Wealth Management
Asset Protection
Asset protection planning aims to protect your assets during your lifetime, control their distribution upon your death, and leave a legacy for your family. Family wealth planning often requires a strategy designed with your family’s financial protection and well-being in mind. Strategizing today will allow you to transfer wealth to future generations and minimize tax consequences safely. By working with an experienced attorney, you can develop an effective estate planning strategy.
Tax Planning
Often overlooked during estate planning are the implications of taxes that could potentially reduce the value of an estate. Our attorneys will develop an estate plan to minimize tax implications and protect your assets in the long term. Our Estate Planning department can also help you understand and file the decedent’s fiduciary income taxes and personal income taxes.
Trusts
Our office provides two categories of trusts: Testamentary Trusts and Inter-Vivos Trusts.
Testamentary TRUSTS
Testamentary Trusts are created under a Will and transfer part of the estate at the time of death. The following are a few types of Testamentary Trusts that you may want to consider:
Trusts for the Benefit of Children/ Grandchildren
Many people feel that an outright inheritance of significant funds is inappropriate for a young adult. As such, it may include trusts within the terms of a Last Will and Testament, which allow you to indicate that the child or grandchild’s inheritance is held in trust until they reach the age designated within the will. In addition, the trust may provide that the assets be used for the beneficiary’s benefit, while actual control over those assets may be assigned to someone other than the beneficiary.
Testamentary Supplemental Needs Trust
A Supplemental Needs Trust is an irrevocable trust authorized under New York State and Federal law. The funds in this trust serve to supplement governmental benefits received by an individual, such as SSI or Medicaid. Accordingly, the assets of a Supplemental Needs Trust may not be considered an available resource for the purpose of determining eligibility for such benefits.
Disclaimer Trust (Credit Shelter Trust) for Spouse
For married couples with larger estates, a Disclaimer Trust provides the opportunity to utilize the estate tax exemptions of each spouse while giving the surviving spouse the ability to decide how much they shall receive from the deceased spouse’s estate. Any assets disclaimed or renounced by the surviving spouse are held in trust for their benefit. The trust assets are distributed to the ultimate beneficiaries, such as their children, only upon the surviving spouse’s death. A Disclaimer Trust can result in significant estate tax savings.
Inter-Vivos TRUSTS
Inter-Vivos Trusts are created during the Grantor’s lifetime. The following are some different types of Inter-Vivos Trusts that you may want to consider forming:
Irrevocable Life Insurance Trust Agreement (ILIT)
A Life Insurance Trust is a wealth replacement vehicle by which the Grantor gifts money to the trust, and the trust, in turn, buys a life insurance policy on the life of the Grantor. When the Grantor dies, the life insurance proceeds are paid to the trust and distributed to the beneficiaries designated within it. The value of the life insurance policy is not included in the Grantor’s estate because the Grantor did not own it.
Inter-Vivos (Living) Charitable Remainder or Charitable Lead Trust
This trust is established to benefit a charity and allows the Grantor to receive an immediate income tax deduction for the charitable contribution. The trust may be designed to create an income stream rather than a lump sum. The trust assets are excluded from the Grantor’s taxable estate at death, reducing the Grantor’s estate tax liability. At the death of the Grantor, the charity receives the trust assets. A Charitable Lead Trust is a valuable tool for dealing with highly appreciated assets and is well-suited for charitably minded individuals who desire significant estate and income tax advantages and benefits.
Standard Inter-Vivos (Living) Irrevocable Trust
Assets placed into an Irrevocable Trust provide a means by which the assets are removed from the Grantor’s name and control while they continue to be held for the benefit of the Grantor. Once created, an Irrevocable Trust generally cannot be amended or revoked. Upon the death of the Grantor, the assets are distributed to the named beneficiaries (for example, the Grantor’s children) according to the terms of the trust. The trust can provide consolidation of assets and ease of management. The probate process is not required for the distribution of such trust assets.
Irrevocable Trusts can be a valuable tool in many situations, including second marriages. For example, spouses can place assets into an Irrevocable Trust that will benefit the surviving spouse during their lifetime; however, upon the surviving spouse’s death, the assets are distributed to the named beneficiaries. This type of trust is also helpful in protecting assets for a spendthrift or minor beneficiary.
Inter-Vivos (Living) Revocable Trust
A Revocable Living Trust is a device designed to avoid probate for trust assets while providing for the trustees to continue managing and controlling those assets. A Revocable Living Trust creates a flexible and efficient method to distribute assets after your death. In addition, it can protect against the necessity for guardianship proceedings if you become incapacitated. However, a revocable trust does not protect assets from your creditors and is not recommended for Medicaid planning.
Private Foundations
If you decide to start a private foundation, there are numerous financial and philanthropic benefits. Setting up a private foundation offers a way of giving back while leaving a lasting legacy for yourself and your family. Our attorneys can guide you through the process of organizing your foundation, filing the appropriate documentation, and ensuring that your private foundation is legally sound.
Nonprofit Corporations
Starting a Nonprofit Corporation allows you to achieve a specific charitable goal while raising money on your terms. The benefit of setting up a 501(c)(3) nonprofit is that there is no income tax on money earned through donations. Our attorneys can guide you through forming a corporation, filing paperwork through the IRS, and ensuring that the corporation complies with state and local requirements.
