Estate Planning

Revocable or Living Trusts

Entity created for you to manage and control your assets during your lifetime, but which also provides the most effective and comprehensive mechanism to:

  • Avoid expensive and time consuming probate proceedings in the event of death while maintaining total management and control of assets;
  • Avoid expensive and time consuming conservatorship proceedings (court appointment of individuals to manage your finances) in the event of incapacity.
  • Ensure that your family has immediate access to your assets upon death without the delay of intestacy or probate proceeding which can tie assets up for months, occasionally years;
  • Ensure privacy in the distribution of your estate.
  • Significantly reduces the risk of a challenge to estate distribution;
  • Avoid the need for multiple probate proceedings. Probate is required in the state of domicile of the deceased as well as wherever real estate is located;
  • May provide some protection from creditors and long term care expenses;
  • Can provide long term financial security for your beneficiaries;
  • Can provide significant sheltering opportunities from transfer taxes imposed at death.  These advantages can be realized for multiple generations.  

Testamentary Trusts

Testamentary trusts come into existence after death, unlike revocable living trusts which come into existence before death. They are typically used to allow a competent individual or institution to manage and distribute assets for the benefit of minor, immature, or incompetent individuals until they are able to competently manage their own finances. A testamentary trust can also be designated as a beneficiary of life insurance proceeds or retirement accounts to ensure that substantial sums of money can provide for the health, education, maintenance and support of your beneficiaries.

The rules governing the Trustee who manages the trust are typically included in your Last Will and Testament. You can dictate the manner and time at which funds are to be distributed.  Trusts can be used to ensure long term financial security for your beneficiaries through properly drafted distribution provisions.  Trusts are also a source of asset protection from divorces, lawsuits, bankruptcies, and long term care expenses.  

Tax Sheltering

Upon your death a final tax return will have to be filed with the IRS. At this point it will be determined whether or not your estate must pay estate tax. The estate tax is a tax that is levied against your assets at the time of your death (after eligible deductions) if your estate exceeds the estate tax exemption amount. The exemption is the amount of assets you can pass to your heirs “estate tax free”. You may pass an unlimited amount of assets to a surviving spouse free of estate tax.

The federal estate tax laws have a current exemption of $5,340,000 in effect until January 1, 2015 for persons passing away in 2014. This is up from $5,250,000 for persons passing away in 2013.  Any assets passed to heirs (other than a U.S. citizen surviving spouse)  in excess of $5,340,000 are subject to an estate tax of up to 40%.  Many people think that their estates will not be subject to estate tax.  Unfortunately, this may be a misnomer, as death benefits from your life insurance over which you have “incidents of ownership” are counted as part of your gross estate and are subject to estate tax.  If you can change a beneficiary on your life insurance, you have "incidents of ownership".

Marital Deduction Trusts are a tool to take advantage of the “unified tax credit”. In essence it is possible, with appropriate planning to shelter your estate from the estate tax in whole or in part. These are funds that can pass to your beneficiaries not the IRS.

It is also important to note, that if your estate is subject to estate tax the IRS does expect payment within 9 months of death creating significant liquidity problems for estates that consist of assets that are not readily disposable such as real estate, or businesses.

Irrevocable Trusts

  • Irrevocable Life Insurance Trusts

These are trusts designed to remove assets from a taxable estate while achieving significant tax deductions with funds that would otherwise be payable to the IRS. Irrevocable trusts can be used to fund childrens education, make charitable contributions, create income for individuals who are real estate rich but income poor, or to meet divorce obligations vis-à-vis the support of children.


  • Wills can be simple and complex wherein they include tax planning and/or testamentary trusts

Basic estate planning tool to ensure that a court will honor your wishes as to the distribution of your property upon death, and can be a vehicle to specify who will assume guardianship of your minor children should you pass. In the absence of a will, a court will look to the intestacy statute to determine the distribution of your estate. A will does not avoid probate.

Powers of Attorney

Financial powers of attorney enable the agent that you have nominated to manage your assets, legal affairs, and financial decision making in the event of your unavailability or incapacity. Financial powers of attorney can be written to broadly to cover many unanticipated scenarios. They can also be narrowly written to enable an agent to deal with specific personal matters. A well drafted broad financial power of attorney will enable your agent named in the document to contract on your behalf, apply for government benefits which you would be eligible for, engage in nursing home expense planning, deal with the IRS on your behalf, pursue any claims or litigation that you may have an interest in, and handle your assets in general.  A financial agent has a fiduciary duty to act in your best interests.

Medical powers of attorney enable the agent named in the document to make medical decisions on your behalf in the event of your incapacity.

Both documents are necessary to avoid court proceedings to have a guardian and/or conservator appointed if you experience an incapacitating medical event.

Living Will-Advance Directives

A “living will” is a document wherein you specify the circumstances under which you do not want your life artificially extended by the use of life sustaining procedures or substances and therefore be allowed to die in the normal course of events.

The purpose of this document is to decide for yourself if and when life support is to be removed when there is no hope for recovery. The living will gives comfort to family members as it enables them to avoid the painful decision of ending life.