A helping hand: Addressing your parents in your estate plan

Posted on February 4th, by mad121704 in Estate Planning Briefs.

The “sandwich generation” is a large segment of the population. These are people who find themselves caring for both their children and their parents at the same time. As a result, estate planning—which traditionally focuses on providing for one’s children—has expanded in many cases to include one’s aging parents as well.

Trust-based strategies

There are many trust-based strategies you can use to assist your parents. For example, in the event you predecease your parents, your estate plan might establish a trust for their benefit, with any remaining assets passing to your children when your parents die.

Another option is to set up trusts during your lifetime that leverage your $5.45 million gift and estate tax exemption. Properly designed, these trusts can remove assets—together with all future appreciation in their value—from your taxable estate. They can provide income to your parents during their lives, eventually passing to your children free of gift and estate taxes.

Don’t overdo it

As you review trust strategies and other options for assisting your aging parents, try not to overdo it. If you give your parents too much, these assets could end up back in your estate and potentially exposed to gift or estate taxes. Also, keep in mind that certain gifts could disqualify your parents from certain federal or state government benefits. Contact us if you’d like to discuss your specific situation.

© 2016




HOBERMAN & LESSER, LLP