Reasons to consider advanced estate planning strategies

On Behalf of | Nov 29, 2022 | Probate & Estate Planning |

Pennsylvania residents from all walks of life can benefit from the process of having a simple will or trust drafted as a means to ensure that their assets can pass to beneficiaries outside of probate. However, for those lucky enough to hold assets of significantly higher taxable value, rather more advanced estate planning may well be in order.

Potential benefits of advanced estate planning

When contemplating what will happen to sizable assets after death, many high-net-worth individuals grow concerned over the possible tax burden they will leave behind for beneficiaries. Not only does a high rate of estate taxation cause potential financial difficulties for those inheriting the assets, it also works to undermine the decedent’s overall testamentary objectives.

Fortunately, there are a number of advanced estate planning strategies that can be used to lower or eliminate estate tax obligations, and these include vehicles such as:

  • Grantor retained annuity trusts (GRATs)
  • Charitable remainder trusts (CRTs)
  • Spousal Lifetime Access Trusts (SLATs)
  • Irrevocable gifting trusts

In addition, it is possible to utilize family limited liability companies (LLCs) or irrevocable life insurance trusts (ILITs) as effective tools for aiding in wealth transfer to future generations while greatly mitigating the estate tax burden that might otherwise result.

Achieving objectives through careful planning

While it is true that the aforementioned advanced estate planning techniques can yield tremendous savings and efficiencies for those looking to distribute substantial assets when they die, it is critical that thorough consideration be given to each estate plan option before decisions are made.

It must always be borne in mind that irrevocable trusts are just that — unable to be altered, even if circumstance change. As such, it is wise to undertake a comprehensive assessment of family goals to try to anticipate — and sidestep — any scenarios capable of disrupting the estate plan at some point in the future.

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