Advanced Estate Planning

Advanced Estate Planning for Greater Peace of Mind

Irrevocable Life Insurance Trusts

These are special trusts that can help clients exclude life insurance proceeds from their estates. A life insurance trust involves a tax reduction strategy. Generally the trust arises at the death of the grantor and is composed of insurance proceeds. Since the insurance trust owns your insurance policies for you- you don't personally own the insurance, it will not be included in your estate and your estate taxes are reduced.

For example if you are married and have an estate of $2 million- $400,000 of which is life insurance. By creating a living trust or will, you can protect much of the estate from estate taxes. However the estate tax on the $400,000 insurance is $156,000! If you had created an insurance trust, the $400,000 in insurance would not be in your estate and you would save your family $156,000 in estate taxes.

Buy-Sell Agreements for Small Business Owners

As more Americans become entrepreneurs, they've discovered that wise business planning is essential to their success today and their financial security tomorrow. Buy-Sell agreements are generally for owners of closely held corporations who want to protect their assets. The surviving owners agree to purchase the interest of a withdrawing or deceased owner. The buy sell agreement provides for an orderly disposition of an interest in a business and is beneficial in setting the value for estate tax purposes.

Charitable Remainder Trusts

Charitable Remainder Trusts (also called CRT's) are for people who have highly appreciated assets that they want to donate to a charity or organization they admire. At the same time they can secure a current tax break, preserve or gain a source of income, and provide their beneficiaries with a tax-free inheritance in the future.

How it works: You transfer an substantially appreciated asset into an irrevocable trust. This removes it from your estate so, when you die, no estate taxes will be due on it. The trustee can then sell the asset at full market value, without paying a capital gains tax. The trustee can then reinvest the proceeds in other income-producing assets. During the remainder of your life the trust pays you the income. At your death, the remaining trust assets go to the charity you have chosen- hence the name charitable remainder trust.

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High estate and death taxes as well as the final insult of probate will dramatically reduce the size of your estate if you do not have an estate plan. Building wealth is only half the job. Setting up an estate plan protects the wealth you have accumulated for you and your family. A wisely drafted, carefully executed estate plan is a critical part of a family's wealth management. Email us to find a Massachusetts lawyer experienced in Estate Planning.