Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for enjoyment and future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain intact as it passes to your beneficiaries, instead of being siphoned off to government processes and bureaucrats.
Legacy Wealth Planning
Not only does a Family Wealth Trust provide for the disposition of your property (like a Will), but it also offers the following benefits:
• Provides for the immediate transfer or trust management and distribution in the future of assets after death;
• Allows for a smooth transition of management upon incapacity or death;
• Avoids the expense and hassle of probate proceedings;
• Minimizes estate taxes and defers payment of estate taxes for married couples;
• Allows for continued control over assets after death or incapacity;
• Provides security to you and your loved ones;
• Protects your children’s inheritance from their own potential divorce;
• Safeguards your estate for your kids if your surviving spouse remarries;
• Offers flexibility.
Families Without an Estate Plan
Trust Administration & Probate
Depending on the complexity of the estate and the thoroughness with which accounting has been carried out before death, probate can either be a relatively simple task or a daunting one. Be aware that no matter the situation, probate may be a lengthy process often taking months or possibly years to play out, and one which may take a considerable amount of an executor’s time.
To summarize the process, probate can be broken into six basic steps:
• Validation of the Will
• Appoint executor
• Inventory estate
• Pay claims against the estate
• Pay estate taxes
• Distribute remaining assets
Each of these steps involve legal documentation and validation, and more importantly, proper accounting each step of the way.
To summarize the process, trust administration can be broken into five basic steps:
• Inventory assets
• Determine estate tax
• Division of trust assets
• File the Federal and State tax forms
• Distributions to beneficiaries
Although the trust administration process seems relatively straightforward, there are several reasons it can sometimes be drawn out over several months or even years. The first step, the inventory of assets, must be completed before the trust administration can begin, and this can be difficult to complete depending upon the prior organization and the size and complexity of the decedent’s assets. Next, the 706 estate tax return must be filed within 9 months, or 15 months if an extension is filed. Often, it is prudent to wait until the last minute to file this form. If the spouse of the decedent is in failing health and may pass away before the deadline, then both 706 forms can be used to maximize tax advantages to the estate. The final step, asset distribution, cannot take place until the 706 has been filed, and even then should not take place until the “Closing Letter” is received from the IRS certifying acceptance of the 706 return. This closing letter will take a minimum of 6 to 8 months, and as long as 3 years, to arrive after the 706 is filed. In addition, there may be a state estate or inheritance tax return required, even if a federal return is not required.
LGBTQ Estate Planning
Yes, if you are married or in a registered relationship and in a state which recognizes that relationship. However, if you’re unmarried and either, 1) not in such a registered relationship, or 2) you are in a state which does not recognize that relationship, then default state law allows your partner’s family of origin rather than you to make those decisions. However, if your spouse or partner designates you as agent under their Health Care Power of Attorney, then you would be able to make such decisions.