Advanced Planning for high-net worth families involves several planning strategies with various options for each. Each planning option is used to address a specific goal and result. Some of the planning strategies involve the following types of trusts.
- SLATs – spousal lifetime access trusts that permit each spouse to be a beneficiary of the trust created by the other spouse.
- DAPTs – self-settled domestic asset protection trusts that permit access by naming the settlor as a beneficiary.
- Hybrid DAPTs – non-self-settled trusts that permit access by giving someone a non-fiduciary power to add beneficiaries from a class that includes the settlor.
- GRATs – Grantor (Settlor) retained annuity trusts.
- SPLATs – Split purchase annuity trusts – two parties purchase an interest in an asset (e.g. the client and a GST exempt trust) and share ownership much like a GRAT.
- SPATs – Special power of appointment trusts that permit access but avoid self-settled trust status.
Advanced planning can benefit you, not just your heirs. Litigation and bankruptcies increase when the economy falters, hence the uncertainty in a changing environment makes Advanced Estate Planning quite important. Economic uncertainty, stock market volatility, recession fears, and foreclosures increase the need to learn how best to protect your high-net worth estate.