Trusts, Estates and Personal Planning
|Our Trusts, Estates and Personal Planning group offers a unique blend of planning experience, technical expertise and responsiveness to our clients’ needs. Estate planning requires skills in many areas—income and estate tax, corporations, partnerships and limited liability companies, marital property, real estate, financial management and insurance to name a few. Equally important, however, is sensitivity to the emotional needs of the participants. Experience has taught us that how things are done can be as important as what is done. We try to bring technical expertise to bear on the situation, as well as an awareness of the human side of the equation.||
Chair: Michael D. Carrico
Our Skills and Experience
Estate plans are as varied as the individuals who make them. Here are several types of clients we work with, and some of the options that frequently meet their needs:
Younger singles and families frequently have goals in mind besides estate planning—for example, building an estate to plan, or saving for retirement or college expenses. With a busy schedule, who has time to sit down with a lawyer to talk about an event decades away?
We understand these needs and organize our services accordingly. We have developed questionnaires and client information aids that allow clients to work on estate plans at their convenience, not ours. We are able to accommodate busy schedules and provide the documentation for estate plans with the minimum of hassle and wasted time.
Owners of businesses face unique problems and opportunities in their estate planning. Successful planning focuses not only on how to cope with the estate tax burden, but also on how to deal with the loss of key business personnel: A succession plan needs to be developed and implemented, drawing not only upon legal principles, but upon the complex emotional and business requirements of the participants and the enterprise.
We are ready to advise business owners on obtaining optimal discounts for minority interests and drafting the necessary documents to achieve business and family objectives.
Our review of life insurance coverage can provide a needed second opinion beyond that of an individual insurance agent. Once the structure of the insurance is decided, we can provide trusts, partnerships or other documentation to achieve liquidity goals without exposing the insurance proceeds to estate or income tax.
A single person, with or without children, has special estate planning needs. For example, we often assist single persons with the important, and sometimes difficult, choice of executor, trustee and attorney in fact.
Prenuptial agreements, domestic partnership agreements, other property agreements and trust arrangements are frequently used to protect couples and their respective heirs. We are available to resolve, sensibly and amicably, the delicate issues presented by live-in or soon-to-be-married couples.
After ensuring financial security, individuals often turn their attention to gift-giving to younger generations and to charitable planning. Systematic annual giving can yield substantial estate tax benefits, as well as the satisfaction of seeing loved ones enjoy some of their expected inheritance. Careful selection of the property given can reduce the tax paid in future estates, coordinating with other aspects of the overall plan to magnify the benefits of giving.
Charitable planning alternatives range from tax-advantaged outright gifts to establishing family foundations, charitable trusts (including both charitable remainder and charitable lead trusts), donor advised funds and supporting organizations.
Individual retirement accounts and other qualified plan interests often pose special challenges because of the potential for income and estate taxes being imposed on distributions. We advise clients on how to best integrate the disposition of these accounts into the rest of the estate plan and can provide referrals to other financial professionals who can address sophisticated, though essential, issues such as optimal distributions in light of the minimum distribution requirements.
If clients have substantial assets and tax minimization is one of their goals, planning for the entire family is essential. The generation-skipping transfer tax must be considered, and its personal exemptions should be used wisely. By considering the family as an economic whole, we can help minimize the total tax burden, yet maintain availability of income (and principal when needed), investment flexibility and control over the ultimate disposition of family wealth.
Common Problems: Powers of Attorney and Living Wills; Planning for Minors; Federal Estate Tax Reform; the Washington Estate Tax
Too frequently, people neglect to take very simple steps, such as signing a durable power of attorney, to plan for the possibility of a serious illness or other debilitating condition. One important goal in any estate plan is making sure this possibility is considered—for example, signing up-to-date health care powers of attorney (including language addressing recent federal privacy rules) and living wills (or "health care directives").
Unplanned and untimely receipt of wealth by minor age individuals can be very expensive, both in terms of guardianship outlays and human costs. Several alternatives are available, and choosing among them is sometimes difficult. We provide the benefit of the collective experiences of others to help make the best choice for the child, including advice on how best to use Section 529 plan accounts.
Since 2001 we have been waiting for the Congress to decide on whether to repeal the federal estate tax, or whether to restructure it with perhaps substantially different exemptions and tightened rules. While the Obama administration supports continuation of the federal estate tax (including elimination of the “repeal” in 2010), the fate of its reform proposals is far from certain. We can provide you the best advice available on how to plan for this uncertainty.
In May 2005, Washington enacted a new, onerous estate tax. For high net worth individuals, it can mean between 5% and 10% more in overall estate taxes. Many can substantially reduce this new burden by updating current planning documents, careful use of lifetime giving or, sometimes, moving out of Washington.
Planning for Real Estate
For many individuals, income real property constitutes a significant portion of their estates. These individuals face the same problems and opportunities as do business owners and, in addition, face the unique problems of real estate. Liquidity, succession planning, title issues, passive loss rules, the form of business organization and ownership, estate tax valuation and Washington estate tax avoidance issues are all relevant.
Unfortunately, not all disagreements about estates, trusts and other property arrangements can be resolved to everyone’s satisfaction. For those occasions when efforts to resolve the dispute fail, we are ready to advise clients on the merits of their position, to vigorously advocate on their behalf and to take steps to bring the dispute to a speedy close, through mediation, arbitration or judicial proceedings. Because of the technical nature of disputes concerning wills and trusts, we typically will team a member of the Trusts, Estates and Personal Planning group with a member of our Litigation group, so that each can provide his or her special expertise and judgment.
With the help of outside professionals, our attorneys guide U.S. citizens, non-U.S. citizens and multinational families with property and rights in more than one country through the complexities of cross-border succession planning and investing to minimize global tax liabilities. In addition to legal and tax planning, we pay careful attention to nontax issues that promote family harmony and long-term successful stewardship of family assets. To accomplish our clients’ objectives, we assist in:
- Structuring ownership of U.S. investment and business interests through corporations, trusts, partnerships and limited liability companies, based on a client's needs and tax position
- Advising on asset protection and pre-immigration planning for international executives and other individuals preparing to move to the United States
- Counseling foreign investors regarding tax and equity structuring issues in connection with investments in U.S. real estate
- Guiding executors of foreign individuals who leave taxable property in the United States through U.S. estate settlement
- Advising U.S. persons who receive gifts, inheritances or trust distributions from abroad regarding U.S. tax implications and reporting obligations