Wealth Transfer

Myth-Busting with Momentum: How to Pursue the Premium

Wealth transfer planning for your family’s future is serious business, and it’s something you will want to get right the first time. 

A key component of wealth transfer planning is the transfer of wealth that occurs at death. Estate planning, including wills, trusts, powers of attorney, and advance health care directives, can help protect your financial assets and provide for your personal wishes.

If you should pass unexpectedly without first setting up a trust or writing a will, then the probate court may distribute your assets for you in accordance with local laws, with no regard for what you might have wanted. This could result in your estate being held up in probate for months or even years, forcing your loved ones to wait to receive their inheritances.

What is a trust and do you need one?

A trust is a legal entity that allows for you to appoint a trustee to manage assets on behalf of a beneficiary or beneficiaries for as long as you direct. This flexibily is especially valuable when you wish to control the timing of the distribution of assets after your passing. The three main reasons for creating a Living Trust are to have more control how the assets are manged and distributed, avoiding probate, and the mitigation of federal estate taxes. The two main types of trusts used for wealth transfer are living trusts and testamentary trusts.


A living trust names a trustee to manage the assets, and name at least one beneficiary. You can serve as the trustee of your living trust. A living trust is revocable prior to your passing unless you expressly declare it an irrevocable at its creation. The trust becomes effective as soon as you sign it, and it will become irrevocable once you pass. Your accounts will be retitled in the name of your trust. Your trust assets do not go through probate, and trustee can continue managing the trust assets as provided for in the trust.


A testamentary trust is a trust that isn’t created until you die. Your last will and testament can include a testamentary trust. The main advantage of a testamentary trust over a simple will is its flexibility. Ordinarily, probate assets must be distributed to estate beneficiaries by the time probate ends. A testamentary trust, which sets out the terms of the trust, can distribute assets to beneficiaries for an indefinite period, just as a living trust can.

Wealth Transfer Beyond the Revocable Trust

If you wish to make a wealth transfer as much and as soon as possible to heirs we can look to Lifetime Giving and Intrafamily Techniques. The most straight forward technique is making gifts within the per-donee gift tax annual exclusion, and unlimited exclusion for direct payments of tuition and medical expenses. These gifts will escape gift taxation and will not be in the donor's gross estate.

In addition to the above mentioned types of gifts you can also gift up to your lifetime gift tax exemption, a limit that is adjusted each year. This is the amount of assets you are permitted to give away over the course of your lifetime without having to pay federal gift tax. There are a number of compelling benefits as well as potential drawbacks to making such large wealth transfers during your lifetime.

There are additionally a number of planning techniques where there are sales for full and adequate consideration between family members or family members and trusts. Numerous types of trust arrangements can also be considered in planning for the needs of the surviving spouse and family. In the case of large taxable estates or when a business interest is involved, liquidity can be an issue that needs to be addressed.

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