Estate Planning Lawyers in Charlotte

Estate planning is an important process for everyone, but it is particularly important if you own significant assets or have a complex estate. In these cases, it is worth considering using an estate planning attorney to meet your needs. Estate planning techniques are designed to help you transfer your assets to future generations as smoothly as possible while considering the financial implications of asset transfer and minimizing your tax liability. In particular, people with significant assets or complex estates may want to consider the different types of trusts available and the implications of each. Without an estate plan in place, your family could be forced to sell a business, family farm, or other important property to pay off debts. Below are some of the most useful types of estate planning trusts used to protect assets, avoid probate, and reduce tax liability:

Using a QPRT allows you to protect your real estate by transferring it into a trust for the benefit of your beneficiary. This trust works by transferring the title of your real estate into the trust. You will still be able to use your property after you transfer into the trust so long as you reserve the right to live in the house and specify the number of years you will live in the house. Reserving the right to remain in the house is called retained income period. Using these types of trusts results in a lower gift tax rate because of how the IRS will calculate the value of your residence. For tax purposes, the value of your residence will be the full value minus the value of your retained interest. Thus, if you, the grantor, live in the residence for a long time, the value of the residence for tax purposes, in addition to appreciation, can be significantly reduced. However, if you pass away before the retained income period has expired, your house will return to your taxable estate as though you never made the QPRT. Thus, it is important to carefully consider how long your retained income period should last.

A GRAT is a type of irrevocable trust in which you transfer property to retain the rights to annuity payments for a specified number of years. The person creating the trust will pay a tax when the trust is initially established. The grantor will receive annuity payments each year for the specified years. When the term is up, the remaining value in the trust will be transferred to the beneficiary you name, with little or no tax obligations. However, like the QPRT, if the grantor passes away before the specified number of years, the assets return to the grantor’s estate.

When you establish a CRT, you will transfer a certain amount of your appreciated assets into the trust. The trustee will then sell those assets without paying capital gains taxes and will invest the income. The trust will then give you a specified amount of income every year for life. You can also select a beneficiary, such as your spouse, children, or grandchildren, to receive the trust income each year. When you pass away, the remaining assets will be distributed to a qualified nonprofit organization or a charity of your choice. Speak with an estate planning attorney to discuss the nuances of this type of trust.

The purpose of creating an ILIT is to protect the proceeds of your life insurance policy by avoiding estate taxes. The proceeds of life insurance policies can be subject to estate taxes. Using this type of trust will help you avoid paying those estate taxes on life insurance benefits, leaving more money for your beneficiary. Upon selecting beneficiaries and a trustee, you will transfer your life insurance policy into the trust. The proceeds from a life insurance policy are no longer considered part of your estate assets. When you pass away, the proceeds from your insurance policy will be automatically placed in the trust and kept there for the benefit of your beneficiaries. They will have access to the funds immediately, which is incredibly helpful especially when they need to pay for funeral expenses, taxes, and any other bills that arise.

If you are interested in creating an estate plan or updating your estate plan, our lawyers are here to help. We practice in area of general estate planning as well as advanced estate planning. Contact us today to schedule your initial consultation with one of our Charlotte, Mooresville, or Monroe estate planning attorneys.