Through hard work and careful investments, Gordon and Pat L. had built a healthy net worth. As they reviewed and updated their estate plans, they discussed how to handle estate planning for the next generation. They wanted to pass their wealth on to their children, grandchildren and beyond, but were not sure how to do it. Their estate planning attorney showed them the way.
Trusts May Help
Every trust has a purpose. Charitable trusts provide a charitable donation and an annuity to the grantor for a set period of time. Special needs trusts provide funds to support someone with special needs. Dynasties are all about families, and so are dynasty trusts.
A dynasty trust may also be known as a generation-skipping trust. The trust is intended to last for generations, passing wealth without incurring the usual taxes. Typically, a dynasty trust is established by parents who make their children the initial beneficiaries. As the children pass away, wealth is then transferred to the next generation – the grandchildren, then the greatgrandchildren and so on.
Asset protection trusts are another way grantors may preserve wealth for their heirs. As the name states, this type of trust protects assets for the grantors. However, it also may be established as a spendthrift or discretionary trust that safeguards the beneficiary’s inheritance from creditors, judgments, and ex-spouses.
Other Estate Planning Tools for the Next Generation
Family limited partnerships are another option for transferring wealth to the next generation. The grantor or grantors usually act as general partners. As such, they control the partnership assets and shoulder the partnership’s liability. Other family members may buy partnership interests, but the general partners also may gift interests to family members as part of a gifting strategy. Limited partners do not manage the partnership, nor do they assume any liabilities. As time goes on, the general partners may gift additional interests to the limited partners. Family limited partnerships may continue after the death of the grantors, with children and grandchildren continuing to reap the benefits for years.
Learn More About Your Estate Planning Options.
At the Lambros Law Office, our attorneys have the skill and experience to develop an estate plan that meets your needs. To schedule an appointment, call 401-383-9899. You may also use our convenient Contact Form to let us you know are ready to get started. We assist clients throughout Rhode Island, including Cranston, Providence, and Warwick.