Advanced Estate Planning: Is It Right for You?

Advanced Estate Planning: Is It Right for You?

Sometimes, simple is not best. Estate planning should be tailored to meet the needs of your life, and sometimes that life is complicated. Advanced estate planning may be right for you.

Basic estate planning is . . .

A simple plan typically includes a Will, a durable power of attorney, a healthcare power of attorney and/or a living Will. But basic estate planning covers basic needs.

Some people require more sophisticated planning and strategies.

Do you need to reduce estate taxes?

One goal of advanced estate planning is to reduce potential estate taxes. Prior to tax reform, estates valued below the exemption limit of a little over $5 million did not pay estate taxes. Post tax reform, the exemption is now a little over $10 million.

That increase is great. But anyone with an estate that even approaches the exemption limit could benefit from advanced estate planning tactics designed to reduce estate taxes.

Do you want to build a financial legacy for your descendants?

If so, you might consider one of the following wealth-transfer strategies:

  • Grantor Retained Annuity Trust (GRAT). The grantor receives annuity payments from this irrevocable trust. Assets may transfer tax-free to heirs.
  • Generation-Skipping Trusts. Also known as dynasty trusts or legacy trusts, assets transfer to the grantor’s grandchildren to reduce estate taxes.
  • Irrevocable Life Insurance Trusts. Insurance benefits may be paid into this type of trust, where they are held in trust for your beneficiaries.
  • Spousal Lifetime Access Trust (SLAT). This trust allows a married couple to benefit from the trust, while naming descendants as beneficiaries.

The trusts mentioned above may not be the only solution or best solution available to you. Before entering into a trust, seek advice from a lawyer who understands the implications.

Do you have assets you need to protect?

Asset protection tactics are a big part of advanced estate planning and include:

  • Setting up a family limited liability company;
  • Using effective gifting strategies;
  • Considering the benefits of offshore trusts;
  • Developing business succession plans.

Advanced estate planning requires coordination between all components of your plan.

Get the Sophisticated Estate Plan You Need.

An estate plan should meet your needs depending on your circumstances. A simple Will isn’t enough for someone with a high net worth estate or complicated family structure.