Advanced Planning

Once the Foundational elements of an estate plan are in place, Advanced Planning then builds on that by focusing on specific solutions to the client’s specific objectives, challenges, and planning issues. As such, it is an “a la carte” approach that provides planning choices to meet client goals. This list is not meant to be exhaustive, but rather illustrative of some of the tools we employ at this level. Advanced Planning often employs techniques such as the sophisticated IRA Inheritance Trusts (IRAITs), advanced Generation Skipping Transfer Tax planning (GST), Irrevocable Life Insurance Trusts (ILITs), Buildup Equity Retirement Trusts (BERTs, aka Spousal Gifting Trusts), Qualified Personal Residence Trusts (QPRTs), Legacy Trusts (Gifting Trusts for beneficiaries other than spouses), Limited Liability Companies, Asset Protection Planning, a degree of Asset Gifting Strategies, basic Charitable Remainder Trusts (CRTs), Special/Supplemental Needs Trusts for special needs beneficiaries (SNTs), etc.

Below is additional information on some of the most used techniques:

  1. IRA Inheritance Trust (IRAIT) — Eventually we are all going to pass on to our greater glory. It is how we are remembered by those who loved us and knew us that keeps us alive forever. With the IRA Inheritance Trust, a check will be coming to your beneficiaries with your name on it for their benefit every quarter. This will be part of your legacy.
  2. Build Up Equity Retirement Trust (BERT) — The BERT is a tax sheltered irrevocable trust that is set up by each spouse for the benefit of the other spouse. Gifts are made to the trust annually and, while still accessible, the assets are exempt from gift tax and estate tax. Also, because the trust is irrevocable the assets, are protected from creditors and predators. Then, upon the death of a spouse, the assets are passed on to intended beneficiaries.
  3. Qualified Personal Residence Trust (QPRT) — The QPRT allows you to move your primary or secondary residence out of your taxable estate while still allowing you to retain complete possession and use of the residence. After your passing, the home is then transferred to your intended beneficiaries. This technique, while effective at reducing your taxable estate, can become complicated if you wish to sell the property in the trust.
  4. Legacy Trust — A Legacy Trust is an irrevocable trust designed to accept and protect assets gifted to children, grandchildren, or others. The beneficiary can be their own trustee or someone else can be trustee either permanently or until the beneficiary reaches a certain age.
  5. Irrevocable Life Insurance Trust (ILIT) — The irrevocable life insurance trust or ILIT is a special type of trust that holds and is the beneficiary of a special type of insurance. This insurance inside this trust is guaranteed level premium, guaranteed benefit, and can be placed on the life of one spouse or both spouses. The payout from the policy is not estate taxable and may be used to pay the estate taxes.
  6. Limited Liability Companies (LLC) — An LLC is a business entity formed under state law and is commonly used for estate compression for tax purposes and asset protection. Shareholders or “Members” of the LLC cannot be personally liable for the debts of the LLC. Also, the assets that are owned by the LLC can be “compressed” and used for wealth transfer.
  7. Grantor Retained Annuity Trust (GRAT) — A GRAT is an irrevocable trust in which the grantor transfers assets into the trust and retains the right to annual payments of a fixed amount of principal and interest for a prescribed number of years. At the end of the period, the assets go to the beneficiaries in accordance with the grantor’s intentions.