It has often been said that the greatest gift you can leave for your family and loved ones is a well-crafted estate plan. A comprehensive estate plan, designed to ensure that your assets pass to your intended beneficiaries in an efficient manner, begins with a consultation from an experienced and knowledgeable estate planner. A comprehensive estate plan requires careful consideration of the types of assets you have and the coordination of your various estate planning documents and non-probate beneficiary designations. A well-crafted estate plan will also include planning for the management of your assets if you become incapacitated or if you for any reason would benefit by having another party assist with the management of your assets. The attorneys at the Vitollo Law Firm are glad to work with you, your accountant, financial planner and other advisors as necessary to make sure your estate plan is structured according to your wishes.
Wills and Healthcare Powers of Attorney
Your Last Will and Testament is used primarily to direct who you desire to receive your assets upon the completion of the probate process, who you desire to serve as the Personal Representative of your estate, and who you desire to appoint as the guardian of any minor or disabled children. Your Healthcare Power of Attorney is used to appoint another person to make healthcare decisions for you if you are unable to make healthcare decisions for yourself, and to express your intentions concerning end of life care.
General Durable Powers of Attorney
Your General Durable Power of Attorney is used most often to appoint another person as your agent to manage your finances in the event you are unable to do so for yourself. Preparation of a GDPOA can help your loved ones avoid a court proceeding to request the appointment of a third party to manage your finances and your other legal affairs in the event you become incapacitated. A GDPOA can be specially drafted if you desire for your agent to be able to make gifts.
Revocable Living Trusts
Your Revocable “Living” Trust is primarily used to avoid probate. A Revocable Living Trust is generally drafted to become effective during your lifetime, and many individuals choose to serve as the initial trustee of the trust. The trust document would also name a successor trustee to be appointed upon your death or incapacity, and the trust document can be amended and revised so long as you are living and possess the requisite mental capacity. Any assets transferred to the trust during your lifetime, or by way of a non-probate beneficiary designation upon your death, could most often be distributed to your intended beneficiaries outside of the probate process. If you are married, the attorneys at the Vitollo Law Firm can review your circumstances with you to determine whether a joint trust might be appropriate, or whether separate trusts for each of you would better accomplish your estate planning goals.
An irrevocable trust generally cannot be modified once it is executed. Irrevocable Trusts take many forms and can be used for various purposes, including asset protection, estate and gift tax savings, and preserving assets for descendants in the event that a surviving spouse remarries after the creator of the trust has passed away. Assets of an irrevocable trust generally are not subject to the claim of a creditor of your probate estate, which creates a number of asset protection planning opportunities. Examples of irrevocable trusts include Irrevocable Life Insurance Trusts (ILIT’s), used to prevent life insurance proceeds from being subject to the federal estate tax; Qualified Personal Residence Trusts (QPRT’s), used to facilitate the transfer of an ownership interest in a residence to one or more beneficiaries, while allowing the grantor to maintain possession of the residence; Intentional Grantor Trusts (IGT’s), used to minimize or eliminate the gift tax that would be imposed on certain beneficial transfers; and Qualified Terminable Interest Property trusts (QTIP’s), used to obtain the federal estate or gift tax marital deduction by allowing the creator of the trust to provide for a surviving spouse, while maintaining control over who receives the assets upon the surviving spouse’s death. The attorneys at the Vitollo Law Firm can review your circumstances with you to determine whether an irrevocable trust is advisable for you and to discuss your options concerning the various types of trusts.
Supplemental Needs Trusts
A Supplemental Needs Trust or Special Needs Trust is used to supplement the federal and state benefits received by a disabled beneficiary, by complying with federal guidelines that make it possible to set aside funds for the “supplemental needs” of a disabled beneficiary when there are no governmental benefits available for that same purpose. Distributions from a properly drafted and administered Supplemental Needs Trust can be made for the benefit of a disabled beneficiary without disqualifying the beneficiary from receiving governmental benefits or reducing the amount of the benefits the beneficiary would otherwise receive. The attorneys at the Vitollo Law Firm can help you determine the most effective way for you to make provisions for a disabled beneficiary.
Estate and Gift Tax Planning
South Carolina does not have a state inheritance or death tax; however, if you have sufficient net worth to be subject to the federal estate tax, there are gifting and planning options available to reduce or eliminate the estate tax that would otherwise be owed. The attorneys at the Vitollo Law Firm can assist you in planning your estate to minimize your estate tax liability using a number of techniques, including use of the annual gift tax exclusion, the estate and gift tax marital deduction, shielding life insurance proceeds from the application of the estate tax, and utilizing creative lifetime gifting strategies.
Failure to properly structure your beneficiary designations, or failure to keep your beneficiary designations up to date, can have a devastating effect on an otherwise well-structured estate plan. Common mistakes includes failing to update designations upon the birth of a child, a change in marital status or the death of an intended beneficiary, as well as leaving assets directly to a disabled beneficiary. If your net worth consists heavily of bank accounts, brokerage accounts or retirement accounts, there is a good possibility that the bulk of your wealth will pass by way of non-probate beneficiary designations, and the attorneys at the Vitollo Law Firm can assist you in structuring and updating your beneficiary designations as necessary to achieve your estate planning intentions.