Estate planning
Estate Planning is an ongoing process that puts an individual’s affairs in order to maximize the benefits that an individual’s assets can provide to him during his lifetime, and to his family after his death. Estate planning insures that a person’s assets will pass to those persons that he designates in a manner that will give them the maximum benefit, reduces or eliminates taxes on the estate and on the estates of future generations. Estate planning also plans for a person's incapacity and illnesses.
An basic estate plan usually consists of a will, living trust with Wealth Preservation Trust planning, power of attorney, designation of health care agent, and living will. After an individual has a basic estate plan in effect, advanced techniques may be used to achieve additional tax savings and wealth preservation. These techniques include family limited liability companies, life insurance trusts, qualified personal residence trusts, and grantor trusts.
A person’s estate plan should be reviewed periodically, and promptly after any important life changing event, such as a birth, death or divorce, a large increase or decrease in net worth, a substantial change in types of assets, purchase or sale of a business, change of residence, or change in law.
An basic estate plan usually consists of a will, living trust with Wealth Preservation Trust planning, power of attorney, designation of health care agent, and living will. After an individual has a basic estate plan in effect, advanced techniques may be used to achieve additional tax savings and wealth preservation. These techniques include family limited liability companies, life insurance trusts, qualified personal residence trusts, and grantor trusts.
A person’s estate plan should be reviewed periodically, and promptly after any important life changing event, such as a birth, death or divorce, a large increase or decrease in net worth, a substantial change in types of assets, purchase or sale of a business, change of residence, or change in law.
Income Tax Planning
Income tax planning involves using sophisticated techniques to avoid or defer income taxation, or shift the taxation of income to the lowest possible income tax bracket. Often, these techniques use family limited liability companies, trusts, and carefully structured tax favored investments.
Asset Protection Planning
Asset protection planning is the process of organizing a person’s financial affairs and assets in advance, so as to protect them from loss. The planning may either protect assets entirely or improve a person's negotiating position in the event of a judgment against him. Businessman who may guarantee a business' debts, professionals who may be sued for malpractice, wealthy individuals who may be the target of "nuisance" lawsuits, parents of children who are married or about to marry and individuals who own real estate all may benefit from asset protection planning.
Asset protection planning must be done in advance. State “fraudulent conveyance” statutes give current and foreseeable creditors the opportunity to set aside transfers undertaken to hinder, delay or defraud their bona-fide collection efforts.
Creditors’ lawsuits only make economic sense when there is a sufficiently high likelihood of an actual recovery should the plaintiff prevail. If a person has structured his holdings in advance in a fashion that makes collection difficult, (i) a would-be plaintiff will be less likely to pursue litigation in the first place, and (ii) a plaintiff who actually pursues a lawsuit to a successful conclusion will be less likely to collect on the judgment he obtains. Such a structure deters plaintiffs from initiating lawsuits, and encourages the settlement of any lawsuits that are commenced.
Asset protection planning uses sophisticated plans that typically consist of investments in protected assets, transfers between spouses, family limited liability companies, and domestic and foreign trusts. Properly done, the planning is tax neutral. The creditor protection should not come at increased income, estate or gift tax cost.
Asset protection planning must be done in advance. State “fraudulent conveyance” statutes give current and foreseeable creditors the opportunity to set aside transfers undertaken to hinder, delay or defraud their bona-fide collection efforts.
Creditors’ lawsuits only make economic sense when there is a sufficiently high likelihood of an actual recovery should the plaintiff prevail. If a person has structured his holdings in advance in a fashion that makes collection difficult, (i) a would-be plaintiff will be less likely to pursue litigation in the first place, and (ii) a plaintiff who actually pursues a lawsuit to a successful conclusion will be less likely to collect on the judgment he obtains. Such a structure deters plaintiffs from initiating lawsuits, and encourages the settlement of any lawsuits that are commenced.
Asset protection planning uses sophisticated plans that typically consist of investments in protected assets, transfers between spouses, family limited liability companies, and domestic and foreign trusts. Properly done, the planning is tax neutral. The creditor protection should not come at increased income, estate or gift tax cost.