Area of Practice
Advanced Estate Planning
As your assets and investments grow, so does the complexity of your estate plan. This creates the need for hyper-attention to detail in every nook and cranny of your personal and business assets to ensure you are protected from excessive taxation and other vulnerabilities. Risks to your estate plan can come from expected and unexpected places related to family, health, and economic impact. Advanced estate planning helps dramatically minimize these risks and increase the level of security around your portfolio.
Our Services Include:
- Dynasty Trusts
- Durable Power of Attorneys
- Health Care Directives
- Living Wills
- Defective Grantor Trusts
- Grantor Retained Annuity
- Spousal Lifetime Access Trusts
- Irrevocable Life Insurance Trusts
- Charitable Remainder Trusts
- Gun Trusts
- Pet Trusts
Endacott Timmer is knowledgeable and actively involved in estate planning and tax-related matters to meet our client’s objectives, ambitions and wishes, and safeguard the personal and company assets they have accumulated during their lifetimes. We advise our customers to be proactive and to arrange in advance for the disposition of their assets upon death.
Frequent Questions About Advanced Estate Planning
Advanced estate planning is complex and involves many different strategies. At Endacott Timmer, we’re here to help answer any questions you may have—explore our commonly asked questions below and contact us with any other questions.
1
What’s The Difference Between Estate Planning and Advanced Estate Planning?
Estate planning involves the process of arranging for the transfer of your assets and property upon death or incapacity. General estate planning is focused on ensuring that your assets are distributed according to your wishes and that your loved ones are taken care of after you are gone.
Advanced estate planning on the other hand is focused on maximizing the benefits of the estate plan and minimizing the impact of taxes and other legal issues. This involves more complex strategies and techniques to minimize estate taxes, protect assets from creditors, and preserve wealth for future generations.
2
How do I make gifts through a trust? Does a trust save me taxes?
A trust is a fiduciary arrangement that permits a trustee to keep assets for the benefit of one or more beneficiaries. Trusts can be structured in a variety of ways and can determine exactly how and when assets are transferred to beneficiaries. The transfer of assets to a trust provides no further tax benefits to the donor. Taxes must be paid on the income or assets kept in the trust, including revenue earned by property held in the trust. Taxes may be the obligation of the trust, the beneficiary, or the transferor.
The IRS requires that any donations made from a trust be immediately under the full control of the recipient. This “present interest” criterion indicates that a conditional gift does not qualify for the yearly exclusion amount if the recipient does not have control over it at the time of the gift.
A gift in a trust is a unique arrangement that permits an indirect transfer of assets to a beneficiary. Endacott Timmer can help you designate gifts through your trust to ensure the tax-efficient transfer of wealth to the next generation in your family. We assist with building a document that specifies the terms of your trust and outlines how your trust property is invested and dispersed. The IRS sets limits on how much you can gift your next generation before it’s taxed which is why many people request we use their trust to assist with the distribution of gifts.
3
What’s the generation skipping tax?
The generation-skipping tax (GST), sometimes known as the generation-skipping transfer tax, is a tax that’s imposed when people make generation-skipping transfers in their estate plan in favor of younger generations.
Historically, skipping a generation in your estate plan was a way to avoid double estate tax liability. The generation-skipping tax discourages you from excluding your children from your estate plan in favor of younger generations in order to avoid paying extra estate taxes. If you make a generation-skipping gift, the IRS adds the GST to the regular estate or gift tax, to ensure the federal government gets its double taxation.
4
How do I protect my assets from creditors?
Implement appropriate asset protection procedures as soon as practical. The purpose of asset protection is to safeguard against unforeseen future claims, as opposed to previously filed or reasonably predicted claims. You can purchase insurance, transfer assets, re-title assets, make retirement plan contributions, create an LLC or FLP, set up a DAPT, or create an offshore trust.
Case Study: Advanced Estate Planning
Introduction
A high-net-worth client has assets that greatly exceed the applicable exemption for federal estate tax purposes. The client has children and desires to transfer wealth down to her children and future generations.
Problem
Our client is philanthropic but does not want the burden of running a private foundation. The client used up most of the applicable exemption with lifetime gifts.
Solution
The solution was a “zeroed out Charitable Lifetime Trust” technique. Our client put into place estate planning documents that transfer all assets of the client at death to a Charitable Lifetime Trust (“CLAT”). The Trust would pay to a selected charity an amount sufficient to generate a zero value at the end of the 20-year term. At the time of the funding of a CLAT, a closely held business controlled by the client’s children is granted an option to purchase the assets of the CLAT with a promissory note payable over 20 years.
Finally, the client immediately commits to a series of rolling grantor remainder annuity trusts (“GRATs”). Our client’s commitment to the technique has resulted in the tax-free transfer of millions of dollars worth of assets to the next generation free of federal estate and gift tax.