The Manhattan region is the financial capital of America–if not the entire world. Many who live and work here have accrued considerable wealth, which they want to preserve and protect.
Estate planning empowers all New Yorkers to manage their property in a way that imposes the fewest financial hardships and risks. With this goal in mind, and the goal of preserving wealth for future generations, here are two trusts the wealthy should consider.
Also known as a dynasty trust, this estate planning tool allows you to pass over a generation (your adult kids) and leave property directly to your grandchildren. The main benefit of a dynasty trust is the avoidance of estate taxes that your adult children would have paid had they received the trust assets instead. You must be at least 37 ½ years older than the beneficiaries in a generation-skipping trust.
Irrevocable life insurance trust
The steps to creating an irrevocable life insurance trust (ILIT) are relatively simple. First, you create a trust and then you make that trust the beneficiary of a life insurance policy. An ILIT keeps the insurance payout from being counted as part of your gross estate. It will also shield the insurance payout meant for your heirs from creditors. Historically, an ILIT is an efficient means of sheltering the insurance money your heirs will receive from gift and estate taxes.
Charitable lead and charitable remainder trusts offer substantial tax benefits for the wealthy. As an extra reward, your charitable gifts can improve life for many of your fellow New Yorkers.
These are just two examples of how mindful estate planning protects your heirs, preserves your assets and gives you peace of mind. Speak with a local practitioner to learn more.