Family Wealth and Estate Planning Articles

When choosing between traditional and Roth 401(k) contributions, consider both current and future tax implications as well as estate planning goals. Traditional 401(k)s offer immediate tax deductions but are subject to required minimum distributions (RMDs), potentially reducing the amount passed to heirs. Roth 401(k)s, while funded with after-tax dollars, allow for tax-free withdrawals and are exempt from RMDs starting in 2024, making them a valuable tool for estate planning.

A dynasty trust allows individuals to preserve and protect substantial wealth for multiple generations, potentially avoiding federal gift, estate, and generation-skipping transfer (GST) taxes. It can be established during one's lifetime or through a will and offers significant tax benefits and flexibility in designating beneficiaries. While irrevocable, it provides a lasting legacy with various protections and conditions for descendants.

A Family Advancement Sustainability Trust (FAST) can help with your estate planning goals, such as minimizing taxes and preparing heirs to manage wealth responsibly. Typically funded through life insurance, a FAST provides a structured governance system with various committees to manage investments, distributions, and administrative tasks. Establishing a FAST can also help bridge leadership gaps and support the personal development of younger family members. Consult an estate planning advisor for detailed guidance.

Understanding the tax implications of selling business property is crucial due to the complex rules involved, particularly regarding long-term capital gains and recapture rules. Different types of property, such as Section 1245 and Section 1250 properties, have specific tax treatments that must be carefully considered. For detailed guidance on specific transactions, professional consultation is recommended.

This article discusses five essential elements for effective estate planning, which are holistic coordination, current beneficiary designations, trust funding, correct asset titling, and ongoing plan review.

The article explains the concept of undue influence and provides tips to protect your estate plan from undue influence claims, such as using a revocable trust, verifying competency, preventing the appearance of undue influence, communicating with family, and including a no-contest clause.

Digital assets often leave no paper trail, making it crucial to include them in your estate plan to ensure your family can locate and access them. Take inventory of your digital assets, provide access instructions, and ensure your representatives have the necessary legal consent to manage these accounts; contact us for further assistance.

Neglecting international holdings in estate plans may lead to dual taxation, as U.S. citizens face federal taxes on global assets which could also be taxed abroad. Although a foreign death tax credit might mitigate this, it’s not guaranteed, and professional advice should be sought.

A Health Savings Account (HSA) offers affluent individuals a strategic way to reduce healthcare costs and federal taxes while enhancing their retirement savings and estate planning. HSAs allow tax-free withdrawals for medical expenses and provide unique benefits for beneficiaries, particularly spouses, allowing for continued tax-free growth and usage.

In estate planning, “tangible personal property” encompasses items like jewelry and antiques, which, despite their emotional value, can cause disputes among heirs. To prevent conflict, it’s advisable to designate specific items to particular beneficiaries in your will or trust.