As most people are aware, the last will is the most commonly utilized vehicle of asset transfer. Many people that trust lawyers speak with envision a solemn event taking place among family members after the funeral that centers around the family hearing the details of the will. The truth is that things do not end there.
Your estate must be probated if you utilize a last will to direct the transfer of your assets. During this interim, the probate court will supervise the administration of the estate. If your estate is properly planned, you will have selected a personal representative who will take care of the hands-on tasks that must completed during the process.
Because of the fact that the probate court will be examining the will to determine its validity while subsequently providing supervision as the estate is administered, it should be constructed with the realities of probate in mind. Every jurisdiction is different, so the wise course of action is to have one of our attorneys draw up your last will (if you do in fact decide that a will is the right vehicle to utilize).
To tie things together neatly, your attorney can then assist your personal representative after your passing as the estate is being probated. There are a lot of details that must be attended to during the probate process, and your probate lawyer will make sure that nothing is left undone.
In this manner, you would have a professional who is familiar with your wishes guiding the process. And at the same time, your attorney will have a great deal of experience dealing with the specific court that is supervising the administration of the estate.
Being in a position to bequeath a life-changing sum of money to your loved ones after you pass away is a mixed bag. On the one hand, it is comforting to know that you can provide for family members and be sure that they have a financial underpinning in place.
On the other hand, you may be concerned about how certain family members will react to a sudden influx of financial resources. This may be particularly true if you have someone in the family has not yet made his or her mark in the world as an individual. If you utilize a last will as your asset transfer vehicle, you would be passing along lump sum inheritances.
People have been faced with this situation throughout the generations, and one way that it can be addressed is through the creation of an incentive trust. With these trusts you name a trustee who will administer the funds in accordance with your wishes as elucidated in the trust agreement.
You can include stipulations that must be met before distributions to the beneficiary will be made. Some people will provide for distributions when certain educational benchmarks are met; others will do things to instill a work ethic, such as allowing for a dollar for dollar match of money earned by the beneficiary on a job.
These are just a couple of examples, but you could stipulate anything that you would like to in an incentive trust, as long as you are not requiring the beneficiary to do something that is illegal.
Grantor Retained Annuity Trusts
One of the great things about being American is the fact that it is actually possible to come up with a single idea that catapults you into a rarefied financial position. This is something that Facebook founders Mark Zuckerberg and Dustin Moskovitz have experienced firsthand, and they are truly residing within the American dream.
Coming into extraordinary wealth is the good news. The fact that enormous tax bills loom is the bad news. If you want to preserve your wealth for the next generation and generations yet to come, you have to plan ahead intelligently.
Forbes tells us that these two young moguls executed the “zeroed out” grantor retained annuity trust strategy to preserve some wealth back in 2008. This involves placing into the trust, securities that will appreciate beyond the standard IRS estimate over the trust term. Facebook shares prior to their IPO would certainly fit the description of highly appreciable securities, so they reportedly implemented this plan to perfection.
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As you can see, there are a wide range of possibilities when it comes to estate planning. If you would like to learn more about them, attend one of our upcoming free seminars. Admission is free, but we urge you to click this link to register right now, because space is limited.