a faster and more discreet settlement of one's estate after death than a will-based estate plan. A well-designed revocable living trust can help keep you, your family, and your assets out of the court system and the public eye, and ensure that your children and other heirs receive their inheritances in the most productive and beneficial way for them.
Certain types of assets, such as closely-held businesses, life insurance, Subchapter S corporations, real estate, retirement accounts, and assets with a low income tax basis, among many others, require special consideration in any estate plan. We can help you make sure that these assets are incorporated into your plan in a way that maximizes their value, minimizes their tax burden, and passes them on to future generations in the way you desire.
For clients whose estates are potentially subject to estate, gift, and generation-skipping transfer taxes, more sophisticated planning techniques are available. In general, transfer tax planning involves using trusts, partnerships, or other legal devices. These may be used to leverage existing exemptions from such taxes, such as the $16,000 annual exclusion from gift tax or the $12.06 million lifetime basic exclusion amount from estate and gift tax. Alternatively, they may be used to reduce or freeze the value of a client's taxable estate, while moving the future appreciation of such assets into trust for the benefit of heirs. The result is that the client’s taxable estate value will be minimized or reduced, triggering a smaller (or nonexistent) estate tax burden. Importantly, the IRS and other governmental authorities permit these methods for a reason: they generally involve some loss of control over an asset, so they should be used with caution. Commonly-used methods of transfer tax planning include:
Regular annual gifting to heirs;
Family limited partnerships (FLPs);
Irrevocable life insurance trusts (ILITs);
Qualified personal residence trusts (QPRTs);
Grantor-retained annuity trusts (GRATs);
Spousal lifetime access trusts (SLATs); and
Sales to intentionally defective grantor trusts (IDGTs).
Closely connected to estate planning is asset protection, which uses various forms of ownership of assets to protect them from creditors, spendthrift heirs, and other such situations. Methods of asset protection vary widely from client to client. Professionals and entrepreneurs in fields where lawsuits are common should give especially careful consideration to asset protection planning.
For charitably-minded clients, a host of options are available to allow wealth to pass to charity free of both income and transfer taxes. In addition to outright gifts to charity, options include charitable lead trusts, charitable remainder trusts, private foundations, and donor-advised funds, each of which exist in a number of different types.
We can help you implement any of these estate and tax planning methods.
