Los Altos Estate Planning Attorneys — Irrevocable Trusts

The estate planning attorneys at Kramer Radin, LLP assist clients throughout the Peninsula/South Bay Area with advanced estate planning strategies involving the use of irrevocable trusts.

Irrevocable Life Insurance Trusts

Life insurance is an important component of many estate plans. Life insurance can be used to create an estate, such as for a young couple with children who have not accumulated much wealth and are concerned about providing sufficient funds to raise their children. Life insurance also provides liquidity to pay debts and taxes without having to liquidate business interests or investments. It can also be part of a comprehensive estate planning strategy designed to leverage the applicable exclusion for estate and gift taxes, replace wealth being transferred to a charity, or be an important component of a business succession plan. We prepare Irrevocable Life Insurance Trusts (ILITs) to ensure the proceeds from a life insurance policy will be distributed to your beneficiaries free of any transfer taxes.

Education Trusts

We assist parents and grandparents with establishing College Education Trusts for the future college education of their children or grandchildren. College Education Trusts established under Section 2503(c) of the Internal Revenue Code allow a donor to gift assets to a trust for the benefit of a child or grandchild. As long as the amount transferred to the trust is less than the annual gift tax exclusion amount, the gift will not be subject to any federal estate or gift taxes. The income from the funds is either taxed to the trust (if no distributions are made from the trust) or to the child (if distributions are made to the child). Often the income will be taxed at lower tax rates than the rates of the parents, allowing parents to shift income taxes to the trust or child. Unlike custodial account arrangements, College Education Trusts allow the donor to maintain some control over the use of the funds.

Special Needs Trusts

Special Needs Trusts are trusts that are specifically drafted to ensure that a disabled beneficiary will continue to be eligible for government benefits. If an intended beneficiary is the recipient of Medi-Cal, SSI, or certain other governmental assistance programs, an outright gift or gift in trust may disqualify the beneficiary from receiving continued assistance. In a Special Needs Trust, distributions are made only to supplement, not replace, the benefits being received. Distributions made by the trustee are discretionary, not mandatory, and are therefore not considered disqualifying under most programs.

Special Needs Trusts can also be used to receive funds from a personal injury litigation matter on behalf of a disabled person without disqualifying the injured person from Medi-Cal benefits.

Seek Experienced Legal Representation

Irrevocable trusts involve complex tax issues and require experienced legal counsel. We welcome the opportunity to serve your estate planning needs. Contact Kramer Radin, LLP to schedule a consultation with one of our experienced trust and estate attorneys.