While direct giving has an immediate impact, some individuals may be considering charitable planning strategies that will have a larger and longer-lasting impact not only on charities, but on their own lives or that of their families.
Everything each spouse earns during their marriage is community property. Fortunately, a gift or inheritance is separate property. However, that’s only half the battle.
Like a lot of estate planning vehicles, irrevocable trusts work very well for some purposes—particularly for tax avoidance and asset protection—and not so well for other purposes.
Every family has one–or maybe more–black sheep. They’re people who march to their own drum and handing them an inheritance could be problematic.
Done right by a lawyer, your heirs can avoid the expense and time of probating your will and may save on estate taxes, while easing the administration of your affairs while alive and after you have gone.
You must now make sure that your loved ones have access to your digital assets should you die.
Low interest rates and looming potential tax changes make this a good time for high-net-worth clients to use a special tool to transfer wealth: the grantor-retained annuity trust (GRAT), a strategy to reduce future estate taxes, by transferring assets to beneficiaries without using the lifetime gift tax exclusion.
In situations where both spouses want the surviving spouse to inherit all the assets, which is often the case, a joint trust can be far less complicated to set up and maintain than separate trusts, with less headaches for the surviving spouse.
Let’s start with the numbers: 10 and 1,000,000,000,000. Over this decade, $1 trillion is expected to change hands through inheritance. The majority of that will end up in the hands of baby boomers. While one study found that the average inheritance was only $50,000, there will be a lot of inheritances in the $1 million-plus range.
After a loved one passes, one of the biggest hurdles families face is passing wealth onto the next generation. Unfortunately, family dynamics can spur conflict and infighting among descendants.
