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Beware of naming a trust as the beneficiary of an IRA. Your
spouse can roll over an IRA and make it their own; a trust cannot.
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The annual gift tax exclusion is now $11,000 per gift, per
donee.
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A "529" Education Trust account can be funded immediately
with five (5) years of gifts, for a child, grandchild, etc.,
(i.e. $55,000, or for a married couple $110,000).
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A "529" Account is exempt from income and estate
taxes when properly used.
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Review your estate plan annually. It's important and we do
not charge for annual reviews.
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A disclaimer, an irrevocable refusal to accept an inheritance,
can be an effective way to provide a legacy to the next generation
without having it included in your estate.
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Out-of-state residents may serve as an executor in Virginia
on a will, but most must post a surety bond and appoint a local
agent with the court. There is no restriction on a non-resident
serving as a trustee on a Virginia trust.
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Read your beneficiary designation forms carefully. If you name
your children as a beneficiary of your IRA on your form, make
sure that you know where the IRA goes if your child predeceases
you; to your grandchildren or to your other children?
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An ILIT may even provide an inheritance to your beneficiaries,
estate tax free, to replace wealth following the transfer of
appreciated assets to charity and may also reduce estate taxes
by removing insurance proceeds from your estate.
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A Special Needs Trust (SNT) is specifically designed to provide
income and principal support for a beneficiary who is or may
become eligible for government assistance. The SNT will supplement
government entitlement programs and may provide long-term security
for a disabled beneficiary. The SNT, however, must be carefully
drafted to ensure that the beneficiary is not cut off from government
benefit.
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A Creditor Protection Trust (CPT) will take property out of
your name and control for asset protection against lawsuits
or creditors. Virginia does not allow a CPT but it can be used
to protect future generations of your descendants without being
included in each generation's taxable estate.
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A Planned Benefit Trust, PBT, can be used to control the distributions
from your IRAs to your beneficiaries after your death rather
than leaving it to their judgment (or lack thereof).
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A Charitable Remainder Trust (CRT) may be established if you
intend to leave money or property to a charity. A CRT can be
used to avoid capital gains taxes on highly appreciated assets
and provide current income to you and your spouse, but the trust
is irrevocable. There are several benefits to using a Charitable
Trust, one of which is a current income and tax deductions.
If you think that a revocable or an irrevocable trust may be of
benefit in attaining your estate planning goals, we would be happy
to meet with you in our office at your convenience to review your
current plan.
