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Complex Trusts and Estates
Estate planning professionals continue to devise new and creative ways to solve tax and estate planning issues. Some of today’s more sophisticated techniques are being developed in response to client’s demands to reduce estate taxes without losing control of their assets. Many of these strategies work best when utilizing real estate or other illiquid assets, and involve creative ways to structure the form of ownership of the asset.
Examples of some of these strategies include:
• Family limited partnerships
• Limited liability companies
• Grantor-retained annuity or unitrusts
• Qualified personal residence trusts
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Irrevocable life insurance trusts
• Charitable remainder trusts and charitable lead trusts
• Private foundations and Endowments
Invariably, these techniques result in ownership structures that save on taxes but create complex bookkeeping and administrative requirements for the trustee. Additionally, they are usually “irrevocable” in nature, meaning once implemented they cannot be unwound without significant legal and tax consequences.
Individuals and families who are utilizing these types of strategies should give serious consideration to the selection of
the trustee. While these strategies are highly effective in reducing taxes, they can also create huge legal complications and tax liabilities if not administered properly. The quality and effectiveness of a complex estate plan is only as good as the trustee who is responsible for carrying it out.
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Montecito Bank & Trust Solution
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