Estate planning can help preserve for our clients the greatest possible measure of control over decision making during their lifetime, their independence, and the process of administration after death.
Estate planning objectives include, among other things, minimizing taxes, avoiding lengthy probate proceedings, and providing for a distribution that accurately reflects the client’s intentions. These intentions will cover financial assets and may also encompass family goals and intangible considerations, which are often the client’s way of projecting his or her planning vision into the future.
All estate plans will include a will, a durable power of attorney, and a health and/or mental health care power of attorney. A revocable living trust has multiple uses and will commonly be part of all but the simplest estate plans. The principal use of the irrevocable trust in an estate plan is to remove assets from the client’s estate. For example, if a client, wishing to lower the value of the gross estate, transfers property to an irrevocable trust for the sole benefit of a grown child and retains no authority over the property, the transfer to the trust is a gift for gift tax purposes; the property is owned by the trust and, therefore, is no longer part of the client’s estate. Lifetime gifts are often useful to remove assets from the client’s estate so that they are not a part of the “gross estate” subject to U.S. and Michigan estate tax at the client’s death.