What is Legacy Wealth Planning?
Legacy Wealth Planning is the creation of a definitive plan for managing your total wealth while you’re alive, distributing your estate how you choose after your death, and a clear plan to pass on your legacy. Your estate includes all assets of any value that you own. This includes non-financial assets as well as financial assets, including real property, business interests, investments, insurance proceeds, retirement accounts and personal property. Your legacy incorporates important decisions ensuring your family core values, responsible behaviors and community involvement are passed on to future generations. Keep in mind, your legacy also includes personal effects, such as family heirlooms, stories, and accumulated wisdom and life lessons of your family.
What is “traditional” estate planning?
Traditional estate planning (Wills and Trusts) focuses on the accumulation, the preservation, and the distribution of only your financial assets and worldly possessions. It protects material wealth from probate and minimizes taxes.
Why do I need an estate plan?
• Married couples: Federal rules let you transfer unlimited assets to a legal spouse—no gift tax now and no estate tax later.
• Unmarried partners: The unlimited spousal break doesn’t apply. Instead, any gift you make taps into your lifetime gift‑and‑estate tax exemption (currently $13.61 million). Whatever you use while alive reduces what’s left to shelter transfers at death.
• Annual exclusion: Regardless of marital status, you can give up to $18,000 per person each year without gift tax and without touching your lifetime exemption.
What is the difference between “traditional” estate planning and Legacy Wealth Planning?
Traditional estate planning is focused on financial assets and is concerned with avoiding probate and estate taxes. On the other hand, Legacy Wealth Planning is concerned with financial and non-financial assets of a family and creating a family’s personal legacy plan. Legacy Wealth Planning addresses how to capture and transfer family traditions and values, as well as protecting financial wealth for current and future generations.
What happens if I die without an estate plan?
If you don’t create an estate plan, the state will step in with one of its own—through a process called intestate probate. But that plan is driven by default laws, not your personal wishes. The court will control how your assets are distributed, who manages your affairs, and how your loved ones are supported—all in a public process that can be time-consuming and expensive.
Without an estate plan, your spouse may need court approval just to access household funds, and your children could receive assets in ways that don’t align with your values or long-term goals. There’s also no built-in strategy to minimize estate taxes—something a customized plan can address.
Working with an estate planning attorney gives you the opportunity to stay in control, protect your family, and ensure your legacy is handled the way you intend.
What is a Family Wealth Trust?
A Family Wealth Trust is the main component of a Legacy Wealth Plan and covers important issues other than avoiding probate.
What’s the real benefit of choosing a Living Trust over a Will?
A Will is a legal document that describes how your assets should be distributed in the event of death. The actual distribution, however, is controlled by a legal process called probate, which is Latin for “prove the Will.” Upon your death, the Will becomes a public document available for inspection by all comers. And, once your Will enters the probate process, it’s no longer controlled by your family, but by the court and probate attorneys. Probate can be cumbersome, time-consuming, expensive, and emotionally traumatic during a family’s time of grief and vulnerability. Con artists and others with less-than-pure financial motives have been known to use their knowledge about the contents of a will to prey on survivors. A Living Trust avoids probate because your property is owned by the trust, so technically there’s nothing for the probate courts to administer. Whomever you name as your “successor trustee” gains control of your assets and distributes them exactly according to your instructions. There is one other crucial difference: A Will doesn’t take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. A Family Wealth Trust can help you preserve and increase your estate while you’re alive, and offers protection should you become mentally disabled.
How does a Family Wealth Trust differ from a Revocable Living Trust?
Most Revocable Living Trusts are primarily concerned with avoiding probate and estate taxes. A Family Wealth Trust offers lifetime benefits, and protects wealth for current and future generations.
What happens if I’m incapacitated and have only a Will—or no plan at all?
Without advance planning, the court steps in through a conservatorship (sometimes called “living probate”). A judge appoints someone to manage your money and personal decisions, demands detailed accountings, and keeps everything on the public record. The process is slow, costly, and can feel intrusive for both you and your loved ones.
Why should I have a Family Wealth Trust?
Not only does a Family Wealth Trust provide for the disposition of your property (like a Will), but it also offers the following benefits:
- Provides for the immediate transfer or trust management and distribution in the future of assets after death;
- Allows for a smooth transition of management upon incapacity or death;
- Avoids the expense and hassle of probate proceedings;
- Minimizes estate taxes and defers payment of estate taxes for married couples;
- Allows for continued control over assets after death or incapacity;
- Provides security to you and your loved ones;
- Protects your children’s inheritance from their own potential divorce;
- Safeguards your estate for your kids if your surviving spouse remarries;
- Offers flexibility.
If I set up a Family Wealth Trust, can I be my own trustee?
YES. In fact, most people who create a Family Wealth Trust act as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your trust. In the event of a mentally disabling condition, your hand-picked successor trustee assumes control over your affairs, not the court’s appointee.
Can I transfer real estate into a Family Wealth Trust?
YES. In fact, all real estate should be transferred into your Family Wealth Trust. Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Family Wealth Trust, there is no probate anywhere.
Is the Family Wealth Trust some kind of loophole the government will eventually close down?
NO. The Family Wealth Trust has been authorized by the law for centuries. The government really has no interest in making you or your family suffer a probate that will only further clog up the legal system. A Family Wealth Trust avoids probate so that your estate is settled exactly according to your wishes.
How do I know if I have a “bare bones” living trust?
Very few estate planning attorneys offer Legacy Wealth Planning. A “bare bones” living trust covers probate avoidance and usually ignores important issues to protect you, your spouse (if married) and your children. Bring your existing trust to your one-hour consultation and we can review it for you.
If I have a “bare bones” living trust should I go back to the attorney who drafted the trust?
You can certainly go back to the attorney you worked with before, however, few attorneys offer Legacy Wealth Planning. If you want Legacy Wealth Planning, contact a member of the American Academy of Estate Planning Attorneys.
Is a Family Wealth Trust only for the rich?
No. A Family Wealth Trust can help anyone who wants to protect his or her family from unnecessary probate fees, attorney’s fees, court costs and federal estate taxes. In fact, the Family Wealth Trust offers substantial protection for your family, regardless of your total estate. In addition to savings at death, especially if your estate is over $100,000, the Family Wealth Trust also provides savings and peace of mind during life, because it avoids the expense and emotional nightmare of an incapacity or “living probate” proceeding. Also, a Family Wealth Trust protects spouses in the event of remarriage after one spouse dies and affords greater protection for children.
Can any attorney create a Family Wealth Trust?
YES, but you would be better off choosing an attorney whose practice is focused on estate planning. Members of the American Academy of Estate Planning Attorneys receive continuing legal education on the latest changes in any law affecting estate planning, allowing them to provide you with the highest quality estate planning service anywhere.
What steps can I take to preserve my legacy?
The best approach is to meet with an attorney who understands the Legacy Wealth Planning process. This will ensure you address the financial and non-financial assets of your family. The right attorney will help you, first, set up a Family Wealth Trust to preserve your financial legacy. Then, you will be educated about completing the My Legacy workbook, to share in your own words about your life story, family history, memories, and life lessons. And finally, writing a Legacy Planning Letter to distribute your cherished possessions with sentimental value.