Advanced Planning
A structured reference for transfer-tax strategies, family entities, directed trusts, situs, governance, and multigenerational stewardship.
32 reference entries
A blind trust places investment control with an independent trustee and limits the beneficiary's knowledge or influence, but the label alone does not satisfy any particular public-ethics, securities, tax, or conflict rule.
Key idea: A truly qualified arrangement may require divestiture, independent management, and regulator approval under the applicable regime.
Read the complete guideBusiness succession coordinates voting control, economics, leadership, buy-sell terms, valuation, liquidity, key relationships, and the owner's personal estate plan before incapacity, retirement, or death.
Key idea: Entity documents and buy-sell agreements can control transfers despite a will.
Read the complete guideCharitable planning can use direct gifts, beneficiary designations, donor-advised funds, split-interest trusts, or private foundations, each with different control, timing, valuation, administration, and tax effects.
Key idea: The charity's legal name and tax identification should be confirmed.
Read the complete guideA charitable lead trust pays charity first for a term or measured lives, then transfers the remainder to noncharitable beneficiaries; annuity and unitrust versions have different valuation and tax characteristics.
Key idea: A CLT reverses the order of interests in a CRT.
Read the complete guideA charitable remainder trust is an irrevocable split-interest trust that pays a qualifying noncharitable interest for a term or lives, with the remainder passing to charity; CRAT and CRUT payout designs differ.
Key idea: A CRT must satisfy statutory payout, duration, remainder-value, and administration requirements.
Read the complete guideA CRUT is a charitable remainder trust that pays a fixed percentage of annually revalued trust assets, so payments can rise or fall with value; permitted net-income variants add further rules.
Key idea: Annual valuation is intrinsic to the unitrust formula.
Read the complete guideCommunity-property law classifies ownership between spouses and can affect control, division, creditor exposure, federal reporting, and basis at death; nine states use a general community-property system and some states permit elective arrangements.
Key idea: Domicile, source of funds, agreements, and tracing can determine classification.
Read the complete guideA credit shelter trust is funded at the first spouse's death to use available exclusion and benefit family without ordinary inclusion in the surviving spouse's estate when designed and administered correctly.
Key idea: It is also called a bypass, family, or B trust in some plans.
Read the complete guideA directed trust divides traditional trustee functions among a directed trustee and one or more trust directors or advisers, such as separate investment, distribution, or family-business decision-makers.
Key idea: Titles and liability standards differ by state.
Read the complete guideA DAPT is a self-settled irrevocable trust formed under a state's statute that may protect a settlor-beneficiary from some future creditors if strict requirements are met; interstate, bankruptcy, fraudulent-transfer, and public-policy issues make outcomes uncertain.
Key idea: Only some states authorize self-settled spendthrift protection.
Read the complete guideA dynasty trust is a long-duration trust designed to hold and govern assets for multiple generations, often combining GST planning, beneficiary protection, and flexible fiduciary governance.
Key idea: Permitted duration depends on governing law and any rule against perpetuities.
Read the complete guideReal-estate planning coordinates title, management authority, debt, insurance, entity agreements, tax basis, liquidity, and property in multiple jurisdictions.
Key idea: A separate-state property can create ancillary administration.
Read the complete guideFamily governance uses agreed decision processes, education, communication, and role clarity to help a long-term plan function across people and generations; it complements rather than replaces legal documents.
Key idea: A family council, mission statement, and meeting cadence have no single required form.
Read the complete guideA firearms trust is a trust drafted to own and administer firearms under applicable federal and state law, including National Firearms Act procedures where relevant; it does not waive background checks, registration, transfer tax, possession limits, or local prohibitions.
Key idea: Federal rules distinguish NFA-regulated firearms from ordinary firearms.
Read the complete guideGST tax is a separate federal transfer-tax system for certain transfers to skip persons or skip trusts; exemption allocation and trust inclusion ratios require specific analysis.
Key idea: GST tax can arise as a direct skip, taxable distribution, or taxable termination.
Read the complete guideA generation-skipping trust is designed for beneficiaries two or more generations below the transferor, or other skip persons, with deliberate GST-tax allocation and distribution planning.
Key idea: A trust for grandchildren is not automatically GST-tax exempt.
Read the complete guideA GRAT is an irrevocable term trust in which the grantor keeps a fixed annuity and transfers remaining value to beneficiaries if asset performance exceeds the assumed federal rate and the structure succeeds.
Key idea: The remainder gift is valued at creation under statutory valuation rules.
Read the complete guideProperty acquired from a decedent often receives a basis tied to fair market value at the applicable valuation date under federal law, but exceptions, entity rules, community property, and estate-inclusion questions matter.
Key idea: A higher basis can reduce later gain; a lower value can also step basis down.
Read the complete guideAn IDGT is an irrevocable trust designed so a transfer can be complete for gift and estate tax while the grantor remains the income-tax owner; the 'defect' is intentional only in that tax-classification sense.
Key idea: Frequently paired with a gift and sale for a note, but neither step is automatic or risk-free.
Read the complete guideAn ILIT is an irrevocable trust designed to own or receive life insurance and manage proceeds, often seeking liquidity and exclusion from the insured's gross estate when ownership and administration rules are satisfied.
Key idea: Transferring an existing policy can trigger a federal three-year estate-inclusion rule.
Read the complete guideAn irrevocable trust is a broad category in which the settlor cannot simply reclaim or rewrite the arrangement at will; its tax, creditor, and control results depend on retained powers, beneficiary rights, funding, and governing law.
Key idea: Irrevocable does not mean unchangeable under every circumstance.
Read the complete guideA marital trust is a broad descriptive category for a trust designed to benefit a spouse; it is not one standardized tax classification, and only a trust that satisfies the applicable statutory terms and elections receives a federal or state marital deduction.
Key idea: The governing instrument may give the spouse mandatory income, discretionary principal, withdrawal rights, a power of appointment, or another defined interest; the label marital trust does not supply those rights.
Read the complete guideA noncharitable purpose trust holds property for a permitted purpose rather than ordinary human beneficiaries, typically requiring an enforcer and a state law that recognizes the purpose and duration.
Key idea: Recognition and permissible duration vary sharply.
Read the complete guidePortability can allow a surviving spouse to use a deceased spouse's unused federal exclusion, but the deceased spouse's estate generally must make a valid election on Form 706 or qualify for available relief.
Key idea: Portability is a federal election; state treatment may differ.
Read the complete guideA QTIP trust can qualify property for the estate-tax marital deduction while requiring income for the surviving spouse and preserving the first spouse's control over the remainder, if statutory terms and the executor's election are satisfied.
Key idea: The surviving spouse generally must be entitled to all trust income at least annually during life.
Read the complete guideA QDOT can permit a marital deduction for qualifying property passing to a surviving spouse who is not a U.S. citizen, while imposing U.S.-trustee, withholding, security, and distribution-tax rules.
Key idea: The QDOT election is generally made on the decedent's estate-tax return.
Read the complete guideA QPRT transfers a qualifying residence to an irrevocable trust while the grantor retains use for a fixed term, reducing the value of the taxable remainder gift if statutory requirements are met.
Key idea: Death during the retained term can cause estate inclusion.
Read the complete guideA trust named as retirement-account beneficiary can be drafted to pass plan distributions out to a beneficiary (conduit) or retain them (accumulation), but qualification, payout timing, tax rate, protection, and beneficiary eligibility must be analyzed under current retirement law.
Key idea: A trust is not automatically a designated beneficiary for retirement-rule purposes.
Read the complete guideA SLAT is an irrevocable lifetime gift trust created by one spouse for the other spouse and often descendants, seeking to move assets outside the donor's estate while preserving indirect family access through discretionary distributions.
Key idea: The donor should not retain an enforceable right to trust property.
Read the complete guideA state estate tax is generally assessed by reference to the estate, while an inheritance tax generally depends on what a beneficiary receives and the beneficiary's class; domicile and in-state property can both matter.
Key idea: State thresholds, rates, deductions, elections, and forms do not necessarily follow federal law.
Read the complete guideA third-party special needs trust holds assets contributed by someone other than the beneficiary and gives a trustee discretion to supplement the beneficiary's life without assuming the trust is invisible to every benefit program.
Key idea: Third-party and first-party trusts are not interchangeable.
Read the complete guideA Crummey trust gives beneficiaries temporary, real withdrawal rights intended to make contributions present-interest gifts for annual-exclusion purposes; the rights, notices, funding, and trustee conduct must be genuine.
Key idea: The name comes from a judicial doctrine, not a separate statutory trust form.
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