Key Estate Planning Strategies for Executives

May 23, 2024

Executives manage complex financial landscapes while striving for professional success, creating unique estate planning goals and challenges. Central Trust Company shared insights in the article “Estate Planning For Executives,” which focused on liquidity concerns, tax efficiency and beneficiaries for certain assets. This article explores key estate planning strategies for executive’s unique goals.

Executives often face liquidity challenges and may have a significant portion of their wealth tied up in company stock. Diversifying investments and implementing strategies to manage concentrated stock positions are critical to mitigate risk and enhance financial security.

Navigating tax-efficient giving strategies is essential for executives looking to give back to their communities or support charitable causes. Estate planning considerations, including lifetime gifts and the transfer of vested stock options, play a crucial role in preserving wealth and minimizing tax liabilities.

Transitioning from a successful career to retirement can be exciting and daunting for executives. Planning for retirement involves forecasting complex benefits, managing investment portfolios and ensuring a smooth transition from the accumulation phase to the distribution phase of their financial life.

Comprehensive estate planning for executives includes strategies that address their income tax bracket, estate tax rates and various types of investments. Strategies such as wills, trusts, powers of attorney (POAs) and advance directives are central to protecting an executive’s assets and support building wealth.

A knowledgeable and experienced estate planning attorney is central to a holistic plan that meets an executive’s goals, including:

Reducing taxes and taxable estate values.
Transferring stock options and other nuanced investments to heirs.
Preserving or building their wealth.

Key Estate Planning Strategies For Executives:

Address Unique Challenges: Consider liquidity, stock options, estate taxes and beneficiaries.
Maximize Tax-Efficiency: Explore tax-efficient strategies to preserve wealth.
Build a Comprehensive Plan: Include wills, trusts, and POAs to address diverse financial needs and goals.
Define Personal Objectives: Define personal philosophies and objectives to create a comprehensive plan that aligns with your vision for the future.

Given the complexities of their careers and wealth management needs, executives face unique financial and estate planning challenges. Addressing key concerns and defining personal objectives helps executives secure a financial future for themselves and their families. If you would like to learn more about estate planning for wealthy couples and families, please visit our previous posts.

Reference: Central Trust Company (July 19, 2023) “Estate Planning For Executives”

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Maximizing Tax-Free Giving to Children

May 21, 2024

In the ever-evolving landscape of wealth management, affluent estate owners choose to support their children and grandchildren financially during their lifetimes. While the desire to make a positive impact is evident, navigating the tax implications of such generosity can be complex. Fortunately, several strategies exist to facilitate tax-efficient giving, while maximizing the benefits for donors and recipients. Based on Kiplinger’s article, “Three Ways to Give to Your Kids Tax-Free While You’re Still Alive,” we explore three strategies that can maximize tax-free giving to children in your estate planning.

One estate planning strategy leverages possible tax breaks on capital gains. Beneficiaries of assets that increase in value have traditionally received a break if the IRS calculates capital gains tax based on the inherited value, not when the decedent purchased the asset. The inherited asset’s higher valuation is considered a “stepped-up cost basis” and lowers capital gains tax on any increase in value.

You can give to your children during your lifetime and get capital gains tax breaks if the recipient’s taxable income falls below certain thresholds. If a single child’s taxable income is below $47,025 or a married child’s is below $94,050, they may pay zero capital gains tax upon selling the asset. Note that these tax breaks apply to capital gains. Estate taxes are a different story.

The gift tax exclusion allows individuals and married couples to give money to a child and maximize tax efficiency. Individuals can contribute money to a child’s college education or the down payment on a home as a gift. In 2024, the exclusion amount is $18,000 per recipient or $36,000 for married couples engaging in split gifts. With the lifetime federal exclusion set at $13.61 million per person, most individuals can engage in tax-free giving without exceeding their lifetime allowance.

Specific expenditures, such as educational or medical expenses and direct payments to institutions, are excluded from the annual gift limit and lifetime exclusion. This direct payment strategy allows donors to support significant financial obligations, such as college tuition or medical bills, without impacting their gifting allowances. Donors can provide meaningful support to their children and grandchildren while minimizing tax implications.

While maximizing tax-free giving is essential, assessing the broader impact of financial support on recipients is essential. By incorporating gifts into a comprehensive financial plan, donors can align their generosity with their financial objectives and ensure sustainable support for future generations.

Key Tax-Free Giving to Children Takeaways:

Giving to a Child Tax-Free: Take advantage of tax breaks to give to a child in your lifetime.
Giving in Your Lifetime: Maximize the tax advantage of giving money to a child during your lifetime.
Paying for College: Transferring money directly to a child’s college does not impact the gift tax exclusion limit.

Maximizing tax-free giving allows affluent parents to support their children and grandchildren, while minimizing tax liabilities. Implement gifting strategies and consider the broader financial impact to leave a lasting legacy and support loved ones. If you would like to learn more about minimizing taxes in your estate planning, please visit our previous posts.

Reference: Kiplinger (April 10, 2024) “Three Ways to Give to Your Kids Tax-Free While You’re Still Alive,”

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A Psychiatric Advance Directive is an Additional tool to Consider

May 16, 2024

Comprehensive estate planning today includes elder law and other strategies that help protect your assets and interests if you experience cognitive decline or incapacity. Have you thought about protecting your mental health and care if you can’t advocate for yourself? Based on the Trust & Will article “Guide to Psychiatric Advance Directives – What You Need to Know,” we explore psychiatric advance directives (PADs), their purpose and how to establish them. A Psychiatric advance directive is an additional tool to consider in your overall estate plan.

You might not have heard of psychiatric advance directives (PADs). However, they might be an important strategy in your estate plan. PADs are instructions and preferences for your mental health care. Similar to a living will or advance medical directives, PADs are a legal document outlining your preferences for psychiatric treatment should you become unable to make decisions due to a mental illness crisis. Picture it as your roadmap, guiding healthcare providers on your treatment choices, from medications to therapies, even during challenging times when communication might be difficult.

Psychological and physical health are essential for an individual’s overall wellness. Psychiatric advance directives proactively communicate your psychological treatment preferences, empowering an advocate for your mental health care.

Consider it a letter of instructions to a trusted friend or family member and your healthcare team, ensuring that your wishes are respected and understood regarding your choice of psychiatric provider and mental health facility.

You probably know about advance medical directives and medical powers of attorney in estate planning. Most PADs have these two components. It’s crucial to meet state-specific requirements, such as being of legal age and having witnesses. Remember, PADs come into effect when you’re determined unable to make mental health decisions, often by a qualified mental health professional.

Key Psychiatric Advance Directives (PADs) in Estate Planning Takeaways:

What Are PADs? PADs are legal documents that include advance medical directives and powers of attorney outlining one’s mental health wishes.
Why Have PADs? Instructions and guidance for psychological care when an individual is incapacitated.
How to Establish PADS? Requirements are the same as advance medical directives and a medical POA.

Your mental health matters, and A psychiatric advance directive is an additional tool to consider in your overall estate planning. Speak to an Estate Planning or Elder Law attorney to discuss your needs and how a PAD may play a role. If you would like to learn more about advance directives, please visit our previous posts.

Reference: Trust & Will “Guide to Psychiatric Advance Directives – What You Need to Know,”

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Alternatives to Avoid Guardianship as You Age

May 15, 2024

Individuals often overlook strategies in their estate planning to avoid restrictive guardianship if they become incapacitated. While guardianship protects individuals who cannot decide or act for themselves, it can inadvertently strip them of their autonomy. There are alternatives to avoid guardianship as you age.

The restrictive nature of a court-appointed guardian acting on behalf of an impaired individual doesn’t account for that person’s wishes. In a video titled “Alternatives to Guardianship,” The American College of Trust and Estate Counsel (ACTEC) highlights essential guardianship alternatives that preserve a person’s autonomy. This article discusses the need for protection as we age, what guardianship is and how powers of attorney (POAs) are alternative estate planning strategies that give individuals more control over decision-making.

Aging and estate planning go hand-in-hand. Estate plans with strategies that address cognitive decline and incapacity protect you from financial risks, including misuse of assets or unauthorized withdrawals. When it comes to healthcare, individuals must retain control over medical decisions. They may not be honored if you are incapacitated without legally documented healthcare wishes.

Guardianship involves the legal authority granted to a court-appointed guardian to act and make decisions for a person who is physically or mentally incapable. The guardian oversees the person’s health, medical care and property. When an individual is evaluated and deemed incapacitated, a court will assign a guardian.

A guardian’s responsibilities include making personal care decisions, overseeing living arrangements and handling their financial affairs. They are required to keep detailed records and check in with the court regularly. However, guardianships are often appointed without considering alternatives, and they strip an individual of all decision-making authority, including where they live, what they eat and whether they will get any medical care. ACTEC notes that guardianship can be hurtful to the family, in addition to being an expensive process.

A power of attorney (POA) is a legal document that appoints someone you trust to act on your behalf. Only a durable power of attorney is valid if you are incapacitated. There are different POAs to protect your financial interests and medical wishes.

To prevent financial risks if you are incapacitated, a financial power of attorney names an agent with authority over financial matters, such as accessing bank accounts, paying bills and managing retirement accounts, real estate and investments.

A medical power of attorney is a healthcare or advance directive that allows someone else to make medical decisions based on your wishes. Often called a health care agent, this person follows your medical treatment as outlined in the document.

Key Guardianship Alternatives Takeaways:

Common Risks as We Age: Financial loss and unwanted medical care.
Typical Cons of Guardianship: Total loss of autonomy with court-appointed guardians.
Important Benefits of POAs: More control of your wishes and asset protection.

Elder law and estate planning strategies that protect you as you age should not be synonymous with surrendering autonomy through guardianship. Individuals can confidently navigate this terrain by exploring alternatives to avoid guardianship as you age. If you would like to learn more about guardianships, please visit our previous posts.

Reference: The American College of Trust and Estate Counsel (ACTEC) (May 13, 2021) “Alternatives to Guardianship”

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The Estate of The Union Season 3|Episode 7

The Estate of The Union Season 3|Episode 5 is out now!

May 14, 2024

The Estate of The Union Season 3|Episode 5 is out now! Millennials continue to be a mystery to everyone – except Millennials! In this fourth part of Millennial Mysteries, Brad and his Millennial son, Sam, discuss and review a movie they recently saw: Civil War.

Be aware that Boomer Brad thinks this is one of the WORST movies he has ever seen – and Sam, of course, one of the BEST – they’ll explain why!

They have a very entertaining discussion on how movies affect Millennials and what Millennials want to see in movies. And this movie has been highlighted and promoted as a cautionary tale of what could happen in our country in the future!

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 3|Episode 5 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.

Topics You need to Address before a Mid-Life Marriage

May 8, 2024

Today’s wedding couple is as likely to be 30 or 50 years old as they are to be in their twenties. This trend underscores the importance of having open discussions about finances and retirement before exchanging vows. A recent article from Next Avenue, “The Talk Over-50s Should Have Before Tying the Knot.” Whether you’re getting married for the first time or the second, being closer to retirement has major financial implications. There are topics you need to address before a mid-life marriage.

The most important thing is to disclose each person’s financial situation completely. For some people, this includes their retirement goals and lifestyle choices. What are the potential healthcare issues? Is there debt to be considered? How are each managing their investments?

If both people own homes, a plan for going forward needs to ask a simple question: where will the couple live? Will one sell their home or turn it into a rental property? If it is sold, will the seller retain all the income, or will they buy into ownership of the joint residence? Emotional attachments to homes can make this a difficult discussion, but it needs to be addressed.

Getting married changes each spouse’s legal status, meaning estate plans must be updated. If both have an existing estate plan, it needs to be reviewed. Powers of Attorney, Healthcare Proxy, and other estate planning documents must also be updated.

While reviewing and revising estate plans, don’t neglect to check on any accounts with named beneficiaries. More than a few ex-spouses have received insurance proceeds or accounts because someone neglected to update these accounts. The named beneficiary overrides anything in your will, which is critical to updating the estate plan.

If you both have children from prior marriages, meeting with an estate planning attorney to determine how to manage property distribution is another critical step before getting married. You may wish to create and fund trusts before marriage, so assets remain separate property. There are as many different types of trusts as there are family situations, from keeping assets separate to providing for a surviving spouse while ensuring biological children receive their inheritance (SLAT), or family trusts where assets are moved into the trust for the surviving spouse to allocate assets to heirs based on their needs.

Social Security planning should also be part of the discussion. If one spouse is a widow who was receiving survivor benefits, they could lose those benefits when they get married.

Talk with an estate planning attorney to address these topics before a mid-life marriage. That way you fully understand your situation and ensure you and your spouse are ready for the changes and challenges of your senior years together. If you would like to learn more about mid-life or second marriages and estate planning, please visit our previous posts.

Reference: Next Avenue (March 14, 2024) “The Talk Over-50s Should Have Before Tying the Knot”

Photo by Alex Green

Estate Planning for Veterans and Active Military Is Important

May 7, 2024

Your dedication to your country is unwavering as a veteran or active military service member. While you’re committed to your duty, you must protect yourself and your loved ones and preserve your legacy. Veterans and active military personnel can and should create an estate plan to match their unique needs. Based on Trust & Will’s article, “Estate Planning for Veterans & Active Military,” we look at why estate planning for veterans and active military personnel is so important.

Military life is marked by unpredictability and uncertainty for you and your family, making estate planning a vital aspect of preparing for the future. Many individuals have plans to distribute funds and appoint trusted loved ones to handle medical and financial matters if the unthinkable happens. Estate planning is essential to help provide for your loved ones if you pass away or are incapacitated. Knowing that your family will be cared for can give you peace of mind.

A will serves as a cornerstone of your estate plan, allowing you to:

Protect Your Family: Specify guardianship for minor children, ensuring they’re cared for by trusted individuals in your absence.
Distribute Assets Seamlessly: Designate beneficiaries and outline asset distribution instructions, including real estate, retirement and financial accounts, sentimental items, and other property.
Plan for the Unexpected: Outline your preferences for medical care and end-of-life decisions to prepare for unforeseen circumstances.

In the military, adaptability is critical, but so is ensuring your affairs are managed in your absence. Powers of Attorney enable you to:

Delegate Your Decisions: If you are incapacitated, designate trusted individuals to handle your legal, financial, and medical decisions.
Manage Your Affairs: Maintain continuity in managing assets, paying bills, and making critical decisions, even during deployments or periods of incapacity.
Mitigate Financial Risk: Protect against financial exploitation and past-due bills by appointing reliable agents to act in your best interests.

For military families, asset protection and efficient wealth transfer are paramount. Trusts offer a range of benefits, including:

Asset Preservation: Safeguard assets during incapacity or deployment, ensuring financial stability for your family.
Probate Avoidance: Streamline the distribution of assets to beneficiaries, bypassing the lengthy and costly probate process.
Tax Efficiency: Minimize estate taxes and maximize tax savings, preserving more of your hard-earned assets for future generations.

Your dedication and sacrifice are unmatched as a veteran or active military service member. That is why estate planning is so important for veterans and active military personnel. By prioritizing estate planning and including will, trust, and power of attorney strategies, you can protect your loved ones and preserve your legacy for generations. Consult with an experienced estate planning attorney for peace of mind. If you would like to learn more about planning for veterans, please visit our previous posts.

Reference: Trust & Will “Estate Planning for Veterans & Active Military,”

Photo by Matthew Hintz

Senior Property Tax Exemption can provide Relief

May 2, 2024

Estate planning and elder law attorneys often help retirees face unique challenges, such as how to afford their property’s rising values and real estate taxes on a fixed income. However, there’s good news: several states offer a senior property tax exemption, which can provide much-needed relief. Based on The Mortgage Reports’ article, “Property Tax Exemption for Seniors: What Is It and How to Claim It,” we look closely at the exemption and if it might work for you.

Only proactive seniors who ask their state, county, or city agency about tax breaks know if their state has a property tax exemption and if they qualify. The states with tax exemptions for homeowners ages 65 and older, like New York or Washington, likely won’t tell you if you qualify. If your state offers this tax break, claiming it is simpler than you might think.

What exactly are senior property tax exemptions? These exemptions are a lifeline for individuals aged 65 or older, reducing the burden of property taxes on their wallets. While property taxes are notoriously unpopular, especially among retirees on fixed incomes, these exemptions offer hope. The exemption helps seniors on fixed incomes by reducing the property value on which homeowners at least 65 years of age pay taxes. The tax rate remains the same for everyone: the reduced taxable value of property or properties. In some states, your tax exemption increases as you age.

States that offer a property exemption can reduce taxes based on a percentage or dollar amount. The amount seniors save varies by location, what they qualify for and their property value.

Senior property tax exemptions vary by state. In most states, you must meet minimum age requirements and prove that you occupy the home as your primary residence. The minimum age threshold varies from state to state, ranging from 61 to 65. Income limit requirements also often exist. A higher income might disqualify you or reduce your exemption.

To claim your exemption, you must apply with your local tax office. Deadlines vary, so make sure to check your state’s requirements. Most states have websites where you can find the necessary forms and instructions.

Each state has its own set of rules and benefits regarding senior property tax exemptions. Some counties offer additional tax savings. By working with a local estate planning or elder law attorney, you can incorporate additional tax-saving strategies into your estate plan. Understanding your local rules and taking advantage of any available exemptions is essential.

The senior property tax exemption can provide much-needed tax relief for fixed-income budgets. By understanding the eligibility criteria, filing on time, and exploring state-specific benefits, you can lighten the burden of property taxes and enjoy a more financially secure retirement. If you would like to learn more about property taxes and estate planning, please visit our previous posts.

Reference: The Mortgage Reports (Jan 29, 2024) “Property Tax Exemption for Seniors: What It Is and How to Claim It.”

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The Estate of The Union Season 3|Episode 4 is out now!

April 30, 2024

The Estate of The Union Season 3|Episode 4 is out now! It surprises some people to discover that the mortality rate in Texas and the USA and the world for that matter is 100%! None of us are getting out of here alive. How we leave this planet can sometimes be determined by how we want to.

While many people die suddenly, many others linger. And the prolonged dying process is where Hospice Austin come into play. We are privileged to have Keisha Jones, the Director of In-Patient Services at Hospice Austin share with us a “better way to die.”

While there are many for profit hospices, and an article in a recent edition of Scientific American highlighted that Hedge Funds are buying up hospices nationwide, Hospice Austin is the only non-profit one in this area. Keisha shares her unique insights into the dying process and gives hope, and we are very thankful for her allowing us to interview her.

To learn more about the incredibly valuable work that Hospice Austin does for the community, please visit their website: www.hospiceaustin.org

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 3|Episode 4 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Avoiding Trouble with Your Trustee

April 25, 2024

Estate planning and elder law considerations linger in the background of our senior years. We plan for senior living, incapacity, and Medicaid. We create an estate plan to protect and preserve your wealth and provide for heirs after you are gone. Trusts are a smart and well-known estate planning tool that names or appoints a trustee to administer and distribute the assets according to the terms. However, how often do estate owners ask, “What if something goes wrong and the trustee breaches their duties?” This blog offers tips on avoiding trouble with your trustee.

The case discussed in WealthCounsel’s article, “Trustee of Living Trust Who Was Beneficiary of Decedent’s Residuary Estate Had Duty to Collect and Protect Assets Not Yet Transferred to Trust,” reminds us to take steps in appointing the right trustee and to draft the trust’s terms carefully.

The case discussed in WealthCounsel’s article involved three beneficiaries, three co-trustees and assets meant for a restated revocable trust. One of the trustees did not collect and protect untransferred trust assets. The deceased’s three children and their mother sued that trustee for breaching fiduciary duty.

The Barash v. Lembo case underscores a critical aspect of trusteeship: the duty to protect and collect assets awaiting transfer into the trust designated for distribution from the trust. Despite the probate process, trustees must proactively preserve trust assets, even before their transfer.

In this case, the Connecticut Supreme Court emphasized that trustees are entrusted with a fiduciary duty from the moment of acceptance. This duty extends to diligently administering the trust in the beneficiaries’ best interests, including the prudent collection and protection of assets.

Central to the trustee’s role is the obligation to uncover and address breaches of fiduciary duty by prior fiduciaries. Whether it’s compelling the transfer of assets or rectifying breaches, trustees must act in the trust’s best interests.

When a testamentary trust emerges as a will beneficiary, trustees are tasked with pursuing reasonable claims against the estate executor. This duty demands due diligence in securing all trust assets and ensuring comprehensive asset management.

While a duty of due diligence binds trustees, evaluating their performance hinges on contextual considerations. All trustee’s actions are scrutinized within the framework of trust administration dynamics, emphasizing the need for meticulous asset management.

In Barash v. Lembo, the court’s ruling underscores the significance of trustees’ proactive engagement in protecting and collecting trust assets. Trustees must exercise diligence and vigilance, leveraging legal avenues to preserve beneficiaries’ interests.

In your pursuit of avoiding trouble with your trustee, partner with a seasoned estate planning attorney who understands the intricacies of trust administration. If you would like to learn more about trustees and trust administration, please visit our previous posts.

Reference: WealthCounsel (Jan 19, 2024) “Trustee of Living Trust Who Was Beneficiary of Decedent’s Residuary Estate Had Duty to Collect and Protect Assets Not Yet Transferred to Trust.”

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Category: Estate Planning

Key Estate Planning Strategies for Executives

Maximizing Tax-Free Giving to Children

A Psychiatric Advance Directive is an Additional tool to Consider

Alternatives to Avoid Guardianship as You Age

The Estate of The Union Season 3|Episode 5 is out now!

Topics You need to Address before a Mid-Life Marriage

Estate Planning for Veterans and Active Military Is Important

Senior Property Tax Exemption can provide Relief

The Estate of The Union Season 3|Episode 4 is out now!

Avoiding Trouble with Your Trustee

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