The Cornerstones of Estate Planning
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TAX PLANNING CONSIDERATIONS
An Advance Care Directive, also known as a Living Will, allows you to express your wishes regarding medical treatment and end-of-life care if you are unable to communicate your decisions. It outlines your preferences for life-sustaining treatments, pain management, and other medical interventions. Having a Living Will ensures that your healthcare providers and loved ones understand your desires and can make medical decisions on your behalf alignment with your values. Advance Care Directive (Living Will) A Healthcare Surrogate Designation, also known as a Healthcare Power of Attorney, allows you to appoint someone you trust as your surrogate or proxy when it comes to medical care. This person will have the legal authority to make medial decisions on your behalf if you are unable to do so yourself. Your healthcare surrogate is able to work with medical professionals to ensure that your medical treatment is carried out according to your wishes. Healthcare Surrogate Designation A HIPAA Authorization is a legal document that allows designated individuals to access your protected health information. Without this authorization, medical professionals are prohibited from sharing your health information with anyone other than you. By having a HIPAA Authorization in place, you ensure that your healthcare surrogate and other trusted individuals can access important medical information when needed. HIPAA Authorization
For high-net-worth clients who may be concerned about federal and estate taxes, an Irrevocable Trust with a Lifetime Protection Subtrust can offer significant tax benefits and asset protection. The benefits of an irrevocable trust can include the following: • Estate tax reduction • Lifetime gifting options • Protection from creditors • Protection from divorce • Control and flexibility By consulting with an estate planning attorney, clients can customize their Irrevocable Trust to align with specific needs and financial objectives, optimizing all available tax benefits. However, due to the long-term implications of such a trust, it’s crucial to seek professional guidance and careful planning to ensure your plan meets overall estate planning goals. Irrevocable Trust With Lifetime Protection Subtrust A/B Planning, also known as Credit Shelter Trust or Bypass Trust planning, is sometimes used in conjunction with a Living Trust for married couples, especially those with a high net worth. It allows each spouse to maximize their individual estate exemption, reducing the tax burden on their combined assets. By creating separate trusts for each spouse, A/B Planning ensures that both spouses can take advantage of their estate tax exemption and pass on more of their wealth to their beneficiaries tax-efficiently. A/B Planning For Living Trust
5 Your Guide to Tax & Estate Strategies
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