A Minneapolis Estate Planning Lawyer Will Assist You With Your Advanced Estate Planning Needs
You have worked hard to build your estate by paying your mortgage, contributing to a retirement plan, investing any extra you had and managing it well with the idea of leaving some of it to your beneficiaries. Perhaps you plan to have this money care for your spouse upon your death, or to ensure a college education or first home for your kids or grandkids. But without taking the time (and yes spending the money) to obtain a complete estate plan, this could all be in jeopardy. Your assets could be tied up in court, or distributed to someone other than your preferred beneficiaries. Unique Estate Law regularly assists affluent families with such sophisticated planning strategies as Limited Liability Companies or Irrevocable Life Insurance Trusts and a wide range of charitable gifting techniques to reduce Federal Estate Taxes, Gift Taxes, and Generation-Skipping Transfer Taxes.
Minnesota Cabin Succession Planning
Cabin Succession Planning involves developing a plan to pass the family cottage to children and future generations for their shared use and enjoyment. A succession plan is designed to protect the owner, family members and the cabin property from threats of a forced cabin partition lawsuit and to establish equitable rules for the future operation, shared use, financing and management of the family cabin.
The key issues concerns when planning to leave a cabin to your family are:
• Ownership of any part of the cabin passing into the hands of a non-family member through death, divorce or creditor action.
• Failure of a family member to meet any or all financial commitments to the cabin.
• Handling internal conflicts between family members about how to operate, maintain and improve the cabin.
• A family member who does not want to own cabin.
• Disharmony between descendants when the older generation is no longer around to mediate a peaceful resolution.
Generally, most parents use an estate plan to leave their cabin equally to their children. While this is one way to pass on the cabin property and transfer ownership to others, it presents financial, legal and emotional risks to both heirs and the cabin. Avoid unnecessary risks or complications in passing on your family cabin. Contact Unique Estate Law now to speak with an estate planning attorney who can assist you in choosing the best method to pass on your cabin
Planning for Death Taxes
Whether there will be any federal estate tax to pay depends on the size of your estate and how your estate plan works. Many states have their own separate estate and inheritance taxes that you need to be aware of. There are many well-established strategies that can be implemented to reduce or eliminate death taxes, but you must start the planning process early in order to implement many of these plans.
Charitable Bequests – Planned Giving
Do you want to benefit a charitable organization or cause? Your estate plan can provide for such organizations in a variety of ways, either during your lifetime or at your death. Depending on how your planned giving plan is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes.
A well-crafted estate plan should provide for your loved ones in an effective and efficient manner by avoiding guardianship during your lifetime, probate at death, estate taxes and unnecessary delays. You should consult a qualified estate planning attorney to review your family and financial situation and your goals. Have the attorney explain the various options available to you. Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family in case the worst happens.
Irrevocable Life Insurance Trusts
There is a common misconception that life insurance proceeds are not subject to Federal Estate Taxes. While the proceeds are received by your loved ones free of any income taxes, they are countable as part of your taxable estate and therefore your loved ones can lose about half of the estate’s value to taxes. An Irrevocable Life Insurance Trust (“ILIT”) is created specifically for the purpose of owning your life insurance policy. A properly established and administered trust holds the policy outside of your estate and keeps the proceeds from being taxable to your estate. The proceeds from the insurance policy can then be used to provide your estate with the liquidity to pay estate taxes, pay off debts, pay final expenses and provide income to a surviving spouse or children. The ILIT will be the policy owner and beneficiary.
Once your trust is established, you use your annual gift tax exclusion to make cash gifts to your trust. Your beneficiaries forgo the present gift (in lieu of the future proceeds) and the trustee uses the remaining gift to pay the premium on the life insurance policy. There are many options available when setting up an ILIT. For example, ILITs can be structured to provide income to a surviving spouse with the remainder going to your children from a previous marriage. You can also provide for the distribution of a limited amount of the insurance proceeds over a period of time to a financially irresponsible child. Our firm is dedicated to helping clients make educated, informed, and creative decisions about their assets and will work with you and your team of financial advisors and CPAs to implement a highly sophisticated estate plan.
If you are interested in having an estate planning consultation, contact us today by filling out a contact form or calling us at (952) 260-2043 with any questions you might have. Feel free to check out our fees page for pricing information.