Family Wealth and Estate Planning Articles

As year-end approaches, individuals must prepare to review their 2025 tax situation. Our annual year-end guide highlights key opportunities and important updates that can lower tax liability and strengthen long-term financial planning.

A QTIP trust is an estate planning tool designed to provide financial security for a surviving spouse while preserving assets for designated beneficiaries, such as children from a prior marriage. It offers flexibility and potential estate tax benefits by deferring taxes until the second spouse’s death. This approach helps blended families achieve fairness and clarity in their long-term plans.

Making sure loved ones can easily access estate planning documents is essential to avoid stress and legal complications. Store originals, especially your will, in a secure, accessible location and share details with trusted family members or advisors. Clear communication about where documents are kept ensures your wishes are carried out smoothly.

A residuary clause in a will ensures that any assets not specifically mentioned—such as forgotten accounts or newly acquired property—are distributed according to your wishes. Without it, those assets may be subject to state intestacy laws, potentially leading to legal complications and family disputes. Including this clause adds flexibility and peace of mind by safeguarding your estate against future uncertainties.

A financial power of attorney ensures someone you trust can manage your finances if you become incapacitated, avoiding costly court proceedings. You can choose between a springing POA, which activates under specific conditions, or a durable POA, which takes effect immediately and allows for quicker action in emergencies. Pairing it with a health care POA and updating both regularly helps protect your wishes and your family’s peace of mind.

Beneficiary designations can override your will or trust, potentially disrupting your estate plan and causing unintended consequences. By naming both primary and contingent beneficiaries, updating them as life changes, and considering government benefit implications, you can ensure your assets are distributed according to your wishes and avoid unnecessary legal or financial complications.

OBBB panel discussion held on September 25, 2025, with experts from Lumsden McCormick and Bond, Schoeneck & King.

An Irrevocable Life Insurance Trust (ILIT) can help keep life insurance proceeds out of your taxable estate, reducing potential estate tax liability. By transferring ownership of a policy to an ILIT or having the trust purchase a new policy, you ensure the death benefit passes tax-free to beneficiaries. While ILITs offer significant advantages for high-net-worth individuals, they come with complexities such as gift tax considerations and loss of control, making professional guidance essential.

Intrafamily loans can be a flexible way to transfer wealth, support major purchases, and preserve family assets while offering tax advantages—when structured correctly. To avoid IRS reclassification as a gift, these loans must follow strict formalities, including charging interest at the applicable federal rate and documenting repayment terms. While financially beneficial, they carry emotional risks, so careful planning and professional guidance are essential.

A quiet trust, also known as a silent trust, is an estate planning tool that keeps beneficiaries unaware of the trust’s existence until a specified age or milestone. While it can preserve motivation and protect heirs from external pressures, it may also lead to missed opportunities or resentment. For some families, an incentive trust, which rewards responsible behavior may offer a more balanced approach.