Trust Based Plans
Primary Trust Plan/PTP
Offers all that PWP offers, but includes important advantages such as potentially avoiding a court intervention to determine incapacity. It is designed to completely avoid the probate process, to the extent trust is properly and completely funded with all assets to which client currently holds title individually, including all assets client acquires (after implementing trust) until client’s passing. While its advantages are many over the PWP, it is commonly used to assure strategic use of first to die spouse’s lifetime exclusion, e.g., for Minnesota resident, United States citizen spouses with assets in excess of one million dollars. This plan is designed to be flexible, but with the current federal estate tax law uncertainty, it may require revision depending upon how federal or state tax law changes impact your specific situation.
Documents associated with this plan include all PWP documents above, plus:
> Will is a “pour over” or catchall secondary (not primary) document, designed to pour over any probate assets into your RLT.
> Revocable Living Trust (“RLT”) as primary means of asset management and transfer, with deferred beneficiary payouts via outright distributions.
> By-Pass/A-B Trust/Marital/Credit Shelter Trust: assets in excess of exclusion amount (MN: 1 million or Federal: 3.5 million; client strategically chooses which to plan for) fund this trust and qualify for the unlimited marital deduction, i.e., no estate taxes due at first-to-die spouse’s passing.
> QTIP: protect and fund surviving spouse’s standard of living. At second spouse’s passing, remaining assets (after tax) go to first-to-die spouse’s beneficiaries; thus, assets avoid inclusion in second-to-die spouse’s estate. QTIPs are common in affluent, blended family situations.
Advanced Trust Plan/ ATP
Designed primarily for taxable estates, and clients who are charitably inclined or who have beneficiaries with special needs, likely to qualify for or already receiving government benefits. Also provides considerable advantages over PTP, including long-term guidance or control over retirement asset disposition, creditor and divorce protection, and is the plan for business owners who wish to continue their business through succession planning. Ancillary documents typically include incorporation documents, buy-sell agreements, deferred compensation/non-compete agreements and funding, key-person agreements, irrevocable life insurance trusts, purchase agreements, and the like. This plan will be customized for your specific situation, so it will be priced according to your needs and wishes.
Documents associated with this plan include all PTP documents above, and various other documents to address Client’s specific goals and wishes.
> Additional stand alone trusts to accomplish sophisticated planning objectives, including:
· Beneficiary-Trusteed Sub-Trust(s) vs. Outright Distributions in PTP RLT.
· Charitable
· Wealth Replacement/Life Insurance Trust (ILIT)
· Supplementary (others) and Special Needs (self)
· Business Continuation and Succession Planning (buy-sell and transfer of corporate interests)
· Legacy Protection and Heritage Maintenance
o IRA Stand Alone Heritage Trust
o Family Bank Trust
o Dynasty Trust (subject to state law restrictions)