TRUST FUND TAVERN

At first, Bill had no formal estate plan. That meant:

• All of his assets (homes, investments, business) would go through probate, a court process that’s: 
  • Public
  • Time-consuming (often 9–18 months)
  • Expensive (legal fees can take 3–7% of the estate)
• Federal estate taxes would take a big bite:
  • The federal exemption is expected to fall to around $6–7 million in 2026
  • That means about $8–9 million of Bill’s estate could be taxed
  • At a top tax rate of 40%, his family could owe $3–4 million in estate taxes
• No guidance for who would:
  • Run his business
  • Inherit specific properties
  • Handle money for his minor grandkids

 Here’s how Bill transformed his estate planning: 

A revocable living trust is a legal tool that lets you control your assets while you're alive and distribute them smoothly after death.

Why Bill used it:

• Avoids probate—his estate won’t get tied up in court
• Maintains privacy—his finances and wishes stay out of public record
• Gives control—he chose who gets what, when, and how

He also created a pour-over will, which acts as a safety net for anything not in the trust.

A trust only works if it actually owns the assets.

Bill transferred ownership of:

• Real estate propertie 
• Investment accounts
• Business interests
• Valuable personal items (like art and collectibles)

This step ensured those assets could be passed on without probate and according to his wishes.

 ✅ 3. Made Strategic Lifetime Gifts

To shrink the size of his taxable estate, Bill started giving away assets while still alive.

What he did:

• Gave up to the annual gift tax exclusion amount ($18,000 per person in 2024) to his children and grandchildren
• Funded 529 college savings plans
• Donated to his favorite causes 

Result:
These gifts gradually lowered the taxable value of his estate—saving millions in future estate taxes.

To go further, Bill used irrevocable trusts that took assets out of his taxable estate:

• Held life insurance policies
• Proceeds from the insurance weren’t counted as part of his estate
• Saved hundreds of thousands in estate taxes
   

 🤝 Charitable Remainder Trust (CRT)

• Donated appreciated assets (like stocks)
• Got a charitable deduction
• Provided income to Bill (or family) during life
• Remainder went to charity after death

Bonus: This also avoided capital gains tax on the appreciated assets.

• Chose his smart, dependable niece Susan as the successor trustee
• Appointed a durable power of attorney for finances (in case of incapacity
• Named a healthcare proxy for medical decisions
• Left instructions for business succession

Result: There was no guessing about who would take over.

Bill made it a habit to review his estate plan every 2–3 years, and after major life changes:

• New grandchildren
• Selling a property
• Changes in tax law
   

He kept everything up to date so it always reflected his real wishes.