Expert planning for today's needs and tomorrow's dreams
Trust and estate planning is anything but a one-size-fits-all undertaking. Our clients' financial situations are unique and complex, and they require sophisticated strategies.
Your BB&T Wealth advisor helps you think through the important questions in order to design a blueprint that provides for your family, protects your assets and defines your legacy for generations to come.
As a BB&T Wealth client, you'll also have access to a wide array of trust account options.
Avoid the costs and hassles of probate while preserving privacy and relieving the burden of asset transition
During your life you may add, withdraw, buy or sell any asset as you would today, and the tax status of a revocable trust remains the same as if you owned the assets in your name, which:
- Allows for the ability of a successor trustee to maintain your financial well-being upon incapacity
- Assists in relieving a burden and liability on family members
- Provides an immediate transfer upon your death to maintain continuity for your spouse or heirs
- Avoids probate fees and maintains privacy
Special needs trusts
Ensure that your special-needs beneficiary remains eligible for government programs
Specifically drafted to provide for your loved one's well-being without jeopardizing their eligibility for government benefits, the uses for a special needs trust include:
- Caregiving – a personal attendant or therapies not covered by Medicaid
- Experiences – travel or special events
- Services – mobile phone, Internet, house cleaning
- Durable goods – furniture, clothing, computer
Endow your beneficiaries while promoting positive life choices
Designed to encourage your heirs to live a responsible life, incentive trusts specify certain conditions prior to inheritance, such as:
- Reaching a certain age
- Graduating from college, marrying, serving the community, carrying on the family business or other life events
- Avoiding illegal drugs, alcohol abuse, gambling, or other potentially destructive behaviors
Irrevocable life insurance trusts
Take advantage of a purposeful loophole created by Congress, using little-to-no lifetime exemption in most cases
If an ILIT is created to own a life insurance policy, and the proceeds of the policy are payable to the trustee, then it can:
- Avoid insurance cash value or death benefit from becoming a part of your estate
- Be used to provide liquidity for estate taxes and other debts by purchasing assets from the grantor's estate
- Protect assets from creditors of a beneficiary given the trustee's discretionary power over distributions
- Leverage the grantor's generation-skipping tax exemption
Qualified personal residence trusts
Reduce the gift or estate tax on transferring a residence
For those who have a substantial estate and expect to face future transfer taxes, a qualified personal residence trust:
- Is a lifetime transfer of a personal residence (primary, vacation or second home) to the trust
- Provides continued rent-free use of the residence for the term of the trust
- Greatly reduces the gift or estate tax cost of transferring a residence
Intentionally defective grantor trusts
Enable your heirs to receive income earned from the trust free of income tax liability
A tool used to lower your taxable estate while providing extra wealth for your beneficiaries, the intentionally defective grantor trust:
- Usually is funded through an irrevocable gift or the installment sale of an asset
- Removes assets completely from the grantor's estate
- Freezes assets for estate tax—not income tax—purposes
- Provides beneficiaries with appreciating assets without incurring additional transfer taxes
Grantor retained annuity trusts
Transfer wealth while minimizing estate tax exposure for your beneficiaries
For individuals wishing to maintain control and a right to distributions for a period of years, a grantor retained annuity trust:
- Entails a transfer of cash or property into a trust in exchange for an annuity payable to the grantor for a fixed term
- Is most effective in a low interest rate environment
- Offers cash flow advantages and predictable tax results
Charitable remainder trusts
Increase your current cash flow while reducing capital gains and estate taxes
For donors with appreciating assets who want to retain an attractive income stream, a charitable remainder trust:
- Provides an immediate charitable income tax deduction
- Allows for the sale of transferred property with no immediate tax consequences
- Includes a life insurance option to avert a "lost inheritance" occurrence
Charitable lead trusts
Provide for your heirs while leaving a sizable charitable gift
Especially beneficial in low interest rate environments where the goal is to pass remainder interest to family members, a charitable lead trust:
- Provides for annual distributions to one or more charities for a set number of years
- Allows the donor to control the ultimate disposition of the trust
- Is a tax-efficient means of making a future transfer to heirs
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BB&T Perspectives shares financial, leadership and lifestyle perspectives with the hopes of enhancing our clients' lives. Learn more about the trust and estate planning topics our Wealth experts are discussing.
Passing Down Family Values
How you plan your estate will determine how you're remembered and will shape the relationship your children and grandchildren have with money.
The Charitable Remainder Trust
If you're charitably inclined and are interested in a planning strategy that can provide increased income while simultaneously lowering your total income tax, consider the well-known and established Charitable Remainder Trust (CRT).
How should I structure and execute my will?
A last will and testament may be your most important financial document, and you'll want to consider the optimal ways to structure and execute it.
5 key questions to structure your will
Answering the following questions will provide the foundation for structuring your last will and testament.
1. Who should I name as my beneficiaries?
This can be a single individual, a number of individuals, one or more nonprofit organizations, or a combination.
2. How should my assets be distributed among beneficiaries?
In a will, you can list specific items and who will receive them. These items may include heirlooms, the family home or other assets. You can also bequeath specific dollar amounts to various beneficiaries. And you can designate a certain percentage of your assets to beneficiaries of your choice, once expenses and debts have been paid and other bequests have been made. Many people choose to incorporate a combination of these approaches. Remember, you can make changes later if needed; the key is to have a will in place.
3. Who will I name to serve as executor of my estate?
This person can be a family member or trusted friend, a legal or financial professional or an institution. Keep in mind that serving as executor of an estate can be a time-consuming process involving detailed asset valuations and reporting. The most effective executor is one who has the needed skills and can dedicate the time required to fulfill these responsibilities. You may prefer to designate co-executors, including a family member or friend along with an institution.
4. Do I need to name a guardian for my minor children?
If you have young children, naming a guarding for them is an important step. You may also want to establish a trust and name a trustee to protect their inheritance.
5. I have complex family relationships. Might this require additional legal documents?
Possibly. If, for example, you're in a second marriage involving a spouse's children from a previous marriage, you may want to talk with your attorney about ways to ensure your assets are divided according to your wishes.
The process of structuring and executing your will
When structuring a last will and testament, remember that states have different requirements to ensure that a will is honored. Here are the typical steps involved in structuring and executing a will.
1. Getting witnesses
Typically, a will must be written, signed, dated and witnessed by two people to be considered legally valid. In some states, the document must also be notarized. To avoid any implication that you've written the will under undue pressure, beneficiaries to the will shouldn't serve as witnesses. It's a good idea to initial and date each page of the document.
2. Filing your will
Following your death, your executor must file your will with the appropriate clerk of court, typically in the county where you were residing at the time of your death. The court determines whether the will is valid and, if so, allows it to enter a process known as probate.
Upon probate, your executor is required to follow a number of actions. These actions include providing detailed inventories of your assets and their value, ensuring that all insurance and other proceeds are received and that all debts and taxes are paid. The court oversees each step in the probate process, which typically takes at least 6 months and often longer.
Some wills don't have to be submitted for probate. If all property is held in joint tenancy or is owned by certain types of trusts you've created, probate may be avoided, along with the costs of probating the will. When probate is complete, your assets can be divided among your beneficiaries.
Keeping your will up to date
It's important to review your will from time to time, especially if key events in your life trigger the need for possible changes. Examples include:
- Marriage or divorce
- Birth or adoption of a child or grandchild
- Death of a named beneficiary
- Death of an executor or guardian
- Change of residence to a different state
- Dramatic change in your financial circumstances
- Regulatory change affecting estate planning
It may not be necessary to completely rewrite your will in order to update it. You may be able to attach a codicil—a written amendment used to add to, remove from or otherwise modify the terms of the original will. A codicil must be signed, witnessed and dated, and must reference the original will.
As with all important financial documents, it's important to store your will in a safe place where it will be easily accessible. Make sure to talk through the provisions of the will with your executor(s) and provide a copy to them.
The bottom line
Creating a will is a smart financial move. First, you need to answer some important foundational questions. Once you've structured your will and understand how it will be executed, you'll want to keep it current. Then, you can rest easy knowing that your loved ones will be taken care of in the future.
Your BB&T Wealth advisor will help you create a comprehensive, strategic plan to integrate and coordinate your banking, credit, investments, risk management, and trust and estate planning services.
Estate planning and settlement services
Effective planning protects your family and your assets, and helps your estate move smoothly through the settlement process.
There are many ways you can spend your money, and charitable giving can be one of the most rewarding.