Trusts & Estates

Walker Lambe Rhudy Costley & Gill, PLLC provides legal counsel to individuals and families regarding a broad variety of financial, estate, trust and business issues. From sophisticated tax and financial planning to the structuring of estate plans or the administration of trusts and estates, Walker Lambe offers personalized service for your family’s legal needs. You may need to plan for retirement, to secure for the future of your family business, to provide for a family member who is disabled, to plan for the education of children and grandchildren, or to establish a private foundation to further your family’s charitable goals. In all events, Walker Lambe’s Estate Planning Group is prepared to help you plan for the future of your family and your business.

For a more specific look at our services, click the headings below.

Asset Protection Planning

Asset Protection encompasses a variety of areas of law and can be helpful for many different kinds of clients. It can include estate tax planning (reducing the burden of estate taxes upon your death), long term care planning (planning for long term care needs in advance through Medicaid planning or through the purchase of long term care insurance policies), establishment of pre and post-marital agreements (protecting your assets in the event of the dissolution of your marriage, or ensuring that assets pass in the manner that you choose at your death), or protecting your assets from potential litigation or other unforeseen events.

Beneficiary Designations

Estate Planning is not just about preparation of Wills and Trusts. Many of your assets will not pass pursuant to a Will or Trust at death. Competent planning will involve getting all of your financial affairs, including beneficiary designations on life insurance policies and retirement accounts, “in sync” with your Wills and Trusts and other legal documents.

Business Succession Planning

A business succession plan provides for the orderly disposition of shares in the company in the event a shareholder wants to voluntarily transfer his shares, retires, becomes disabled, or dies. Dissolution of a marriage may also be covered in such plans. Coordination with estate planning goals and objectives is of obvious importance.

Charitable Giving Strategies

Many of us give to charities out of a concern for other people and because we want to help support specific causes. In addition to having a charitable intent, some financially savvy individuals recognize that they can improve their own financial position, or benefit their family, while simultaneously making provision for their favorite charity. There are several different charitable giving strategies to be considered, each of which yields different benefits.

Outright/Present Gifts
The benefits are that the charity gets immediate use of your donation, while you will receive a valuable current income tax deduction.

Testamentary Gifts
A bequest made as part of a Will or Trust will benefit the charity at your death, and will qualify for an estate tax deduction at your death (but involve no income tax benefit)

Deferred Gifts
With deferred gifts, the charity might get nothing until your death, but you, as the donor, might benefit both from a current income tax deduction and also from an estate tax deduction at your death.

Charitable Trusts
Establishing a charitable trust may involve any one of many specific kinds of trusts that eventually result in a gift to a charity. Certain recognized forms of charitable trusts allow the donor or the donor’s family to reap substantial income or estate tax benefits. There are many types of Charitable Trust arrangements, but most are characterized by their irrevocability. In a charitable remainder trust, a donor irrevocably transfers selected assets to a trust, though the donor may actually be the trustee. The trust may retain or might more frequently sell those assets (without the same capital gains tax burden the donor might have faced), and in accordance with the trust’s formula, make periodic distributions of income or principal to the donor or members of the donor’s family for the lifetime of the beneficiaries or for a specified term, after which, whatever remains in the trust will be given to charity. The donor is entitled to a current income tax charitable deduction, based on a calculation of the present value of the remainder interest payable to charity.

Estate Administration

If your family has experienced the loss of a family member, our law firm can assist you with the legal process that occurs when a loved one passes away. If your loved one had a Will, the estate administration will involve a court process called probate. If your loved one had a properly drafted and funded Revocable Living Trust, much of the administrative process will take place free of the Court’s supervision.

Our law firm strongly believes that a wisely formulated, competently drafted, carefully executed estate plan is the critical component of a family’s wealth management. Our firm’s guiding principle is to provide families in Durham, Chapel Hill, Raleigh, Cary and surrounding areas with quality estate planning services tailored to each client’s specific needs and goals. Walker Lambe Rhudy Costley & Gill, P.L.L.C. provides the highest quality of legal services, tailored to individual needs and with a sensitivity to cost. Please contact us to request a consultation with a qualified estate planning attorney.

Estate Planning

If you have a well-conceived and competently-drafted estate plan in place, you’ll ensure that your estate passes to whom you want, when you want, and in the manner you’ve chosen. You can rest assured that your family won’t have unnecessary or unwanted exposure to the public and sometimes burdensome matter of probate. Appropriate tax planning will ensure the government won’t get more than its share of what you’ve spent a lifetime building. But you need to be aware of the many options that exist in estate planning – and you must choose your estate planning attorney wisely. We offer a wealth of free information and free estate planning/living trust seminars for residents in and around the Research Triangle area. Read our Estate Planning News, or join us for a free Estate Planning Seminar in the area. We want you to feel confident about the choices you make – let us be your guide on the path toward preserving your family’s future.

Estate Tax Planning

The applicable estate tax exclusion amount is $5,000,000 for decedents dying in 2011 and 2012 (and this amount will be adjusted for inflation in 2012).  Unless and until Congress acts again, in 2013 and beyond, the estate tax exclusion amount will return to the $1,000,000 level set forth under prior law. For those whose estate exceeds the estate tax exclusion amount and is thus subject to estate taxes, the tax burden is huge. With proper planning, the tax owed at your death can be substantially reduced or eliminated entirely. One of the most common strategies for married couples for reducing or eliminating the burden of estate taxes involves setting up Revocable Living Trusts which incorporate tax-wise Family Trusts, which allow married couples to take advantage of the estate tax exemption for both spouses, if a viable funding strategy is also established.  The Tax Relief Act of 2010 also introduces a new feature for married couples known as portability, whereby the unused exemption of the first spouse to die may be transferred to the surviving spouse, for use at the survivor’s death.  To take advantage of this strategy, an estate tax return must be filed at the death of the first spouse, noting the election by the survivor to transfer the unused exemption. However, unless Congress chooses to extend it, this feature is also set to expire in 2013.  Another common strategy for reducing the burden of estate taxes for both married couples and unmarried individuals involves establishing annual giving plans, often through use of gift trusts, life insurance trusts, and family limited liability companies. Some clients will use various charitable giving strategies, and others will carefully plan large lifetime gifts, frequently involving specific trust designs. To find out what estate tax planning strategies would be available and beneficial for you and your family, please contact our office to schedule a consultation with an estate planning attorney.

Family Partnerships or LLCs

Family Limited Partnerships
A strategy that can help you meet such diverse goals as family unity, reduction of administrative expenses, protection of accumulated wealth from lawsuits creditors, and reduction of potential estate taxes, the Family Limited Partnership may be something you should consider as part of your Family or Business Plan. We will help you determine if it’s right for your family and your business.

Limited Liability Companies
Liability protection together with tax planning flexibility (which can yield benefits!) are the hallmarks of this legal tool. If we determine that a Limited Liability Company is appropriate for your situation, we will ensure that you derive all the benefits this company structure offers.

Fiduciary Services

Walker Lambe Rhudy Costley & Gill, P.L.L.C. has a long, proud tradition of advising institutional and individual trustees and other fiduciaries as to legal responsibilities regarding the investment, management and distribution of funds. Where a client lacks appropriate alternatives, individual attorneys of Walker Lambe Rhudy Costley & Gill, P.L.L.C. are experienced, willing and able to serve as a trustees or other fiduciaries for individual or family business and financial matters.

General (Financial/Durable) Powers of Attorney

Execution of a General Power of Attorney allows you to determine who will pay your bills, handle your financial affairs, and make other important financial and legal decisions for you, such as selling real estate or gifting assets to your children, if you become physically or mentally unable to care for yourself. Without a Financial Power of Attorney, if you become incapacitated, a Guardianship proceeding would be necessary to authorize someone to handle these matters for you. Not only would this be costly, but it would also be a time-consuming and potentially embarrassing public ordeal, and there is no guarantee that the guardian named by the Court would be the same person as you would have selected.

Healthcare Directives

The occasion for estate planning is also the time to establish legal documents specifying who will make health care decisions for you if you are incapacitated, as well as to express your wishes concerning end of life care. A proper estate plan will include a Health Care Power of Attorney (specifying who will make health care decisions for you if you are unable to make these decisions for yourself), an Advance Directive for a Natural Death (also called a Living Will, indicating your desires as to the withdrawal of life-support systems, artificial nutrition and artificial hydration, in certain end-of-life situations) and a HIPAA Authorization Form (specifying who should have access to your protected health information and enabling loved ones to speak with your physician concerning your condition).

Life Insurance Trusts

The purpose of an Irrevocable Life Insurance Trust is to own one or more life insurance policies insuring the life (or lives) of the individual (or married couple) establishing the trust. The proceeds of the policy will be available to provide such liquidity as may be necessary to pay estate taxes. Owning the policy in trust, rather than outright, prevents the policy proceeds from being subject to estate taxes in the estate of the insured. Rather than paying the annual insurance premium(s) outright, the individual or couple would instead transfer money to a Trustee, as a “gift” to the trust, made in such a way as to be eligible for the annual gift tax exclusion. The Trustee is specifically directed to notify the beneficiaries of the trust when such gifts have been made, and the beneficiaries are given an opportunity to withdraw the gift (though it is typically not anticipated that any of the beneficiaries would exercise this right, as it would take away funds to pay the premiums), before the gifted funds are used to pay the insurance premiums.

Living Trusts

Establishing and funding a Revocable Living Trust is one common way of avoiding the impact of probate at death. Benefits to establishing a Living Trust include reduction or elimination of probate fees and related expenses, in addition to preservation of privacy. Another significant advantage is the simplification of probate estate administration because the administration of your Living Trust, unlike probate, takes place free of court supervision. A Living Trust can also be prepared to reduce the burden of estate taxes or to place restrictions upon the distribution of assets to beneficiaries who might be underage, or otherwise lack the maturity or financial responsibility to receive their entire inheritance outright, or even to protect an inheritance from creditors or from a failed marriage.

Long Term Care Planning

Long-term health care is the single largest out-of-pocket expense for the elderly and may account for as much as 81 cents out of every dollar spent on health care. Studies show that we stand a forty percent chance of needing long-term care at least once before we die. Therefore, everyone should take into account that at some point residency in a nursing home or an assisted living facility may be needed.

However, the substantial cost of nursing home care for an incapacitated person can wipe away a family’s nest egg and the inheritance planned for surviving family members. It has been reported that one-third of married couples with one spouse in a nursing home will be destitute within 13 weeks. Half will be impoverished in one year. It’s even worse for those who are single. Long-term custodial care is the greatest financial challenge of our later years.

With the increasingly high cost of long-term care itself, many middle-class and even affluent Americans are resorting to Medicaid to help them afford this costly medical care. Therefore, it is not surprising that over the years, our clients have expressed a number of major concerns about how to adequately plan for potential incapacity and the impact of their incapacity on their life savings and Medicaid benefits. If you have questions about Medicaid eligibility, be sure to call sooner rather than later, as the timing of the decisions families need to make will have a dramatic impact on whether or not someone can actually qualify for this type of support.

As more and more Americans need long term care, we can expect that it will become increasing difficult to qualify for Medicaid. In most states, Medicaid is the second biggest item on the budget, and in a handful of states it is the biggest. The purchase of Long Term Care Insurance is a relatively new, but rapidly growing option for many of our clients.

The complexity surrounding this constantly changing area of the law can sometimes feel overwhelming, but it doesn’t need to be. We are here to help answer your questions about this difficult area. People are living longer these days and the importance of making certain they don’t outlive their money has never been as vital as it is today. Planning in advance is extremely important to ensure not only that you are cared for during old age or disability, but that the wealth you have worked so hard to accumulate over the years might be passed on to your family, rather than spent on long term care.

Planning for the GLBT Community

If a member of the GLBT community fails to properly plan, the result can be devastating to his or her partner and family. Having no estate plan, or relying upon a Will, Joint Tenancy, or Tenancy in Common as an estate plan, is tantamount to giving up control of one’s estate and management of one’s well-being in times of incapacity.

This need for an estate plan is critical in case an accident or illness renders the partner incapable of making decisions or managing his of her affairs. Without a proper estate plan, the other partner could be legally precluded from having any role in the decision-making of a partner’s care, managing his or her affairs, or even having access to the incapacitated partner.

Our law firm strongly believes that a wisely drafted, carefully executed estate plan is the critical component of an individual or a family’s wealth management. Our firm’s guiding principle is to provide families with quality estate planning services tailored to each client’s specific needs and goals. We are familiar with the unique challenges facing members of the GLBT community and our attorneys would be happy to consult with you and develop a plan to protect your estate and your loved ones.

Pre and Postnuptial Agreements

Pre and Postnuptial Agreements can be established to protect your assets in the event of a divorce, as well as to provide that certain assets are passed on to future generations, charities, or other beneficiaries of your estate plan, other than your spouse, at your death. A proper pre or postnuptial agreement will need to be drafted in coordination with your estate plan to ensure that statutory marital rights are not an unexpected obstacle to the achievement of your goals and objectives for the preservation and future enjoyment of your assets.

Probate Assistance

The legal process of settling the estate of a deceased person is known as probate and is handled through the courts. The first step is the appointment of the personal representative of the estate (if the decedent had a Will, this person is called the Executor). The personal representative is charged with gathering all of the assets of the decedent, identifying and paying the decedent’s debts, including taxes, paying necessary administrative expenses, and then distributing the remaining assets to the beneficiaries under the Will or intestacy laws, if the decedent died without a Will. Along the way, a detailed inventory of probate assets must be prepared and filed with the Court (and assigning proper values to the assets), followed by detailed accountings with supporting documentation for the Court’s audit. Probate proceedings can sometimes be avoided or simplified through use of a summary administration, small estates procedure, or through the establishment and proper funding of a Revocable Living Trust during the decedent’s lifetime.

Special Needs Beneficiary Planning

Planning for the care of loved ones with special needs certainly tops the list of emotionally-charged and potentially complex topics. If untimely death or disability strikes, who will care for your children? The question is difficult to confront, but the peace of mind parents gain from a well-designed estate plan can more than compensate for having to plan for the unthinkable.

How a Special Needs Trust Works
A Special Needs Trust allows a parent, grandparent or guardian to provide funds for a disabled child without disrupting the child’s eligibility for government aid. Setting one up is a fairly simple process. Important points to remember while investigating the use of this estate planning tool are:

  • Decide on an appropriate guardian for your child.
  • Determine who would be a suitable trustee(s) to manage the trust’s assets and supervise your child’s finances.
  • Outline instructions for your child’s education, housing and other personal needs

Trust Administration

There are many different forms of trusts, so trust administration can take many forms.

The administration of a decedent’s Revocable Living Trust (which becomes irrevocable at death) is a process which will vary depending on the size of the decedent’s trust estate and the complexity of the trust being administered. Many of the steps parallel the steps of a probate estate administration. Trust assets will need to be identified and collected and valued. The valuation process is often much more complicated than it might seem – many assets are not really marketable, and thus difficult to value.

If there is a parallel probate proceeding, the executor and Trustee will need to work together on many tax compliance responsibilities and in considering a wide range of post mortem estate planning strategies that may offer significant benefits to the estate and its beneficiaries. After payment of taxes, debts and final expenses, distributions of trust assets may be made either outright to beneficiaries or to various sub-trusts established within the trust.

In the event that various sub-trusts are established, care will need to be taken to ensure that distributions of principle or income or both to beneficiaries are made in conformity with the provisions of the sub-trust, an annual tax return will need to be filed for each such sub-trust, and accountings may need to be prepared for the trust beneficiaries.

Wills

From the drafting of simple wills to sophisticated tax and financial planning and the structuring of complex estate plans, which might incorporate wills and multiple trusts, and family and charitable gifting plans, our estate planning attorneys provide the highest quality of legal services, tailored to individual needs and with a sensitivity to cost. Whatever the size of your estate, and however simple or complex your distribution scheme is to be, we will help you understand the issues, advise you regarding your options, help you define your goals, and counsel you regarding family circumstances or financial matters that present unique challenges.

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