Complex planning builds further upon simple planning. After basic estate desires are determined individuals can focus on planning for special assets, specific familial circumstances, and tax issues.
Without proper planning special assets meant to be a gift can be a burden on beneficiaries who receive them. Assets such as closely held business, intellectual property, residential and commercial rental property, corporate and LLC interests, firearms, and fine art all need special attention. Review of existing estate planning and management documents, or lack thereof, including partnership, shareholder, and operating agreements, is necessary to determine restrictions and requirements regarding transfers. Whether it is preparing for future co-management and ownership of property, or distribution of specific assets to specific individuals, attention to the kinds of assets being transferred is necessary and often overlooked. My estate administration and my trust and estate litigation experience has provided me with understanding to help clients plan for complicated assets and the complications that may arise after they pass.
Relationships often become stressed after the death of a loved one. Recurring issues often arise between specific sets of individuals. These include stepparents and stepchildren, in-laws and surviving spouses, aunts/uncles and nieces/nephews, and siblings. Simply hoping that existing relationship issues will subside or that unknown issues will not arise is unwise. I have unfortunately experienced litigation and administration where such issues were not addressed. The stress this places on loved ones is immense. Similarly, dividing assets in a blended family, planning when one spouse has significant separate property, planing after a second marriage, or planning for children with special needs can cause difficulties or conflict.
Fortunately, experience in recognizing recurring family issues combined with available planning techniques can greatly mitigate unnecessary family stress. Making proper decisions regarding who should serve as a trustee or executor, providing for special trustee powers, separating co-ownership of assets, creating proper life estates, and utilizing irrevocable trusts, among other techniques, can help guide an estate plan and protect family members. Most litigation and improper administration that arises after death can often be avoided through simple consideration and planning.
For large estates the need for estate tax planning cannot be understated. Yet, even modest estates need to plan based upon California's real property tax scheme and the fluid nature of the gift and estate tax regulations created by Congress. Like any tax regulation, estate and gift taxes are subject to political pressure and who has power at any given time.
The options available to reduce potential estate taxes are numerous. Planning through lifetime giving and the annual gift exclusion, fractional interest discount planning where property values are lowered through appraisal, charitable giving, and irrevocable trusts, all help reduce the amount of assets that are included in someone's estate at their death. Tax planning also includes minimizing present capital gains taxes by taking advantage of remainder gifts to charities via trusts and taking advantage of exemptions and exclusions for real property tax reassessment in California. Although many estates can avoid planning around estate taxes, every estate holding real property in California, no matter how modest, is subject to California real property taxes. Proper planning reaps benefits every year that property taxes continued to be paid.
Although the above mentioned strategies can be sophisticated I help clients create plans that are simple to administer and simple to understand.