Legacy Wealth Planning Frequently Asked Questions

Legacy Wealth Planning is the creation of a definitive plan for managing your total wealth while you’re alive, distributing your estate how you choose after your death, and a clear plan to pass on your legacy. Your estate includes all assets of any value that you own. This includes non-financial assets as well as financial assets, including real property, business interests, investments, insurance proceeds, retirement accounts and personal property. Your legacy incorporates important decisions ensuring your family core values, responsible behaviors and community involvement are passed on to future generations. Keep in mind, your legacy also includes personal effects, such as family heirlooms, stories, and accumulated wisdom and life lessons of your family.

Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for enjoyment and future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain intact as it passes to your beneficiaries, instead of being siphoned off to government processes and bureaucrats.

Traditional estate planning is focused on financial assets and is concerned with avoiding probate and estate taxes. On the other hand, Legacy Wealth Planning is concerned with financial and non-financial assets of a family and creating a family’s personal legacy plan. Legacy Wealth Planning addresses how to capture and transfer family traditions and values, as well as protecting financial wealth for current and future generations.

A Family Wealth Trust is the main component of a Legacy Wealth Plan and covers important issues other than avoiding probate.

Not only does a Family Wealth Trust provide for the disposition of your property (like a Will), but it also offers the following benefits:

1. Provides for the immediate transfer or trust management and distribution in the future of assets after death;
2. Allows for a smooth transition of management upon incapacity or death;
3. Avoids the expense and hassle of probate proceedings;
4. Minimizes estate taxes and defers payment of estate taxes for married couples;
5. Allows for continued control over assets after death or incapacity;
6. Provides security to you and your loved ones;
7. Protects your children’s inheritance from their own potential divorce;
8. Safeguards your estate for your kids if your surviving spouse remarries;
9. Offers flexibility.

YES. In fact, most people who create a Family Wealth Trust act as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your trust. In the event of a mentally disabling condition, your hand-picked successor trustee assumes control over your affairs, not the court’s appointee.

NO. The purpose of creating a Family Wealth Trust is to avoid living probate, death probate, and reduce or even eliminate federal estate taxes. It’s not a vehicle for reducing income taxes. In fact, if you’re the trustee of your Family Wealth Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.

YES. In fact, all real estate should be transferred into your Family Wealth Trust. Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Family Wealth Trust, there is no probate anywhere.

No. A Family Wealth Trust can help anyone who wants to protect his or her family from unnecessary probate fees, attorney’s fees, court costs and federal estate taxes. In fact, the Family Wealth Trust offers substantial protection for your family, regardless of your total estate. In addition to savings at death, especially if your estate is over $100,000, the Family Wealth Trust also provides savings and peace of mind during life, because it avoids the expense and emotional nightmare of an incapacity or “living probate” proceeding. Also, a Family Wealth Trust protects spouses in the event of remarriage after one spouse dies and affords greater protection for children.

The best approach is to meet with an attorney who understands the Legacy Wealth Planning process. This will ensure you address the financial and non-financial assets of your family. The right attorney will help you, first, set up a Family Wealth Trust to preserve your financial legacy. Then, you will be educated about completing the My Legacy workbook, to share in your own words about your life story, family history, memories, and life lessons. And finally, writing a Legacy Planning Letter to distribute your cherished possessions with sentimental value.