ADDITIONAL TOOLS & SERVICES
Review of Previously Executed Estate Planning Documents
There are many reasons you may want to have your estate plan reviewed. Estate planning laws and tax regulations are constantly changing. It’s possible changes in the law could require your documents to be amended. You will likely also want to revisit your estate plan if there has been a recent death or divorce, an important person involved in your estate has moved addresses or changed names, or you have added a new member to the family.
Transfer of Closely Held Interests (LLC’s, Partnerships, Corporations, FLP’s) – Including Review of Operating Agreements and Other Corporate Documents
Transfers of closely held business interests occur for a number of reasons (an owner decides to leave the company, an owner dies, an owner divorces, an existing member wants to bring on a new member, or the business is to be sold in its entirety). Eckert Byrne LLC can help you understand your rights under your existing shareholder and member agreements. We can advise on how to integrate these interests with your estate planning documents.. Additionally, we can advise you on how to create a buy-sell agreement for your business.
Your estate may include the proceeds from your life insurance policy when you pass on. Often, the value of your estate combined with the proceeds from life insurance can push your estate over the Massachusetts estate tax exemption of $1 million. An irrevocable life insurance trust can help you avoid tax on your life insurance proceeds by moving ownership of the policy to the trust. An ILIT is specifically designed to own a life insurance policy. Death benefits are deposited into the ILIT when you die where they’re held for individuals you’ve named in your trust documents.
It’s important to integrate your retirement account into your estate plan. A standalone retirement trust (also known as an IRA beneficiary trust) can help you maximize the benefit of your IRA to your beneficiaries and provide protection from divorce, creditors, and bankruptcy. An SRT is designed to be the beneficiary of an IRA (or a portion of an IRA) following the death of the owner. The trustee of the SRT oversees the Required Minimum Distributions and determines when distributions are made to the beneficiaries. An SRT provides maximum income tax deferral and wealth accumulation for your beneficiaries.
A spousal limited access trust is an irrevocable trust established by an individual to benefit their spouse, children, and grandchildren. Assets transferred through the trust (often life insurance policies or investment accounts) are considered gifts and will use some or all of the gift exemption. However, the assets and any appreciation of the assets will be passed down free of estate tax. A SLAT provides asset protection while still allowing a spouse the benefit of trust distributions if necessary.
Qualified Personal Residence Trust (QPRT)
The establishment of a qualified personal residence trust allows an individual to remove a home from their estate as a method for reducing gift and estate taxes. Qualified personal residence trusts allow the homeowner to remain living on the property for a predetermined period of time. After that time, ownership is passed down to the beneficiary.
Charitable Remainder Trust (CRT) &/or Charitable Lead Trust (CLT)
A charitable remainder trust is an irrevocable trust designed to reduce taxable income. Assets are transferred to the irrevocable trust and receive a partial charitable income tax deduction in the year of transfer. The individual creating the trust also receives a lifetime annuity/income stream. After death, or at the end of a specific period, the assets are donated to designated charities. The assets are removed from your estate for tax purposes and are not subject to gain or income tax, but distributions are taxed at the individuals tax rate. A charitable lead trust is similar to a charitable remainder trust. However, the charity receives the income stream during the creator’s lifetime and the assets then go to the beneficiaries at the time of death.
Grantor Retained Annuity Trusts (GRAT)
A grantor retained annuity trust is meant to minimize taxes on large financial gifts to family members. With a GRAT, an individual sets up a trust for a certain period of time and retains the right to receive an annuity payment from the trust over the term that is equal to the contribution value plus an IRS set interest rate. At the end of the term, the value of the appreciated assets assets left in the trust are distributed to beneficiaries (outright or in trust) tax free . The GRAT strategy works well with stock or other assets that are expected to appreciate significantly.
Irrevocable Gifting Trust/Intentional Defective Grantor Trust (IDGT)
Irrevocable gifting trusts allow individuals to create and transfer assets to a trust during their lifetime for the benefit of children, grandchildren, or other beneficiaries. Irrevocable gift trusts are specifically designed to qualify gifts to the trust as a gift of a present interest.. A gifting trust can protect assets, and reduce an individual’s estate through lifetime gifts.
Limited Liability Company
There are many benefits to establishing a Limited Liability Company (LLC) to create asset protection for the assets owned by the LLC. Assets that may create liability for the owner are ideal for being transferred into an LLC. The LLC can shield the owners non-LLC assets from LLC creditors. LLC’s are used to create asset protection and as an flexible business structure.
The LLC structure offers fewer ownership restrictions and a more flexible management structure when compared to an S-Corp. or C Corp. Eckert Byrne LLC can assist in determining whether this is a viable planning tool for you.