Individuals with substantial estates require advanced tax planning strategies to help reduce significant tax liabilities during their lifetime and for their heirs after passing. A living trust is one tool high- and ultra-high-net-worth clients can consider. When a grantor transfers assets to a living trust, they can specify how those assets will be managed and distributed upon death.
While trusts vary by type and depend on where you live, in this video, Opes Wealth Co-President Mark Duvall explains the two primary reasons you may consider incorporating a living trust in your tax and estate plan:
- Asset Separation: Assets held in a living trust provide two significant benefits after the passing of a spouse:
- Capturing the Lifetime Estate Exemption: With an established trust, a portion of a couple’s assets are set aside into an irrevocable trust that will avoid estate taxes and capture potentially millions of dollars in tax benefit.
- Beneficiary Clarity: Without a living trust, assets typically pass to a surviving spouse upon the death of one member of a married couple. A living trust ensures the deceased individual’s beneficiaries actually receive assets according to their wishes.
- Avoid Probate: When a trust or will is not in place, estate assets typically pass through probate, a court proceeding determining how and to whom to distribute the deceased’s assets. A living trust helps clients’ estates bypass this lengthy, costly process, saving their heirs time and money.
Many complexities are involved with establishing and managing trusts, such as determining the appropriate type, understanding varying tax treatments, and addressing state-specific requirements. To make an informed decision regarding your unique circumstances, we recommend consulting with your financial advisor and in some cases, an estate attorney, to discuss your options and the advantages and disadvantages of using a trust. A professional can also explain other possible solutions to help reduce taxes when transferring wealth and integrative financial best practices to create a comprehensive, cohesive strategy.
With over 30 years of experience, Mark has helped clients in high-cost and high-tax areas navigate the opportunities and challenges of their financial lives, often guiding them in complex trust and tax-related matters. Learn more about how we integrate tax considerations into financial strategies for high-net-worth clients. If you want to optimize your financial plan for taxes, real estate, or other priorities, complete the Personal Financial Snapshot today so we can learn more about how we can assist you.
Written by: Mark Duvall
Disclaimer: Case Studies are provided for illustrative purposes only to provide an example of the firm’s client base, process, and methodology. The experiences portrayed herein are not representative of all firm clients. Other individual outcomes may vary based on their individual circumstances, and there can be no assurance that the firm will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of the firm’s financial and investment advisory services. Client tax situations are unique and specific, and you are encouraged to consult a tax professional to analyze your specific situation. This material has been prepared for informational purposes only, and is not intended to provide tax, legal or accounting advice; nothing contained in these materials should be taken as such. The opinions expressed in this article are not intended to provide specific advice or recommendations for any individual or on any specific tax strategy or security. The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Opes Wealth Management cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Advisory services are only offered to clients or prospective clients where Opes Wealth Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Opes unless a client service agreement is in place.
