Fee Schedule

Our clients tend to come in two main varieties: 1) “I’ll be dead and gone. Once they get it, the rest is their problem,” and 2) “Do you know how hard I have worked for this? I want to give them every advantage, protection, and tax savings I can.” If you’re in the second group, the features below are for you.

One of the most overlooked holes in otherwise solid estate plans is the designation of minor children as beneficiaries on retirement accounts. These accounts, which are subject to complex distribution and tax rules, come under the beneficiary’s control at age 18. This has two serious drawbacks. First, they can take whatever they want from the account and spend it at any time. Second, they lack the knowledge and experience to understand the tax-deferral value of following a more structured distribution plan over a longer period of time. Naming a typical trust as beneficiary to avoid these problems causes the distributions to be taxed at 37%. Our advanced trust solves all of these problems.

The most common disinheritance scenario we see is what we call the “accidental disinheritance.” It works like this:

Harold and Wendy set up a typical estate plan in which the surviving spouse gets everything. The kids share equally after the death of the surviving spouse. Wendy passes first. After a few years, Harold marries Susan. Harold and Susan, set up another typical estate plan in which the surviving spouse gets everything. Harold’s and Susan’s kids will split everything equally after the death of the surviving spouse. Harold dies before Susan. Susan updates her will or trust to leave everything to her own kids. Harold and Wendy’s kids inherit nothing, despite the fact that neither Harold nor Wendy ever did anything with the intention of disinheriting them. The same result occurs if Harold loses assets to lawsuits or bankruptcy. Our advanced trust protects Harold and Wendy’s kids against this outcome.

A typical will or trust-based estate plan does not provide any protection against the legal claims, creditors, divorce, or bankruptcy of the surviving spouse after the death of the first spouse. Our advanced trust protects the first deceased spouse’s portion of the estate from these threats while allowing the surviving spouse to maintain full control of the assets.

The tax basis (i.e. the amount subtracted from the sale price of an asset when calculating capital gains) of inherited property is “stepped up” to the fair market value on the date of death. In community property states like California, all of the marital assets receive this “step-up” when the first spouse passes. However, in common law states like NC and SC, only the property attributable to the deceased spouse (typically ½ of the marital estate) gets the step-up. Our advanced trust achieves a full step-up on 100% of the marital estate at the first death. At a 20% capital gains tax rate, this can save the surviving spouse hundreds of thousands of dollars in extra capital gains taxes on the sale of appreciated assets.

Beginning in 2026, each spouse can pass up to $15m of assets before the 40% estate tax kicks in. Because there is an unlimited estate tax deduction for amounts passing to a surviving spouse, typical will and trust planning does not use any of the deceased spouse’s exemption. While the unused exemption can be “ported” to the surviving spouse, most estates fail to follow the technical steps required, and the unused exemption is lost forever. The surviving spouse ends up with all of the assets passing through his or her estate with only $15m of exemption instead of $30m.

Our advanced trust planning does not rely on “portability” of the unused exemption and ensures that the full, combined exemption of both spouses will be available.

Before you conclude that your estate is too small to worry about this problem, consider two facts: 1) the estate tax exemption amount can be lowered in the future (and was 1 Senate vote away from being lowed to $5m in 2021); and 2) estate values tend to double every 7 to 14 years.

Typical will and trust planning gives the inheritance to the beneficiaries outright. The beneficiaries own the inheritance personally, in their own names. This is a litigious society, and there is no cap on damages in tort lawsuits. Divorce rates continue to range from 40% (first marriages) to 70% (third marriages). A single inattentive moment at the wheel or professional malpractice claim can be enough to wipe out an inheritance. A beneficiary’s divorcing spouse can take half or more with them as they walk out the door. And, in the worst case, a federal bankruptcy trustee can get at just about any asset and seize it to pay creditors.

Our perpetual asset protection trust prevents all of these outcomes while leaving beneficiaries in control of the inherited assets (where appropriate and subject to age restrictions).

Our advanced trust is typically designed as a beneficiary-controlled trust. Beneficiaries serve (subject to any age restrictions you may choose to impose) as the trustees of their own individual trusts, and each is able to control how their own share of inheritance is invested and spent. In appropriate cases, another person or a professional or corporate trustee can be named instead of (or along with) the beneficiary.

Consider a common outcome of typical will and trust planning:

Harold and Wendy have a son, Scott, and three grandchildren, Greg, George, and Ginny. Scott is married to Sarah. Harold and Wendy leave everything to each other and then to Scott, if Scott does not survive them, to their grandchildren (not to Scott’s wife Sarah). Harold and Wendy pass, leaving a $3m inheritance to Scott. Scott and his wife, Sarah, have a trust that leaves everything to the surviving spouse, then to their kids. Scott dies first, leaving everything to Sarah, who promptly remarries to Peter, who has four children of his own. Harold and Wendy’s $3m goes to Sarah instead of to Greg, George, and Ginny. Substantial amounts end up in the hands of Peter and his kids.

Our advanced trust guarantees that Greg, George, and Ginny are in line after Scott, regardless of whether Scott passes before or after Harold and Wendy.

For most trusts, income generated during the tax year is taxed to the beneficiaries if the income is distributed and is taxed to the trust if it is accumulated inside the trust. The top tax rate for trusts (37%) starts at just over $15k of taxable income. Ouch.

Most trusts invest mostly in assets that produce capital gains, which are taxed at 20%. They don’t tend to produce or accumulate much ordinary income, so this structure usually isn’t a problem. The problem lies in estates that will have substantial ordinary income, which usually comes from large retirement accounts (IRAs, 401ks, etc.), rental property portfolios, or family businesses that the trust continues to own and operate. A typical trust forces a client to choose between all of the benefits of trust ownership (age restrictions, asset protection, divorce protection, estate tax avoidance, control structures, etc.) on the one hand and income tax efficiency on the other.

Our advanced trust causes the IRS to treat the trust beneficiaries as the owners of all ordinary income sources for tax purposes, resulting in the individual income tax rates applying instead of trust tax rates, even on accumulated income amounts. This provides all of the benefits of trust ownership without any additional tax cost.

If a special needs beneficiary receives or may become eligible for any means-tested government benefits (SSI, Medicaid, Section 8 Housing) on account of their disability, receiving an inheritance will instantly disqualify them from these programs until the money is spent. Unfortunately, “conventional wisdom” that recommends disinheriting the special needs person to preserve their benefits continues to persist in some special needs communities.

Our advanced trust ensures that any special needs beneficiary (whether they have special needs now or develop them unexpectedly in the future) will be able to receive and benefit from an inheritance without losing access to critical benefit programs.

The tax basis (i.e. the amount subtracted from the sale price of an asset when calculating capital gains) of inherited property is “stepped up” to the fair market value on the date of death. However, typical multi-generational trusts (often called “dynasty” trusts or “perpetual asset protection trusts”), even high-quality, sophisticated ones, rob the beneficiaries of the opportunity to take advantage of this massively valuable step-up as assets pass from generation to generation. This can cause the trust and its beneficiaries to incur millions of dollars in extra capital gains taxes over the course of multiple generations.

Our advanced trust allows trust assets to receive a step-up in basis at each successive generation.

The estate tax system is designed to tax the transfer of wealth at each generation. Alvin’s estate is taxed at 40% when it passes to his son Simon. Simon’s estate is taxed again at 40% when it passes to his son Theodore. For larger estates that will be taxable or have the potential to become taxable assuming the estate doubles every 7 to 14 years (or if exemption amounts are drastically reduced as the national debt continues to balloon), this can potentially lead to millions of dollars of additional tax liability.

Our advanced trust avoids estate taxation at each subsequent generation. There is no time limit on how many generations can benefit from the trust without ever paying estate taxes again. North Carolina trusts can run perpetually, and South Carolina trusts can run for up to 360 years.