Legacy Trust Case Study

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Legacy Trust Case Study

Legacy Trust

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Estate Plan Concerns

Bill and Ann want to make sizable gifts to their children, but also would like for these gifts to benefit their grandchildren and later generations.

► Gifts Should Avoid Estate And Gift Taxes

It is important to Bill and Ann that the gifts be arranged to avoid estate and gift taxes.

They also realize that the assets they give to their children will likely be subject to estate taxes in their children’s estates when they die.

► Protect Against Lawsuits and Divorce

Bill and Ann are also concerned about the threat of possible future lawsuits and divorce, and they wonder whether anything can be done to assure them that the gifted assets can be protected and preserved for their family.

Estate Plan Solution

Bill and Ann have decided to use a special type of an irrevocable trust, known as the Legacy TrustSM as part of their gifting strategy.

► Special Irrevocable Trust Eliminates Taxes For Generations

This trust will allow Bill and Ann to make gifts to a trustee, who will hold the gifted assets for the sole benefit of their family for many generations (up to 360 years for a trust located in Florida).

Careful planning can eliminate gift and estate taxes on these assets, not only for Bill and Ann, but also at the death of each generation, until the trust finally ends.

► Protection From Lawsuits And Divorce Keeps Assets For Beneficiaries

Assets of the trust can be protected against possible lawsuits and divorce, allowing assets to be preserved for the beneficiaries of the trust.

Legacy TrustSM Process

How the Legacy TrustSM Process Works

  1. Bill and Ann create a irrevocable Legacy TrustSM for the benefit of many generations of their family.
  2. Bill and Ann transfer selected assets to the Legacy TrustSM. This gift may be sheltered from gift tax by the Bill’s and Ann’s gift tax exemptions or annual gift tax exemptions or annual gift tax exemptions or annual gift tax exclusions and from generation skipping transfer tax by allocations of their GST exemptions.
  3. Assets held by the Legacy TrustSM avoid estate tax and generation skipping transfer tax at Bill’s and Ann’s deaths.
  4. The trustee of the Legacy TrustSM manages assets for the benefit of many generations of the Bill’s and Ann’s family. Assets are protected against potential judgments creditors, divorce and estate taxes for all generations until the end of the trust.
  5. Benefits
  • Tax-Free Wealth Preservation: Selected assets can be held for the benefit of many generations of an individual’s family, free of gift tax, estate tax, and generation skipping transfer tax.
  • Wealth Management: Wealth is preserved and managed for the benefit of the family.
  • Asset Protection: Wealth is protected against potential judgment creditors, divorce and the beneficiary’s imprudence.
  • Customized Flexibility: The trust offers design flexibility to accommodate your personal goals and objectives.
  • Explanation

The Legacy TrustSM is a special type of irrevocable trust that can provide comprehensive benefits for an individual’s family for many generations.

► Irrevocable Trust Laws Have Changed In Many States

Until recently, such trusts were by law limited in duration—practically speaking to only 2 to 3 generations of a family.

Now, a number of states have changed their laws to permit longer durations. Florida now permits such trusts to last for up to 360 years. Other states allow longer durations.

Still others allow trusts to be perpetual. This change in the law has created dramatic planning opportunities that simply were not possible in the United States until just a few years ago.

► Benefits For Centuries Possible With Additional Features

The Legacy TrustSM in many ways is similar to a conventional irrevocable trust that is created by an individual (called the “grantor”) for the purpose of receiving and holding assets that will avoid estate tax at the grantor’s death.

Beyond this conventional platform, however, the trust contains additional features allowing assets to be effectively managed and protected for the benefit of the grantor’s family for many generations to come—perhaps spanning centuries.

► Built-In Protection Against Poor Judgement

In addition to managing wealth, the Legacy TrustSM also is designed to preserve and protect it—from potential judgment creditors, from divorce and perhaps from a family member’s poor judgment.

► Minimum Generation Skipping Transfer Taxes Plus Maximum Control

The trust is also designed to make the best use of your generation skipping transfer tax at all generations until the trust ends. Perhaps the most attractive feature of the Legacy TrustSM is that, within broad parameters, the trust can be custom designed to suit your personal goals and objectives as to how your wealth should be managed for future generations of your family.

► Flexibility To Enhance Benefits

Note that other planning techniques may be used with the Legacy TrustSM to enhance benefits or increase the amount of wealth that is ultimately transferred to your family.

Tax Reduction Formulas To Protect Your Future

Periodic Table of Estate Planning Elements
We provide unique tax minimization formulas, based on a customized strategic combination of IRS-approved investment programs and technical tools, which lead to maximum asset protection, to defend against the many known and unknown volatile forces that risk the prosperous future you and your heirs desire and deserve.

View our Estate Planning Periodic Table to see the many options we have available to custom-design an estate plan that exactly meets your specific goals for the future.

The following notice is required by the IRS: Any U.S. Federal tax advice contained in this communication is not intended to be written or used, and cannot be used or relied upon, to avoid tax-related penalties under the Internal Revenue Code, or to promote, market or recommend to another any tax-related matter addressed herein.

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