9 Advanced Estate Planning Strategies

9 Estate Planning Strategies

Estate Planning can be tricky and boring to read so here are 9 quick tips for advanced estate planning strategies.  Peace of mind, financial freedom and quality of life are your goals.  If you’re not achieving all of those right now, then schedule a strategy session with a fee-only financial advisor who works with local estate planning attorneys to help.

1. Irrevocable Life Insurance Trust (“ILIT”)

Generally, the face value of a life insurance policy is included in a taxable estate of the policy owner, and the proceeds are taxable for federal estate tax purposes.  ILIT is an irrevocable trust that is both owner and beneficiary of life insurance policies on the trust maker’s life.  ILIT is established for the benefit of someone other than the trust maker.  This excludes the trust from the trust maker’s estate and frees the proceeds from federal estate tax after the trust maker’s death and upon his/her spouse’s death.

2. IRA Preservation Trust (“IRA PT”)

This is the trust through which your beneficiaries will receive your IRAs after your death.

Potential Benefits

  • Ensures that the beneficiary will stretch out distributions over his/her life expectancy
  • Fully revocable
  • “Standby” device; funded with $10
  • Creditor/predator protection
  • Protects minor beneficiaries
  • Helps prevent termination of governmental benefits to special needs beneficiaries
  • Helps ensure proper distribution to your beneficiaries
  • Your surviving spouse can still be your primary beneficiary (qualified rollovers)

After death of both you and your spouse, your intended beneficiaries will receive their distributions through the IRA PT

3. Build-up Equity Retirement Trust (“BERT”)

BERT is an irrevocable trust that uses funds saved from annual exclusion and those that exhaust the lifetime gift tax exemption to generate wealth for your spouse that will be excluded from estate taxes upon your death.

BERT has the following advantages:

  • Assets are exempt from gift & estate taxes
  • Provides a “nest egg” for recipient spouse
  • When recipient spouse dies, distributions are tax free
  • Immediate creditor protection for both spouses and children
  • Effective as a flexible retirement account, with immediate funds available for individual/family needs
  • Divorce protection; not subject to division in court
  • Flexible planning for possible life contingencies

Fees are deductible for income tax purposes

4. Grantor Retained Annuity Trust (“GRAT”)

A GRAT is an estate planning tool used to make large financial gifts to family members with no gift tax requirement.  The trust maker places assets into an irrevocable trust and receives an annual fixed annuity.  When the trust expires, the beneficiaries receive assets as tax-free gifts.  This is used when passing large sums of money to later generations.

5. Testamentary Charitable Lead Trust (“TCLAT”)

TCLAT is a flexible way to offset any remaining portion of an estate that is exposed to tax when the grantor dies.  To do this, a grantor establishes a Charitable Lead Trust  (“CLT”) as part of his/her estate plan, and funding of the trust occurs at the grantor’s death.   At that time, a substantial amount of the grantor’s property passes to the CLT.  The income beneficiary of that CLT is the grantor’s chosen charity, as dictated in the revocable living trust.

A CLT can direct that at the end of the trust’s term, its assets pass to non-charitable trust beneficiaries free of estate and gift tax. The assets can pass outright to beneficiaries, continue to be held in trust for beneficiaries, or pass to trusts previously established for the beneficiaries.

6. Family Limited Partnership

A Family Limited Partnership is a limited partnership among family members, allowing joint ownership of family-owned assets.  This estate planning tool permits older family members to retain control of assets while teaching younger family members how to best manage them. One partner can transfer a portion of his asset ownership held within the partnership to other family members who are partners to the agreement.   Family Limited Partnerships can also help a family plan for the future by diversifying investments and achieving significant savings of gift, estate, and income taxes.

7. Generation Skipping Transfer Tax Planning (“GST”):

A Generation Skipping Transfer tax is a flat federal transfer tax assessed on property transferred from one generation to another generation which is more than one generation removed from the donor of the transferred property (e.g., the transfer of property from a grandparent’s trust to a grandchild with a skip over the generation in between).  Estate and Business Law Group assists in this kind of tax planning.

8. Dynasty Trust

This trust is for people who wish to pass substantial wealth to subsequent generations without estate and generation-skipping tax.  Under the federal law and most state laws, all assets are subject to federal estate taxes when they pass from generation to generation.  This trust assures that assets not used by one generation will pass to later generations without encountering federal or state estate or inheritance taxes.

9. Offshore Trust

An Offshore Trust is a trust created outside of the U.S. jurisdiction.  Some foreign nations provide better creditor protection than here.  In the United States, there is generally no asset protection for assets that you place in a trust created to benefit yourself and for which you are the trustee.  Creditors can then seize the trust’s assets as if they were owned in your own name.  An Offshore Trust can discourage frivolous lawsuits and protect against unforeseen liabilities arising out of a business or professional practice.

In summary, if you’ve tried getting answers to your estate plan, but still have questions, it’s not your fault.  If you’ve bought a “How To” book or went to a seminar and still have questions about estate planning, it’s not your fault.  Let’s work together to take the guesswork out of your financial future.  Schedule that Strategy Session with a fee-only financial advisor who works with an attorney to get the answers you’re truly looking for.


Until Next Time,



This material is for informational purposes only.  It is not intended to provide tax, accounting or legal advice or to serve as the basis for any financial decisions. Individuals are advised to consult with their own accountant and/or attorney regarding all tax, accounting and legal matters.

Investment advisory services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Adviser. SEC registration does not imply any level of skill or training.