High Net Worth Estate Planning Attorney

You have worked long and hard, and you have made many sacrifices to take care of your family over the years. You want to make sure your loved ones are provided for even after you pass away. You should be able to do this without having to worry about your estate being subject to excessive taxation by the Federal government. Clients with a high net worth are exposed to greater estate taxes and must be conscious of this when formulating an estate plan. The attorneys at Longman & Van Grack work closely with high net worth clients to help them achieve their goals and minimize taxes using a variety of cutting edge techniques.

A description of some popular estate planning techniques for high net worth clients is as follows:

Qualified Personal Residence Trust (QPRT)
For most families, the primary or vacation home is among the most valuable holdings. A Qualified Personal Residence Trust is a planning strategy that allows transfer of a real estate asset to the successive generation in a highly tax efficient manner. The creation of a QPRT includes transferring of the property into an irrevocable trust. The grantor retains the right to use the residence for the term of the trust, which is usually shorter than what the grantor is expected to live. Once the term of the trust expires and the grantor is still alive, the residence passes to named beneficiaries at a valuation that is lower than its prevailing fair market value. The grantor can continue to reside there after this point but must pay market rates for rent to the beneficiaries.

Grantor Retained Annuity Trust (GRAT)
A GRAT involves the transfer of assets into an irrevocable trust from which the grantor is entitled to annuity payments. The payments are based on the value of the assets and are due in installments for the term of the trust. As long as the grantor survives the term the assets can be distributed to beneficiaries without being subject to estate taxes.

Irrevocable Life Insurance Trust (ILIT)
Life insurance proceeds can be considered part of an estate. In order to avoid taxes on proceeds, an ILIT trust can be used. In order for an ILIT trust to work, a trust must be created and ownership of life insurance policies must be transferred to the trustee. The insurance premiums must be paid using proceeds from gifts by the grantor that meet the annual exclusion limits. Then, the proceeds of the policy cannot be taxed when you die but they can be distributed to beneficiaries.

Family Limited Partnerships (FLP) or Limited Liability Companies (LLC)
This estate planning tool involves the formation of a partnership or company to which the grantor contributes assets. The owner of the interests does not retain control over the assets and cannot readily sell them. This limitation on the partners? ability to obtain fair market value for the underlying partnership creates a situation where the FLP or LLC is worth less than the actual assets, which results in less estate tax. The grantor then gifts interests in these assets to beneficiaries and in amounts appropriate for the gift tax exemption.

The attorneys at Longman & Van Grack work with high net worth clients in the formation of estate plans that transfer assets in the most efficient manner possible to their loved ones while minimizing death taxes and providing for asset protection. We will explain all of your options and help you to decide which plan is best for you. Our goal is always to transfer as much of your wealth as possible to your family. Please call Longman & Van Grack at (301) 291-5027 for a consultation today.