Michael A. Manna & Associates
Toll Free: 866-678-0459
Phone: 201-345-3018

Let our attorneys provide the legal help Your Family Deserves

Case Evaluation Form

Looking at the long term for wealth preservation

When an individual is able to attain a high level of financial success but does not come from generational wealth, a lack of knowledge concerning complex estate planning is sometimes an issue. Many New Jersey families who have amassed first generation wealth are concerned about how to pass that wealth on to their children, but few take an approach that goes beyond that simple transfer. When it comes to wealth preservation, a long-term strategy is the best possible approach.

Long-term estate planning can be accomplished through the creation of a dynasty trust. These vehicles allow an individual or family to place assets into an irrevocable trust that will help shield the wealth from taxation or loss. It can be difficult to convince many newly wealthy individuals to place assets into a trust that is irrevocable in nature, but there are a number of benefits to doing so.

A dynasty trust can be made more flexible by including language that designates one or more individuals who are empowered to make changes to the trust, which is otherwise irrevocable. Beneficiaries can also be granted powers of appointment, which allows them to play an active role in directing how assets will be used by the next generation. This allows the assets to be managed in a way that is appropriate for a changing family, and ensures that the wealth held within the trust can be put to use as intended, no matter what shape the family may take in the years to come.

Another wealth preservation option that many New Jersey families might consider is the creation of a family limited liability company that is used in conjunction with a trust. This gives members of the company the ability to dictate how distributions are made, which allows for greater control over the assets held within the trust. Giving one's family members roles within such a company allows loved ones to participate in the trust with a degree of transparency, which can help avoid conflict over use of the trust's assets.

Source: The Wall Street Journal, "Why Estate-Planning for a Distant Future Requires Flexibility", Anna Prior, May 4, 2015

No Comments

Leave a comment
Comment Information