4 Strategies to Ensure Your Legacy Is Protected for Multiple Generations

As the saying goes, Rome was not built in a day. Similarly, your wealth and assets likely did not appear overnight. It took years of hard work and smart investments for you to accumulate your property, and you understandably want yourself and your loved ones to enjoy the fruits of your labor.

However, without proper management of your assets, what took you a lifetime to build can vanish within a couple of generations following your death. Limitations imposed by federal and state law, mismanagement of assets, and federal and state taxes are just some of the obstacles that can keep you from benefiting your family after your death.

Multi-generational estate planning requires advice and direction from a knowledgeable California estate planning attorney who knows the options available to you to mitigate the risks to your assets and legacy. Take a closer look at some of the key strategies your attorney may discuss with you.

4 Ways to Protect Assets Through the Years

Your estate planning attorney may suggest any of these four multi-generational estate planning strategies:

1. Create an Estate Plan

Two out of three Americans have no estate plan in place. One of the first steps to protecting your assets for the generation immediately following yours is to create an estate plan. Even a simple estate plan can reduce the amount of taxes your heirs and beneficiaries would owe and control who receives your assets.

2. Plan Your Giving

A multi-generational estate plan should also consider gift planning. Under federal law, you are permitted to give assets as gifts. However, if the cumulative value of these gifts each year and over the course of your lifetime exceeds statutory limitations, then you and the recipient could be subject to a 40% federal gift tax.

When done properly, gifting can be a way to preserve your assets and safeguard them against probate and taxes.

3. Create a Trust

When it comes to avoiding probate, limiting tax liability, and benefiting relatives who have not yet been born, there is perhaps no greater tool in the estate planning attorney’s toolbox for multi-general estate planning than the dynasty trust. The dynasty trust is just one type of trust in California, however.

All trusts operate generally by creating a legal entity that can hold, manage, and distribute property. Because the entity never “dies,” property held by a trust does not pass through probate, and no estate taxes are owed. A trust can also control how and for what purposes the trust property is distributed.

An estate planning attorney can help you decide whether a dynasty trust or another trust is appropriate for you.

4. Consider Life Insurance to Pay for Taxes

If you are a high-net-worth individual, you may want to consider purchasing life insurance as a method of protecting against unknown changes in tax laws. These changes can increase the estate tax or gift tax, impacting the assets you are able to give to your loved ones for their use. 

A life insurance policy’s proceeds can be used to pay these taxes, if applicable, and can be one way to avoid taxes by reducing the amount of assets that would otherwise grow.

How an Orange County Estate Planning Lawyer Can Help

Multi-generational estate planning is challenging and should be done with the assistance of a seasoned attorney who knows the options available along with the risks and rewards of those options.

At OC Wills & Trust Attorneys, our knowledgeable team can explore these and other strategies to help you protect your assets. To learn more about safeguarding your hard-earned estate for future generations to enjoy, schedule a consultation with an Orange County estate planning attorney from OC Wills & Trust Attorneys today.

Brian Chew, the managing partner of OC Wills & Trust Attorneys, has extensive experience in the areas of estate planning, asset protection planning, business succession planning, long-term care planning, and veterans’ benefits. By devoting his practice to estate planning matters, he has founded a firm that strives to provide exceptional service to their clients by working closely with individuals and their families to create comprehensive and customized estate plans. For the past twenty five years, Brian has served thousands of clients in the matters of estate planning, wills and trusts. If you have any questions about this article, you can reach Brian Chew here.