Creative Wealth Preservation Techniques

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2013 VADA Family Convention Greenbrier
Clark Associates Estate Planning July 27, 2016
By John P. Dedon 1775 Wiehle Avenue, Suite
400 Reston, Virginia 20190 (703)
218-2131 John.Dedon_at_ofplaw.com
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Financial Objectives

• Build family wealth during life
• Control, enjoy and protect it during life
• Preserve it upon death for beneficiaries

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Obstacles

• Income taxes
• Estate Taxes
• Probate Costs
• Predators (Asset Protection)

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Current Estate Tax Law

• Federal Estate Tax Exemption 5 Million
• Indexed for inflation
• 5,450,000
• Portability
• 40 Federal Estate Tax Rate

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Planning for the Couple with Assets under 11
Million

• Focus on asset management
• Trusts to protect and manage inheritance
• No gifting for estate tax reasons
• Income tax planning may be more important than
  estate tax planning

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Planning for the Couple with Assets in Excess of
11 Million

• Continue to use transfer tax planning techniques
• Gifts to GST trusts
• Sales to grantor trusts
• GRATs
• Charitable lead trusts
• SLATs
• Watch basis of gifted assets

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Non-Tax and Non-AdministrativeObjectives and
Concerns

• Children from a previous marriage and second
  spouse
• Children with creditor, financial, or marital
  problems
• Children with special needs

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Probate Obstacles

• Cost
• Time Delays
• Publicity
• Property In Multiple States
• Hassle
• Avoid Probate With Revocable Living Trust

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What is a Revocable Living Trust?

• Will Substitute
• Grantor is Beneficiary and is Trustee
• No Income Tax Consequence
• Uses Social Security Number
• No Trust Return

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BASIC PLANNINGSHOULD INCLUDE

• Wills
• Revocable Living Trusts
• Advanced Medical Directives (Living Wills)
• Powers of Attorney

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How do Assets Pass Upon Death?

• Will
• Revocable Living Trust
• Beneficiary Designation
• Title