Trust and Estate Planning
Put every piece in place.
When most people think of trust and estate planning, they think of their attorneys. But CPAs can – and should – play an invaluable role in the process, too.
After all, the purpose of trust and estate planning is to protect your hard-earned assets and allow them to grow so they can sustain you in retirement and then pass to your designated heirs. While trust and estate planning definitely requires carefully executed legal structures, it also requires keen-eyed financial examination geared to both your circumstances and objectives. Trust and estate planning is not limited to the assets you will ultimately leave behind; it also embraces assets you inherit, as well as those you may be responsible for overseeing as an executor or trustee. Properly done, it’s a strategic, multi-generational exercise.
Key Considerations
Deferment.
The issue of trust and estate planning is intertwined with one of life’s least pleasant and most unavoidable facts. For this reason, people often put off trust and estate planning, which can result in significant tax implications as well as failure to protect assets from various wealth-eroding factors. Lack of timely action can also result in a trust being legally established, but not properly funded, rendering it effectively inoperative.
Liquidity.
Trust and estate plans must be flexible enough to allow for liquidity to meet expenses, whether those of the grantor/testator or of the estate or trust itself.
Unawareness.
Federal and state laws governing trusts and estates are even more complex than other U.S. tax laws. While trusts and estates provide tremendous opportunities to build multi-generational wealth, they must be constructed and administered carefully in order to avoid unnecessary losses to taxation (income, estate, capital gains, state and local). The need for attentive stewardship carries over to beneficiaries, trustees and executors.
Expertise
The Singer & Falk approach to trust and estate planning starts with our clients’ objectives.
A widow may come to us with little or no experience in tax and financial matters. An executor may arrive with no sense of what taxing authorities require. Or, of course, a client may mention that they are ready to consider how they are going to ensure a comfortable retirement or provide for the next generation(s). We take seriously our role as guides and educators while listening carefully to clients’ stories. When possible, we collaborate with the rest of our clients’ professional teams, including attorneys and investment advisors. Our approach to tax planning is the same as for other clients: to employ legal strategies to minimize taxes and preserve wealth, over multiple generations. We also work closely with investment advisors to ensure that liquidity needs can be met. And because federal and state laws around estate and inheritance taxes – as well as eligibility for late-life support (e.g. Medicare and Medicaid) – are constantly-changing, we build a lot of flexibility into our approach. We also perform a full range of compliance functions, including preparation of Form 1041 (U.S. Income Tax Return for Estates and Trusts), various state filings and Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return), as well as ensuring that Crummey notices to beneficiaries are properly executed and distributed.
Contact us when you want a comprehensive and compassionate understanding of tax and financial issues related to a trust or estate, whether you are the testator/grantor, beneficiary or executor/trustee.
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