Estate Planning & Wealth Preservation
Califf & Harper, P.C. attorneys help individuals, including business owners, executives, and highly compensated individuals preserve and protect their assets, provide for the continued well-being of their families, and create a legacy of charitable activities. At the same time we focus on ways to minimize federal and state taxes. We routinely counsel clients as to traditional wills and trust matters and planning to assure an orderly transfer of family held businesses. Our work in this area includes corporate reorganizations, counseling as to life insurance matters and private foundations and other charitable entities.
Our goal is to work hand in hand with our clients to understand the clients' objectives and to develop a plan to accomplish each objective. Although we focus on ways to minimize federal estate taxes, we coordinate estate tax savings with our clients' objectives to develop the best overall plan.
Basic Estate Planning
Our basic estate planning services include preparing appropriate documentation and titling so as to optimize use of both spouses' federal estate tax exemptions, structuring trusts for children and grandchildren, advising Executors, Trustees and Guardians, preparing appropriate beneficiary designations, working with retirement plans and preparing Wills and Powers of Attorney for Property and for Health Care.
Estate Tax Reduction Techniques
Federal estate taxes may include tax rates that escalate rapidly to a 50% rate. We specialize in various techniques that are available to reduce estate taxes. We explain these techniques to our clients in an understandable manner and we involve our clients as active participants in the development of tax reduction techniques.
We regularly implement the following estate tax reduction techniques for our clients:
- Irrevocable Insurance Trusts. This is a vehicle whereby insurance is removed from a client's estate for federal estate tax purposes by transferring existing insurance to an Irrevocable Insurance Trust or having new insurance owned from its inception by an Irrevocable Insurance Trust.
- Qualified Personal Residence Trusts. A Qualified Personal Residence Trust is a vehicle by which a substantial portion of the value of an individual's primary or vacation residence can escape federal estate taxes while the client and the client's spouse continues to live in the residence.
- Family Limited Partnership. This is a vehicle whereby an individual can make gifts to children or grandchildren or trusts for their benefit of limited partnership interests in a partnership he or she creates while taking a substantial discount in the value of such limited partnership interest for federal gift tax purposes. The client may maintain control of the partnership as the general partner or through ownership of a corporate general partner.
- Charitable Trusts and Private Foundations. Private Foundations and certain charitable trusts provide many income and estate tax benefits. A common technique is known as a charitable remainder trust. Appreciated assets can be contributed to a Charitable Remainder Trust and sold by the Trust without the Trust recognizing gain, as a Charitable Remainder Trust is exempt from federal income tax. The creator of the Trust can retain the right to receive a percentage of the value of the Trust for his or her lifetime and the lifetime of his or her spouse. The creator of the Trust also receives a current income tax deduction.
- Grantor Retained Annuity Trust ("GRAT"). A GRAT is a vehicle whereby a Grantor transfers income producing assets to a trust and retains an interest in the trust for a term of years. If the Grantor survives the term, the assets will not be included in the Grantor's estate for estate tax purposes.
- There are a number of other estate tax reduction techniques that we often use in the appropriate situation.
Family-Owned and Closely Held Business Planning
Family-owned and other closely held businesses must cope with significant changes in the law that affect thriving enterprises. Business owners must give careful attention to strategic planning, management and ownership, while at the same time ensuring protection for the next generation's active participation in business. We have a depth of experience in helping family-owned businesses to deal with these issues in practical ways. Our attorneys have acted as business advisors to our clients for a number of years.
Preserving wealth from generation to generation is a primary estate planning objective. Increased litigation, divorce, environmental issues and other potential creditors may damage a client's net worth substantially. We therefore consider asset protection planning to be an important element of estate planning.