“Advanced” trust planning? That may sound like it is only for the wealthy or that you may not be able to afford it, but it simply describes strategies that require either more knowledge of the law, more time to implement, or other complications. And no, “advanced” is not an indication of being better like some people try to use “executive”. (Although I do like the sound of “executive estate planning”) Advanced planning options are VERY situation specific and are not for everyone but should be considered by most.
Here are a few examples of how “advanced” estate planning can help:
- LLC creation: Creating an LLC to hold investment properties can help insulate a person from liabilities associated with the property within the LLC. It is crucial to ensure proper formalities of the corporation are followed, and a case from August 2017 may indicate new best practices as well. Family Limited Partnerships or Family Limited Liability Companies are also options.
- Prenuptial Agreements: This is in advanced because it requires some knowledge of Family law which many estate planners do not have. A prenuptial can protect your assets in the event of a divorce and are particularly usefully when one spouse has far more wealth than the other or children from a previous marriage.
- Charitable Remainder Trusts: If you want to donate money to charity, you can leave property to a charity but give yourself the ability to use it while you are still alive and the charity gets whatever remains of the property after you die. This can save in estate taxes, avoid creditors, and has other uses as well. If you use the income from a property to buy life insurance, you can even still make sure you leave property to your heirs.
- Supplemental Needs Trusts: If you have a child with a developmental disability, certain government programs can be a Godsend to help pay for their care. But leaving money to the child directly would disqualify them from the benefit so you can instead leave property to a supplemental needs trust that can be used to support the child in ways that the benefit does not, improving their quality of life.
- Irrevocable Asset Protection Trusts: This type of trust can be used to remove an asset from being accessible to creditors of your estate. It will also generally mean you lose control over it as well. This trust can be used by wealthy clients who will not need an asset and just want to protect it for their family.
- Community Property: Did you know there are even trusts that can make your assets community property with your spouse even though you never lived in a community property state?
As you can guess, there are an infinite number of variations and other options out there. Which one is right for you? Let’s find out together. Contact MGM Law Firm at 541-233-7441.