Estate Planning & Wealth Transfer
LLF attorneys counsel a variety of individual clients and their families in a broad range of wealth management issues, including estate and business succession planning, trust and estate administration, estate and trust litigation, special needs planning and intergenerational estate and gift tax planning. Given our firm’s general business law competence, we are particularly well-suited to serve the needs of private business owners and their families, as we are able to coordinate with other attorneys in our firm in designing an estate plan that accounts for the succession of the business, valuation, buy-sell and other business issues.
Every estate plan begins with one or more meetings to gain a thorough understanding of a client’s personal, financial, and business goals, as well as their current finances and family situation. As our client’s personal business advisor, we often coordinate with his or her accountant, financial advisor, life and personal insurance brokers and other professionals to create a seamless estate and business succession plan.
With this information, we can then review and answer the client’s questions regarding the estate planning process, inform the client of any relevant estate and tax planning techniques to reduce or eliminate estate and gift taxes, including lifetime gifting opportunities, and address non-tax issues such as creditor protection, protection from divorce, special needs planning, planning for second or third marriages, and other legal and non-legal matters. By doing so, we can plan in the event of disability and ensure a smooth transition of wealth to a surviving spouse or children upon death.
Our estate planning services include the preparation of traditional estate planning documents, such as:
- Revocable Living Trusts
- Powers of Attorney for Health Care and Property
- Irrevocable Insurance Trusts (“ILITs”)
- Pet Trusts
- Qualified Personal Residence Trusts (“QPRTs”)
In addition, we can implement sophisticated legal and tax strategies such as:
- Special Needs Trusts
- Generation Skipping and Dynasty Trusts
- Grantor Retained Annuity Trusts (“GRATs”)
- Intentionally Defective Grantor Trusts (“IDGTs”)
- Charitable Trusts and Private Foundations
- Gift Trusts
Business Succession Planning
A client’s business can be one of his or her most valuable assets. Establishing a succession plan to ensure the continuity of the business while maximizing a financial return for the owner and his or her family can be a challenge, especially if not put into place well in advance of a triggering event such as the incapacity or death of the owner.
LLF attorneys advise owners of closely-held businesses of all sizes to create exit strategies to ensure a smooth transition between current and future owners. It is not unusual for successful business owners to work with us to create a five or ten year exit strategy to minimize the risks associated with ownership and control disputes, intra-family squabbles, loss of key employees and significant reduction in value.
Working in conjunction with our corporate, labor and employment, and real estate practices, we implement business succession plans that include:
- Advising clients on entity formation, including corporations, limited liability companies, and partnerships, to hold, manage and ultimately transfer the business
- Preparation of operating, shareholder and partnership agreements to outline the responsibilities of the owners, manager and officers and to control the transfer of ownership to select family members, other individuals or entities
- Preparing employment contracts, phantom stock plans, deferred compensation and golden parachute plans for employee loyalty and retention
- Preparing employee handbooks and designing employment policies to ensure compliance with the law, minimize liability and promote the owner’s business objectives
- Drafting buy-sell agreements to determine the value of the business and to structure a proper buy-out of a client’s ownership interest with or without the use of life insurance
- Minimizing taxes in the transfer of business ownership by implementing certain estate, gift and income tax techniques
- Planning to equalize inheritance among children who are and who are not involved in the business by creating sufficient liquidity to avoid the forced sale or unreasonable encumbrance of the business
Estate and Trust Administration
Upon the death of a family member, a surviving spouse, child or other individual is left with the sometime overwhelming obligation to administer the decedent’s estate or trust. We assist and instruct beneficiaries, executors, administrators, trustees and guardians of the person and estate in all aspects of the administration process, including:
- Initiating and administration of a probate proceeding, including the preparation of court documents
- General trust and estate administration, including gathering and securing assets, notifying heirs and beneficiaries, valuing property, paying of all valid debts and expenses, negotiating with creditors, making funeral arrangements, preparing an inventory and accounting of assets, and distributing assets to named beneficiaries
- Advising executors and trustees of their obligations and duties under a will or trust
- Preparation of small estate affidavits
- Preparation of federal and state estate tax returns
- Implementing post-mortem estate planning techniques to further reduce tax, including use of disclaimers
- Advising beneficiaries of their rights and obligations
Estate and Trust Litigation
The administration of estates can involve very complex financial, tax and personal issues. Often circumstances change, unforeseen events occur or the relationships between family members or other individuals break down for a variety of financial and personal reasons. This can lead to highly emotional disputes, especially after the death of a loved one. Even the most carefully constructed estate plans can be challenged. Our attorneys are sensitive to the issues involved and work to minimize the stress that can be associated with estate and trust litigation. The complexity of litigation, especially in matters involving estates and trusts, can also be expensive and lead to a significant depletion of assets. As a result, our goal is always to resolve the matter as quickly and effectively as possible to preserve the assets of the estate or trust.
Our estate planning and litigation practices work closely together in representing beneficiaries, executors, trustees and other fiduciaries to resolve disputes over the administration of an estate, wills and trusts. Our attorneys handle a variety of cases, including:
- Will and trust disputes, including challenges to the will or trust on grounds of undue influence, lack of capacity, intentional interference with an expectancy, fraud, lack of compliance with formalities in execution, and interpretation of ambiguous provisions
- Representation of trustees, executors and beneficiaries over disputes involving breach of fiduciary duty, failure to account, failure to make timely distributions, self-dealing and excessive compensation, creditor claims, violation of the terms of the trust and actions to remove a trustee, executor or other fiduciary
Estate and Gift Tax Planning
Current federal gift, estate and generations skipping tax rates are at 40%, which can have a significant impact on the transfer of wealth to a client’s beneficiaries. States, such as Illinois, also impose their own estate or inheritance tax as well. Fortunately, the current exemptions from transfer taxes are at their highest levels ($5,490,000 federal in 2017). Nevertheless, many of our high net worth clients significantly exceed these exemptions requiring additional tax planning. Our estate planning attorneys can provide guidance on the proper implementation of gifting strategies to leverage their exemptions to reduce or eliminate such taxes, including the preparation of family limited partnerships, installment sales to grantor trusts, grantor retained annuity trusts (GRAT), qualified personal resident trusts (QPRT) and charitable trusts. In addition to implementing these techniques, we prepare both estate tax returns (Form 706) and gift tax returns (Form 709) for our clients.
Special Needs Planning
Special needs planning involves helping families make proper arrangements for a child or other relative who has a disability. We work with families to ensure their estate planning documents provide for the particular needs and circumstances of their loved one with a disability. This may involve creating a special needs trust for the child or other relative to ensure that means-tested public benefits, such as SSI and Medicaid, remain intact, even if an inheritance or gift is payable to the trust.
In addition, when a person with a disability receives an inheritance outright or a settlement or jury award in a personal injury lawsuit, care must be taken to ensure that person remains eligible for these means-tested public benefits. We advise individuals and families on their options, which may include certain types of special needs trusts or other alternatives to ensure public benefits are not reduced or eliminated.