Estate Planning

Estate Planning Philosophy: Phase I Planning

Basic Tax Structure & Asset Protection

  • Execution of wills drafted by your legal advisors that create testamentary credit shelter and marital trusts, designed to take advantage of the federal exemption from estate taxes and the unlimited marital deduction. This is the typical Credit Shelter Trust/Marital Trust Scheme.
  • Execution of Living Wills, Durable Powers of Attorney, and Health Care Directives drafted by your attorney.
  • Conduct comprehensive insurance audit and review acquisition of additional coverage.
  • Evaluate the use of life insurance to provide for estate liquidity.
  • Consider whether some or all insurance policies should be owned by an irrevocable life insurance trust (ILIT).
  • Determine the most efficient use of both annual and lifetime gifting exemption amounts.
  • Transfer assets to a Revocable Trust during lifetime to achieve privacy and easy estate administration.
  • Use Lifetime and Dynasty Trusts for children/heirs to help protect your assets from third party creditors, and spousal claims during divorce.
  • Consider establishing a Dynasty Trust. Dynasty Trusts may involve removing assets from the transfer tax system for generations to come.

Estate Planning Philosophy: Phase II Planning

Structure of New Ventures

  • Beneficiary Controlled Trust: Beneficiary Controlled Trusts (BCT's) are used to remove new ventures from your taxable estate while maintaining some control of the assets. Dynasty Trust provisions should be included in the structure of the BCT.
  • Family Limited Partnerships: FLPs are used to shift income and appreciation to the children at a potentially discounted value from the underlying value of the assets of the FLP.

Estate Planning Philosophy: Phase III Planning

Removal of Appreciation from Taxable Estate

  • Lifetime Planning: You can potentially take the future growth on any or all existing assets in excess of the IRS discount rate and shift that growth to trusts for your spouse and your children without any gift tax. You would thus remove the government as a partner in any future growth of assets over that discount rate. There are three basic structures that accomplish this objective:
    • Grantor Retained Annuity Trust (GRAT)
    • Sales to a Grantor Trust
    • Qualified Personal Residence Trust (QPRT)

Estate Planning Philosophy: Phase IV Planning

Charitable Strategies

  • Three vehicles that are often used to accomplish philanthropic objectives:
    • Family Foundation
    • Charitable Remainder Trust (CRT)
    • Charitable Lead Trust (CLT)

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This webpage is for informational purposes only and is not meant as Tax or Legal advice. Please consult with your tax or legal advisor regarding your personal situation.Trusts should be drafted by an attorney familiar with such matters in order to take into account income, gift and estate tax laws (including generation skipping transfer tax). Failure to do so could result in adverse tax treatment of trust proceeds. 
To ensure compliance with requirements imposed by the IRS under Circular 230, we inform you that any U.S. Federal tax advice contained in this communication, unless otherwise specifically stated, was not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another party any matters addressed herein.