Estate & Transition Planning

A trust arises when legal title to property is held by one or more persons while its use, enjoyment and benefit belong to another. A trust may be created by agreement of the parties, by grant in a will, or by a court decree. However created, the relationship is known as a trust. The party creating the trust is the creator or settlor, the party holding the legal title to the property is the trustee, and the person who receives the benefit of the trust is the beneficiary.

Before creation of the Educational Savings Account (ESA) and Qualified Tuition Programs (QTP, also referred to as 529 plans), parents who wished to give money or property to their minor children could do so in four basic ways:

Give it outright.
Give it in a trust.
Give it by means of special guardianship.
Give it using a custodial account.

How can you stipulate who gets what at your death? A will.

What if your wishes change? Create a new will or amend your existing (by “codicil”). A codicil must conform to certain laws as to design and execution, just as the will must. You’ll want your attorney to assist you. Or just put your new wishes down on paper, then sign and date it. Actually, make three originals. Attach one to the copy of your will; give one to the attorney who created your will and one to the executor of your estate (as directed in the will).

“Estate tax” is a tax levied, at the time of your death, on the total value of your possessions. Affectionately referred to as a death tax, the estate tax was enacted as a way to redistribute wealth and avoid the undesirable concentration of excessive wealth within a few families.

If you own a business organized as a C-corporation, you could face a wealth-draining dilemma when you try to sell.