Wealth Preservation

Understanding Advanced Estate Planning and Wealth Preservation

Developing a custom estate plan is only part of the process in arranging your affairs for the future. In addition to creating the right wills and trusts, asset protection can be vital to managing what you own and preserving your wealth, especially if you have a sizable estate and are looking to protect it for future generations. The attorneys at Kling Law Offices understand the nuances involved with this process and will help you create an asset protection plan to accompany your current estate plan.

We will advise you on the advantages and disadvantages of more complex and sophisticated planning tools and methods including, but not limited to Irrevocable Trusts, Family Limited Partnerships, and Limited Liability Companies.

Grantor Retained Annuity Trusts (GRATs): This is a very powerful and tax efficient estate planning technique that allows a person to share the future appreciation of an asset with the next generations with virtually no gift tax.

Irrevocable Life Insurance Trusts (ILITs): An irrevocable trust is set up with a life insurance policy as the asset, allowing the grantor of the policy to exempt assets away from his/her taxable estate.

Irrevocable Charitable Remainder Trusts (CRATs/CRUTs): A tax-exempt trust is designed to reduce the taxable income of individuals by distributing income to the beneficiaries of the trust first for a specific period of time and then the remainder is donated to a designated charity.

Family Limited Partnerships: A Family Limited Partnership allows General Partners to maintain control over assets while also protecting the property from lawsuits and creditors as well as moving wealth from one generation to the next.

Qualified Personal Residence Trusts (QPRTs): This is a specific type of trust that holds your primary or secondary residence and removes its value, on a discounted basis, from your estate.

Intentionally Defective Grantor Trusts (IDGTs): This trust may be the very best estate planning technique for transferring assets to younger generations with the least possible transfer tax consequences. The IDGT retains the income tax characteristics of the grantor trust, but can save estate taxes by removing the assets from the grantor’s gross estate.

Charitable Lead Trusts (CLATs/CLUTs): The premise behind this type of trust is to reduce taxes upon the estate left by the deceased. This is accomplished by donating to charities from the estate until all taxes are reduced, at which point, the estate is transferred to the beneficiaries, typically at a lower tax rate.

Special Needs Trusts (SNTs): A special needs trust is a written document to preserve the assets which may be received by someone of limited capacity, while also preserving any income or benefits which that individual may be receiving from other sources such as government, etc.

Self-settled Spendthrift Trusts (SSSTs): This type of trust prohibits a beneficiary and creditors from accessing trust assets contrary to the trust terms. In addition, this trust includes the Settlor of the trust as a beneficiary of the trust.

Gifting Trusts: This type of trust allows individuals or families to transfer wealth during one’s life via gifts to qualifying entities. Such gifts may qualify for the annual gift tax exclusion.

Limited Liability Company (LLCs): A business entity that allows you to take advantage of the liability protections of a corporation, while enjoying some of the tax advantages of a partnership.

Please contact our Firm to learn more about advanced estate planning and asset protection, and how our attorneys will customize a plan for you to preserve and protect what you have worked so hard for.