Advanced Estate Planning
Special Trusts Lawyers
Which Estate Planning Documents Do You Need?
Once the foundational elements of an estate plan are in place, our lawyers use Advanced Estate Planning to then build on that foundation by focusing on specific solutions to the client’s specific objectives, challenges, and planning issues. As such, it is an “a la carte” approach that provides planning choices to meet client goals. The following list is not meant to be exhaustive, but rather illustrative of some of the tools our lawyers employ at this level. Advanced Planning often employs techniques such as advanced Generation Skipping Transfer Tax planning (GST), Irrevocable Life Insurance Trusts (ILITs), Spousal Lifetime Access Trusts (SLATS), Qualified Personal Residence Trusts (QPRTs), Legacy Trusts (Gifting Trusts for beneficiaries other than spouses), Limited Liability Companies, Asset Protection Planning, a degree of Asset Gifting Strategies, basic Charitable Remainder Trusts (CRTs), Special/Supplemental Needs Trusts for special needs beneficiaries (SNTs), etc.
Below is additional information on some of the techniques our legal team uses most. Contact one of our attorneys at (866) 230-2206 if you have questions or believe if one of these special trusts or other tools might meet your planning objectives.
- Spousal Lifetime Access Trust (SLAT) — The SLAT is an irrevocable trust that is set up by each spouse for the benefit of the other spouse during their lifetime. The donor spouse makes irrevocable
gifts to the trust and gives up any right to the funds. The beneficiary spouse and potentially other beneficiaries such as children and grandchildren, are
provided access to the gifted funds right away. Also, because the trust is irrevocable, the assets are protected from creditors and predators.
- Qualified Personal Residence Trust (QPRT) — The QPRT allows you to move your primary or secondary residence out of your taxable estate while still allowing you to retain complete possession and use of the residence. After your passing, the home is then transferred to your intended beneficiaries. This technique, while effective at reducing your taxable estate, can become complicated if you wish to sell the property in the trust.
- Legacy Trust — A Legacy Trust is an irrevocable trust designed to accept and protect assets gifted to children, grandchildren, or others. The beneficiary can be their own trustee or someone else can be trustee either permanently or until the beneficiary reaches a certain age.
- Irrevocable Life Insurance Trust (ILIT) — The irrevocable life insurance trust or ILIT is unique in that it holds and is the beneficiary of a special type of insurance. This insurance inside this trust is guaranteed level premium, guaranteed benefit, and can be placed on the life of one spouse or both spouses. The payout from the policy is not estate taxable and may be used to pay the estate taxes.
- Limited Liability Companies (LLC) — An LLC is a business entity formed under state law and is commonly used for estate compression for tax purposes and asset protection. Shareholders or “Members” of the LLC cannot be personally liable for the debts of the LLC. Also, the assets that are owned by the LLC can be “compressed” and used for wealth transfer.
- Grantor Retained Annuity Trust (GRAT) — A GRAT is an irrevocable trust in which the grantor transfers assets into the trust and retains the right to annual payments of a fixed amount of principal and interest for a prescribed number of years. At the end of the period, the assets go to the beneficiaries listed in the special trust in accordance with the grantor’s intentions.
- Intentionally Defective Grantor Trust (IDGT) — The ISDGT is an irrevocable trust that is treated differently for federal income tax purposes than for federal estate tax purposes. For estate tax purposes, any gifts you make to the IDGT will be treated as a completed gift, meaning the gifts are excluded from your taxable estate (just like with the ILIT). However, for income tax purposes, you are treated as the owner of the IDGT assets. As a result, you are responsible for the income taxes. The IDGT’ s purpose is to move assets to the next generation, either by gift or by sale, while maintaining control of the assets.