Palo Alto Family Protection Trust Attorneys
Protecting the Financial Security of Future Generations in the Bay Area and All of California
At Gilfix & La Poll Associates LLP, we take great pride in our ability to serve your family and ensure its future security. To that end, we created the Family Protection Trust™, a type of irrevocable trust designed to preserve generational wealth. The Family Protection Trust – or FPT – is conceptually similar to the well-established “Dynasty Trust.”
If you hope to provide for your children and grandchildren but wish to avoid federal estate taxes, gift taxes, and generation-skipping transfer taxes, our Palo Alto Family Protection Trust lawyers can help. We have leveraged FPTs and other proactive tools to save hundreds of millions of dollars in taxes for our clients. Our team also has over thirty-five years of legal experience and has assisted thousands of clients with their estate planning efforts. We can walk you through the advantages of this powerful instrument and implement a plan that will provide you with the peace of mind you deserve.
Schedule a consultation to learn more about how implementing a Family Protection Trust can benefit your loved ones by contacting us online or calling (650) 683-9200.
What Is a Family Protection Trust and How Does It Work?
The FPT is a long-term irrevocable trust created for the benefit of your children, grandchildren, and beyond. Like with any trust, a trustee will manage and distribute trust assets in accordance with the trust agreement.
Because an FPT is irrevocable, you will not have control over any trust assets. However, this does not mean you will be unable to access any assets you wish to leave to future generations. While you can elect to gift assets to your FPT, you can also provide for the distribution of your estate to the FPT in your revocable living trust. In other words, you can continue to control the majority of your estate throughout your lifetime via your revocable living trust and direct all assets to be moved to your FPT upon your death.
When establishing your FPT, you will have substantial flexibility in deciding how and when trust assets will be distributed. However, you must be aware that FPT terms cannot be amended by you or future generations once they are set. You may elect to only disperse inheritances to your children or grandchildren when certain conditions are met, for example. Conversely, you may also choose to appoint your child to serve as their own trustee and empower them to decide how to invest and utilize trust assets.
Many choose to appoint professional trustees to assist with trust administration. Our Palo Alto Family Protection Trust attorneys are prepared to serve in this capacity, and we can also help you develop trust agreement language that is consistent with your wishes.
Certified Specialists in Estate Planning & Elder Law
Co-Founder of the National Association of Elder Law Attorneys
Pioneers in Elder Law & Estate Planning
Hundreds of Millions of Clients' Dollars in Taxes Saved
Thousands of Families in the Community Served
Over 35 Years of Serving the Bay Area
FPTs confer numerous benefits, including the avoidance of many types of transfer taxes. Assets placed in an FPT also typically enjoy high levels of asset protection.
As of 2022, an individual can transfer up to $12.06 million into their FPT without those assets being subject to federal estate or gift taxes. Married couples can transfer up to $24.12 million.
If you wish to avoid federal estate taxes entirely, your estate’s total value must not exceed $12.06 million (as of 2022). Assets placed in an FPT do not count toward estate value calculations. This means you can transfer assets to your FPT to avoid exceeding the federal estate tax threshold, allowing you to simultaneously benefit future generations and enjoy immediate tax relief.
Assets inherited from an FPT are typically protected during a divorce. In a California divorce, all community property – assets shared by the married partners – is subject to equal division. FPT assets are segregated and thus do not become community property assets. This allows your children to retain their inheritances even if they must endure contested divorces. Given that over half of U.S. marriages end in divorce, this can prove to be a significant form of protection.
FPT assets also enjoy strong protections in the event that a beneficiary is sued or is in default on a debt. Assets in an FPT are not owned by the trustor or beneficiaries and are consequently (in most cases) unreachable by litigants or creditors. It should be understood, however, that inherited assets that are in your child’s name are fair game and can be accessed by a successful litigant or a creditor who secures a court judgment.
The FPT’s ability to circumvent generation-skipping transfer (GST) taxes is perhaps its most compelling and well-known feature. All or most assets left in this trust for the benefit of your child will not be counted as part of your child’s estate upon their passing. This can potentially save millions of dollars for your grandchildren and great-grandchildren.
Taking the initiative to establish an FPT now can ultimately produce enormous dividends, as all of these key benefits will generally remain intact for the benefit of your grandchildren. Our Palo Alto Family Protection Trust lawyers at Gilfix & La Poll Associates LLP are committed to helping you provide for your loved ones now and in the future. We can establish an FPT that works to achieve your goals and protect your family’s financial security.
If you are interested in learning more about the advantages of Family Protection Trusts, do not hesitate to call (650) 683-9200 or contact us online.