Advanced Level Planning
The IRA Inheritance Trust®
This unique, cutting-edge strategy, created by our firm in conjunction with one of the nation’s leading IRA experts, and approved by the IRS in a Private Letter Ruling, may provide you and your loved ones with numerous, considerable benefits, including: maximization of income tax deferral and wealth accumulation; minimization of estate and generation skipping taxes; guarantee of eventual distribution to your desired beneficiaries though several generations; and spendthrift, divorce and creditor protection for your beneficiaries. This IRA Inheritance Trust® should be set up separately from your Living Trust and is generally advisable if your IRAs total over $150,000 (both husband and wife combined and including any company retirement plans, such as 401(k)'s). See our seminar or, for more information, visit www.irainheritancetrust.com.
Wealth Replacement (Life Insurance) Trust
The Wealth Replacement Trust is an excellent vehicle for passing significant amounts to your beneficiaries, while avoiding Estate Taxes for several generations. Additionally, this Trust, when funded by life insurance, may provide tax-free funds which can be used to: create a "Family Bank" which your loved ones can turn to for help when needed or to invest and build your family's wealth for generations; defray some or all of the anticipated estate taxes on your other assets; provide funds to pay income taxes on IRA and annuity withdrawals; equalize gifts to various beneficiaries (such as when there are children of another marriage or real estate or a busienss is earmarked for a particular beneficiary).
Personal Residence Trust
A Qualified Personal Residence Trust (“QPRT”) currently provides a unique opportunity to remove your personal residence or vacation home from your taxable estate, while you continue to enjoy it during your lifetime. The QPRT has the potential to save your beneficiaries hundreds of thousands of dollars (or more) in Estate Taxes, while allowing you the use of the property. This trust may also protect your primary residence and/or vacation home against potential lawsuits and creditors.
Family Limited Partnership (or LLC)
The Family Limited Partnership (FLP) can achieve significant Gift & Estate Tax savings by leveraging your lifetime exemption (currently limited to $1,000,000) and $13,000 per person annual Gift Tax exclusion. The IRS allows significant discounts in the gift/estate tax values of investment assets passing through an FLP. The FLP also provides an easy vehicle to make continued annual gifts, while retaining control over your assets, plus provides proper succession management of your real estate or other investment assets by the beneficiaries most capable of doing so. Furthermore, the FLP may provide significant asset protection from potential lawsuits as well as other valuable benefits. A Limited Liability Company (LLC) may attain similar or better results and may be used instead of the FLP, depending on your circumstances; particurlarly if asset protection is a primary concern.
Capital Gains Bypass Trust
The Capital Gains Bypass Trust, also known as a Charitable Remainder Trust, is an IRS approved method of avoiding the payment of Capital Gains Tax upon the sale of appreciated property such as real estate, stocks and mutual funds. After transferring the assets to the Bypass Trust and selling them, you receive a lifetime income payment. When properly combined with a Wealth Replacement Trust, your beneficiaries will also receive the full value of the trust assets, estate and income tax-free. Alternatively, your beneficiaries may continue to receive income payments for a period of years after you're gone.
Grandchildren's Educational Trust
This irrevocable Trust is an effective way to fund your grandchildren’s education or otherwise provide for the health, maintenance or support of loved ones, while controlling and protecting the assets gifted. The Trust can be set up to receive ongoing annual gifts, tax-free.
Other Gift Planning
It is important to seek qualified professional advice when making gifts so that they will withstand IRS scrutiny and not be currently gift taxed or pulled back into your taxable estate at your death. When making gifts of real property, care should also be taken to avoid a property tax reassessment. We can help you avoid these and other potential pitfalls while counseling you on proper gift giving procedures.
Elimination of Estate Taxes for Very Large Estates
Once the above planning techniques have been used, if appropriate, even more advanced level estate planning may be designed and implemented by our "of counsel" attorneys for estates of over $10 million. These include, but are not limited to: specialized irrevocable trusts (such as "GRATs", "IDGTs", "CLATs"); private annuities; self-cancelling installment notes; and private foundations.
Income Tax Reduction for Large Estates
Through "of-counsel" attorneys, we also provide specialized income tax planning if you have over $200,000 of annual taxable income.