Articles Posted in Estate Planning-Wealth Planning

Five Elements of Sound Estate Planning

A solid estate plan consists of multiple elements, each of which serves a different purpose. Each of these is vital to making sure your legacy is passed on to your loved ones without imposing undue burdens on them. For those who are highly wealthy, it can also serve to decrease taxes by keeping the entire estate’s value down to a more manageable (and untaxable) sum.

Here, we’ll go over five elements of a sound estate plan.

Charitable Trusts – Laws to Consider

At the heart of a charitable trust is the leaving of your legacy to causes you wish to support. This type of trust is an excellent way to give back to the community while also minimizing the tax exposure of your estate. However, in order to give maximally and keep your estate’s tax burden down, it must be properly constructed. This way, it will adhere to the laws governing tax exempt status.

The Charitable Trust Act

For the most part, gifts are tax-free. You can give to your children, friends, and others without having to worry about monetary obligations to the government, all while minimizing the tax exposure of your estate after you pass on. There are certain rules that come into play when it comes to annual exclusion gifts, however. For those who transfer large amounts of wealth to others, there may be some tax implications.

Why Give Annual Exclusion Gifts?

First off, let’s look at why people give annual exclusion gifts. Aside from the desire to be generous to others, there are some financial benefits of doing so. It all comes down to estate taxes.

For wealthy individuals, the estate tax exemption is an important part of estate planning. This exemption is the amount you can transfer to your heirs without incurring estate taxes. As of 2018, the amount is $5.6 million per individual, totaling to $11.2 million for couples.

But what happens if you don’t use your full exemption? Under the 2010 Tax Act, this exemption becomes portable between spouses.

What Is Estate Tax Exemption Portability?

Philanthropic contributions not only serve the betterment of society, but they can also yield financial benefits in terms of reducing tax obligations. Charitable trusts in particular are invaluable when it comes to reducing your estate and minimizing estate taxes. In addition, they can provide other benefits during your lifetime.

CLTs and CRTs

First off, let’s take a look a the two types of charitable trusts you can create: charitable lead trusts (CLT) and charitable remainder trusts (CRT).

Out-of-state moves require a great deal of planning, but many people overlook one crucial aspect of the process—updating their estate plan. Different states have their own rules that may affect how a will is carried out, so it’s important to review your estate plan when you move.

Living Will

A living will sets forth your wishes regarding how you are to be cared for in the event you are rendered incapable of making your own decisions. Also known as an advance medical directive, this document is usually drafted in a way specific to the state in which you reside. Once you move, it’s possible that your current living will won’t be accepted.

Whether it’s something as simple as owning a home out of state or as dramatic as a difficult family situation, there are many factors you’ll need to consider when putting together your estate plan. Often, the vagaries of life will require you to revise your plans time and again, so even if you already have a will, trusts, and other important documents in place, you should see your attorney to make sure everything works out the way you want it to.

Here, we’ll go over a few of the ways your estate plan might get a little messy and what should be done about it.

Complex Assets

When you hear about trusts, you might think of them as merely existing for rich people who have way too much property for their own good. However, a trust can benefit you even if you don’t own millions in assets.

Main Benefits of a Trust

The main way that trusts benefit you is by transferring ownership of your property. This affords several benefits, including:

When creating an estate plan, most people think only of their will, but they are actually quite comprehensive. There are many things that can go wrong with an estate plan, whether it’s from a change in family situation for you or one of your beneficiaries, a sale or purchase that affects your assets, or some minor change in the law. Here, we’ll go over some of the most common pitfalls to avoid in putting together your estate plan.


Estate planning is not something you do only when you get old or when your life seems to be winding to a close. Some events cannot be planned for, and you may find yourself suddenly short on time. In addition, not every aspect of an estate plan has to do with your passing. A well-constructed plan will also include provisions for who can make decisions on your behalf if you become incapacitated, or detail who will get custody of any children still at home if you pass on. Having your plan together early will benefit you throughout your life, not just at its end.

Strategic business planning is key in running your organization, both in terms of staying afloat as a business and in managing risk, such as liability and regulatory compliance. It’s also a continual process-there are always changes in the market, your organization, and the law, so you’re never truly done planning.

It’s not a simple process, but there are a few things you can do to make it easier on you and the stakeholders within your business’s sphere of influence. Here, we’ll go over a few pointers for effective-and legal-strategic planning.

  • Involve your stakeholders: While executives and leaders are most often the ones with the overall vision for the company, you need to make sure those who will carry out your strategic business plan-any and all stakeholders-are involved in the planning process. Not only will this make certain they know the plan when it rolls out, but it can also inform the planning process in powerful ways.
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