Top 10 Legacy Planning and Estate Planning Techniques

Estate planning is a meaningful way to protect your assets. Legacy planning is a type of estate planning that allows you to pass on your wealth smoothly and effectively to your children and grandchildren. Creating a comprehensive and tailored estate plan will reflect your goals and legacy. At Arnold & Smith, PLLC, our experienced estate planning lawyers will use some or all of the following tools to craft an estate plan that suits your needs and preserves your unique legacy.

A revocable living trust is a legal document that allows beneficiaries to avoid the lengthy, and often hostile, probate process. Creating a revocable living trust will allow you to manage your property during your life. Revocable living trusts also enable you to ensure your assets are well-managed after your death. By creating a revocable living trust, you can ensure that your loved ones immediately receive your assets after your death while avoiding the probate process.

Creating a durable power of attorney will help you name an agent you trust to manage your financial affairs should you become incapacitated, such as paying your bills and managing your investments. A durable power of attorney is essential.

A health care power of attorney is also critical. These are legal instruments that you use to appoint someone to make health care decisions on your behalf if you become incapacitated and you are no longer able to make medical decisions for yourself. You can also make your preferences known for extraordinary methods in a medical emergency.

Many of our clients can benefit from taking advantage of the annual gift tax exclusion. Using this technique allows you to give your loved one’s gifts without subjecting them to federal or state estate and gift taxes and without using your lifetime gift tax exclusion.

An irrevocable life insurance trust will prevent estate taxes on the proceeds your loved one will receive from the insurance policy. The trust owns your life insurance policy, and when you pass away, the proceeds of the life insurance policy will transfer automatically into the trust so your loved one’s can use the funds right away.

If you own a family business, you should consider creating a family limited partnership. These legal entities are used to provide asset protection for property owned by the family business from one of the partner’s creditors. Doing so also provides limited partners protection from creditors and allows children and parents to give their loved one’s gifts while maintaining their management control.

This type of trust is specifically used to designate assets that your children and grandchildren can use for their education. These types of trusts allow people to ensure that their children and/or grandchildren use their funds for the sole purpose of obtaining an education and not use the money on other pursuits.

Charitable remainder interest trusts allow you to transfer property into a charitable trust and retain your own income stream from the property in the trust. The donor will receive an income tax deduction for the charitable contribution. You can also avoid capital gains taxes on the property transferred into the trust.

A fractional interest trust allows a donor to transfer his or her partial interests in certain types of property, such as real property, to someone else. You will be able to obtain fractional interest discounts for estate and gift tax purposes.

Creating a private foundation can be incredibly beneficial. Families with significant assets often use private foundations to receive gift, income, or estate tax deductions while allowing their family members to retain control over the assets within the foundation.

The dedicated estate planning lawyers at Arnold & Smith, PLLC are ready to help you create a robust estate plan. We help our clients create estate plans that allow them to pass down their estate to their loved ones while avoiding tax liability as much as possible. We will carefully review your financial situation and work with you to understand your needs and goals. Contact our estate planning lawyers today to schedule your initial consultation at our Charlotte, Mooresville, or Monroe office.