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Spring: A Time for Renewal in Estate Planning

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I always think of March and April as new flowers, new loves, and new beginnings. In the Estate Planning world, it’s a great time to think about not only the next generation but planning for several generations to come.

Let’s do a quick tune-up.

Key Elements of Your Estate Plan

Do you have a Trust/Will set up (including medical directives, etc.)? This is the basic building block of your estate. You will direct your assets to be transferred or liquidated and passed along according to your wishes to those you love or your favorite charities. The Simple A/B Trust, the By-Pass Trust, or the Marital “I love you” Trust, will create an A (above ground) use of monies. The B side (below ground), will create a new trust with its own tax ID and limited instructions to the remaining spouse or family members on how these proceeds can be used.

The wording can be be quite liberal and all-inclusive. You can add provisions that take care of your minor children for either your first or ongoing marriages. This is used usually when one has adult children from one marriage and minor children from another.

The next type of popular trust, and there are many more, is designed to protect someone who cannot fully take care of themselves. This is called a Special Needs Trust. We use this to create a lifetime income for someone with a handicap to keep them from running out of money. Personally, the Generation Skipping Trust is always interesting for those who have adult children that don’t need your proceeds. Ideal if you want to ensure that your lifetime of assets will work for the next few generations to come, leaving a bit of a personal legacy. Check out more details below.

Estate Planning

The Simple A/B Trust

This trust divides the estate into two parts upon the first death: the “A” trust (or marital trust) for the surviving spouse’s benefit, and the “B” trust (or bypass trust) that holds assets up to the estate tax exemption amount. The “B” trust is irrevocable, reducing the taxable estate of the surviving spouse.

The Bypass Trust

This is designed to bypass the surviving spouse’s estate to directly benefit the heirs or next of kin. It allows the deceased’s estate to utilize their federal estate tax exemption without leaving the surviving spouse without access to the funds. The surviving spouse can still receive income from the trust’s assets, but the principal often goes to the heirs tax-free upon the surviving spouse’s death.

Father gardening with children

The Marital “I Love You” Trust

This is a straightforward will or trust where one spouse leaves all assets directly to the surviving spouse. It’s based on the premise of total trust and affection, with the belief that the surviving spouse will use the assets wisely and pass them on to the children or other designated heirs. However, it does not provide tax advantages or protect against creditors.

Special Needs Trust

Designed to provide for a loved one with disabilities without disqualifying them from government assistance, such as Medicaid or Supplemental Security Income (SSI). The trust holds assets for the benefit of the individual, allowing them to receive necessary care and support while maintaining eligibility for public benefits.

Elderly care for special needs trust

Enhancing Your Legacy Through Charitable Giving

Charitable Remainder Trusts are used when you wish to donate property, stocks, or cash, or an interest in them to a designated charity. Many folks replace the titles to reflect new ownership. More complicated is using real estate, in particular, rental property. Here you have the ability to separate streams of rental income from the actual principal. Growing quickly is the use of annuities, in particular, low-cost annuities. Using a “Stretch” program with annuities can have your assets continue to grow and provide income for generations to come, even up to 100 years.

Collaborate with Professionals for Your Estate Planning

Lawyers are used, or online legal programs, to write trusts. We cannot do this. But we can sit with you and diagram out your wishes and goals, which could lower the legal costs and make this exercise more rewarding.

Let’s remember that we all have the ability to leave a legacy to our families and charities. Let’s think beyond ourselves and be an impact player on the next or less fortunate generations. For more information, give us a call at 925-314-8503 or email me at

Expert Insights

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