Estate Planning
Your future. Our counsel.
Future Counsel helps clients create comprehensive estate according to THEIR unique families, asset portfolios, and desired outcomes. There is no "one size fits all" approach, and all estate plans are customized.
A good attorney knows the law. A great attorney helps you use it to your advantage.
Our estate plans consist of more than just a will. We guide you through all of the "what ifs" and ensure that your loved ones are well taken care of and have clear instructions in the event of your death or disability.
While discussing disability or death can be uncomfortable, this is essential protection you cannot afford to set up. It ensures control over your assets and reduces potential costs, delays, and frustrations for your family in managing your affairs after your passing or disability.
Our comprehensive estate plans include the following:
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Wills
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Trusts (if applicable)
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Living Will/Advanced Medical Directive
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Powers of Attorney
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Financial
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Healthcare Agent
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Instructions for your family
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1. Why and When Do We Use an IRA Beneficiary Trust?
An IRA Beneficiary Trust is a specialized trust designed to hold an IRA (Individual Retirement Account) upon the death of the IRA owner. It is typically used when you want more control over the distribution of IRA assets and to ensure the assets are passed down according to your wishes, while maintaining certain tax advantages. Here’s why and when it’s typically used:
Why Use an IRA Beneficiary Trust?
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Control Over Distributions: An IRA beneficiary trust allows the account holder to control how the IRA’s assets are distributed after their death. This can be particularly useful if you want to ensure that the beneficiaries do not access the funds all at once, or if you want the funds to be distributed over time.
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Protection for Beneficiaries: If the IRA owner has beneficiaries who may not be financially responsible, have creditor issues, or are minors, the trust can provide added protection. It can limit access to the funds and ensure that the inheritance is used wisely.
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Stretch IRA Benefits: For some beneficiaries, a beneficiary trust can provide a "stretch" option, allowing the IRA funds to be distributed over a longer period of time, thus potentially reducing the income tax burden. While the SECURE Act (passed in 2019) has largely eliminated the "stretch IRA" for most non-spousal beneficiaries, some carefully drafted beneficiary trusts can still allow for extended payouts for certain beneficiaries (like disabled or chronically ill individuals).
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Minimize Risk of Improper Beneficiaries: By using a trust, you can specify who exactly inherits the IRA and prevent accidental or unintended beneficiaries from receiving the funds.
When to Use an IRA Beneficiary Trust:
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When you want greater control over how the IRA is inherited: This includes ensuring the funds are distributed to beneficiaries over time (rather than in a lump sum), and stipulating specific conditions or restrictions on how the funds may be used.
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If your beneficiaries are not financially mature or are minors: A trust ensures that they can’t access the funds until they reach an age or meet certain conditions.
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If you have concerns about creditors or divorce: The trust can help protect the IRA from potential creditors or lawsuits.
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To ensure compliance with tax rules: A properly structured IRA beneficiary trust can help maximize the tax benefits of IRA inheritance.
However, not all situations require an IRA beneficiary trust, and it can be complex to set up. Book your initial consultation with Phoenix to determine if it’s right for you.
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A Joint Trust is a single trust document created by two spouses (or partners) to manage their joint assets during their lifetime and dictate the distribution of those assets upon their death.
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Simplicity: A joint trust is a single document that governs all the assets of both spouses. It simplifies the process and management of assets during the lifetime of the couple, as both spouses jointly manage the trust.
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Revocability: Joint trusts are often revocable, meaning the terms can be modified or revoked during the lifetime of the trust creators. This gives flexibility if circumstances change.
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Estate Tax Planning: The trust can be structured to allow for efficient estate tax planning. For example, it can take advantage of the marital deduction, which allows spouses to transfer assets to each other without incurring estate taxes.
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Efficiency in Administration: After one spouse dies, the surviving spouse can continue to manage the trust without much legal complexity, as all the assets are already placed under one unified structure.
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Avoids Probate: Like all trusts, a joint trust avoids probate, which can be a lengthy and costly process for the family.
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A Reciprocal Trust refers to two separate trusts, one for each spouse. Each trust mirrors the other, with the assets of one spouse being left to the other spouse’s trust upon death. The key here is that the trusts are structured similarly, but each spouse has control over their own separate trust.
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Estate Tax Avoidance: The use of reciprocal trusts is often part of an advanced estate tax strategy. By establishing reciprocal trusts, each spouse can gift assets to the other’s trust, effectively allowing them to maximize the estate tax exemption without triggering estate tax on the first spouse’s death.
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Spousal Exemption: The IRS allows spouses to transfer assets between each other without incurring estate taxes, but there can be complications if both spouses leave assets to each other’s trust. When structured properly, reciprocal trusts can avoid this issue, thus ensuring both spouses use their estate tax exemptions.
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Capital Gains and Step-Up in Basis: One of the reasons your attorney may prefer reciprocal trusts for certain clients is that they can help with the step-up in basis of assets at the time of death. If assets are placed in a reciprocal trust, both spouses can receive a step-up in the value of the assets upon the death of the other, potentially reducing capital gains tax if the assets are later sold.
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More Control Over Assets: With reciprocal trusts, each spouse can have more individual control over their respective assets, and the trusts can be more easily modified or revoked independently.
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Complexity: Reciprocal trusts can be complex to set up correctly and must be structured carefully to avoid triggering unintended tax consequences, such as the "reciprocal trust doctrine", which could potentially invalidate the entire strategy if the IRS sees the trusts as a mere tax avoidance strategy rather than an independent estate planning tool.
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The decision between a Joint Trust and a Reciprocal Trust depends on your specific goals for estate planning, particularly related to tax benefits, control over assets, and how you want assets distributed after death.
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Choose a Joint Trust if:
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You and your spouse want simplicity and a unified approach to managing your estate.
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You’re seeking a more straightforward way to avoid probate and manage assets during your lifetime.
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Estate tax concerns are less of an issue, or you’re in a situation where a combined exemption is more beneficial than separating assets.
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You don’t mind giving up some degree of control over separate assets (since all assets are in a single trust).
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Choose Reciprocal Trusts if:
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You’re seeking to maximize estate tax exemptions or minimize estate tax liability through careful planning.
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You want to ensure that assets received from your spouse’s estate will get a step-up in basis.
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You want separate, individual control over your respective trusts, but you and your spouse still have a coordinated estate plan.
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You’re concerned about capital gains taxes and want to ensure that both spouses benefit from a step-up in basis at the time of each other’s death.
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Estate planning is a vital way for Catholic families to ensure their legacy aligns with their faith and moral beliefs. A well-prepared plan not only manages financial assets but also addresses medical and ethical decisions in accordance with Catholic teaching.
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Comprehensive Estate Planning for Catholic Families
A Catholic estate plan integrates spiritual, ethical, and financial considerations to protect loved ones and uphold faith-based principles. Key elements include:
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A Will or Trust – Ensuring assets are distributed responsibly, supporting family members and charitable causes.
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Advance Medical Directives – Reflecting Catholic moral teaching in healthcare decisions.
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Power of Attorney – Authorizing a trusted individual to manage financial and healthcare matters.
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Guardianship Designations – Appointing guardians who will raise children in the faith if parents pass away.
By creating a faith-centered estate plan, Catholic families can ensure that their medical, legal, and financial wishes align with their values, providing peace of mind and a lasting legacy rooted in faith.
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Advance Medical Directives
This allows individuals to make healthcare decisions in advance, ensuring that medical care aligns with Catholic moral principles. The Catholic Church differentiates between ordinary (proportionate) care, which must always be provided (such as food, water, and pain relief), and extraordinary (disproportionate) care, which is not morally obligatory if it imposes undue burdens without reasonable hope of benefit. The directive can include:
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Health Care Agent – Appointing a trusted person to make medical decisions in line with Catholic values.
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End-of-Life Instructions – Stating preferences about life-prolonging treatments, pain management, and palliative care, respecting human dignity while rejecting euthanasia and assisted suicide.
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Organ Donation & Ethical Considerations – Outlining choices in accordance with Church teachings.
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Future Counsel creates bespoke Estate Plans to achieve your goals of wealth transfer to future generations while minimizing taxes, risk of loss, and family acrimony. There is no promise of tomorrow... we help clients plan for their children's future.
Everyone has an estate, which includes homes, cars, investments, and bank accounts. Estate planning organizes these assets for financial independence during life and ensures proper transfer after death. Many individuals create wills and legal documents using online resources, but this can lead to mistakes without professional guidance. Unique circumstances require tailored solutions, which a knowledgeable lawyer can provide by understanding your specific family situation.
No Attorney-client relationship is created by a request for consultation. Consultation requests should not include any confidential information or seek immediate legal advice, for this reason.
Courts admitted to practice in:
Virginia; Virginia Court of Appeals; Virginia Supreme Court
U.S. District Court, Eastern District of Virginia
U.S. District Court, Western District of Virginia
U.S. District Court, Northern District of California