Estate Planning

Estate planning is the process by which your assets are invested, managed, and passed on to your loved ones. Our estate plans ensure privacy and minimize delay, taxes, and administrative costs when your property is ultimately passed on to your relatives, friends, or other beneficiaries.

ALL OF OUR ESTATE PLANS ARE BASED ON A FLAT FEE so that there are no surprises for you and your family. Below are some of our more common packages:

1) The Family Estate Plan
2) The Trust Estate Plan
3) The Asset Protection Estate Plan
4) The Special Needs Trust (separately available or as part of another trust package)

The Family Estate Plan

If the total “probate” value of your estate is less than $150,000.00 and you simply want to ensure that (1) your loved ones are well cared for, that (2) your health care wishes are respected, and (3) that your loved ones are able to access your assets, the Family Estate Plan is for you.

The Family Estate Plan includes a Will, Durable Power of Attorney for Property, and an Advance Health Care Directive so that you are taken care of if anything happens to you. If you have children, the Family Estate Plan ensures that your children are always raised by the people you want, in the way you want, by including provisions appointing permanent and short-term guardians, health care agents for their medical decisions, and confidential exclusions of anyone you do not want raising your children. The Family Estate Plan also includes instructions for caregivers and guardians on your beliefs regarding finances, education, religion, discipline, and anything else that may be important to you.


A Will is the most common of all the estate planning instruments, and is a written document through which you (called the “testator”) dispose of your property after your passing. Your Will may also be used to leave instructions respecting the disposition of your remains, to provide a power of appointment, to nominate an executor of your estate, or to nominate a guardian your minor children.


An Advance Health Care Directive typically consists of four or more parts.

The first part of the Advance Health Care Directive is a Power of Attorney for Health Care. This part allows you to appoint someone else to make decisions about your health care and allows you to determine the moment when your Power of Attorney for Health Care becomes effective.

The second part includes your individuals instructions, which let you state your wishes about health care if you can no longer speak for yourself. You can also limit these instructions to only take effect if a certain condition arises. For example, you can instruct your agent regarding end of life decisions and relief from pain.

The third and fourth parts of the Advance Health Care Directive allow you to express your wishes regarding organ donation and designate a physician to have primary responsibility for your health care.

An Advance Health Care Directives can also be customized further depending on your specific needs. For example, the Directive can cover advance care plans regarding mental illness.


A Durable Power of Attorney for Property authorizes another person (an “attorney-in-fact”) to make decisions regarding your property on your behalf. A Durable Power of Attorney can give that person a general authority to be exercised at any time, or it can provide authority only at a specified future time or when a future event happens, such as your inability to make financial decisions on your own behalf. In the context of our estate plans, the latter option is the most common. A properly drafted Durable Power of Attorney has the added benefit that it can eliminate the need for a conservatorship and costly and time-consuming conservatorship proceedings.

Sometimes, a Durable Power of Attorney can be used to give your attorney in fact authority to enter into contracts regarding your property, to sell your property, and to make tax planning decisions for you.

The Trust Estate Plan

If the total “probate” value of your estate is over $150,000.00, the Trust Estate Plan ensures that your family’s privacy stays respected. The Trust Estate Plan can also save you a significant amount of time and money.

This is because the Trust Estate Plan ensures that your loved ones avoid the cost, hassle, and time associated with probate proceedings. The Trust Estate Plan also ensures that your sensitive estate planning documents remain private and away from the public record.

For singles or previously unmarried couples, a Revocable Living Trust is usually the preferred type of trust to use. However, for previously married couples who want to ensure that their children from a previous marriage are cared for, of for asset protection purposes, different types of trusts, (for example, a qualified terminable interest property (“QTIP”) trust)) may be preferred.

SONA LEGAL APC will provide you with the support and guidance needed to successfully transfer your assets to the trust and will even transfer all of your assets to the trust for you directly for added peace of mind. Just like the Family Estate Plan, the Trust Estate Plan will contain the necessary directions to ensure the protection of your children and their estates, as well as instructions for caregivers and guardians. Like the Family Estate Plan, the Trust Estate Plan also includes a Will, Durable Power of Attorney for Property, and an Advance Health Care Directive.

The revocable living trust, also known as a probate avoidance trust,  is a flexible and cost-effective way that you can use to determine who gets your property when you die. A revocable living trust can be changed at any time as your wishes or your circumstances change and is typically part of a family estate plan including a Will, Durable Power of Attorney for Property, an Advance Health Care Directive, and others. If your estate does not exceed the threshold for the federal estate tax – which as of 2017 stands at $5.49 million dollars for individuals and $10.98 million for married couples – the revocable living trust package is usually the preferred option.

Specifically, the revocable living trust package has the following benefits:

  • Time and Cost. An estate plan often saves time and money over a simple will by avoiding costly and time-consuming probate proceedings upon disposition of the estate. Probate can result in thousands of dollars in legal and court costs that can substantially reduce the payouts to your loved ones or other beneficiaries.
  • Control. An estate plan allows you to provide detailed instructions regarding the disposal of your estate, including when, where, and how money is spent by the trust and the extent to which others have direct your finances and medical care.
  • Provisions for Children. An estate plan not only allows you to appoint guardians for your children, but allows you to tailor the disbursement of trust funds for their health and maintenance, including food, shelter, education, and any other appropriate purpose.

The Asset Protection Estate Plan

For those of you who might be subject to the federal estate tax, the Asset Protection Plan minimizes or avoids the impact of the federal estate tax and the overall impact of taxes generally. After analyzing the totality of your assets, we work with your financial advisors, tax advisors, and insurance professionals to employ a variety of trust instruments as well as other estate planning techniques including co-owned property, life insurance policies, multiple-party accounts, and gifts. In addition, we advise you as to the form in which the assets are held and the legal consequences of different forms of ownership. As of 2017, the federal estate tax applies to estates in excess of $5.49 million for individuals or $10.98 million for married couples.

Of course, just like the Family Estate Plan and the Trust Estate Plan, the Asset Protection Estate Plan allows you to provide instructions, guidance, and protections for your children. While the exact contents of the Asset Protection Estate Plan varies based upon your unique needs, descriptions of some common asset protection trust instruments are included below.


The QTIP Trust is another trust that is used by married couples with high value estates, with the added twist that it is often used by married couples where one or both spouses have been previously married. The QTIP Trust generally has the following attributes:

  • It lets you choose what you want to do with your property rather than completely leaving it to your surviving spouse, which is beneficial for previously married individuals who want to provide for their children from a previous marriage as well as the current spouse.
  • When one spouse dies, the surviving spouse decides how much (if any) of the deceased spouse’s property should be held in trust to maximize estate tax savings. As discussed in the section about A/B Trusts above, with the enactment of the American Taxpayer Relief Act in 2013 this issue is less of a concern but should still be considered.

Depending on the needs of the client, here are several additional provisions that can be added to a QTIP Trust, such as a “Clayton Election” or “QDOT Provision.”


A Life Insurance Trust is another useful way to reduce estate taxes for large estates. A Life Insurance Trust is an irrevocable trust that has a trustee who is not you. The trustee becomes the owner of the policy and through the terms of the trust you determine who controls the policy, how premiums are paid, who is the beneficiary, and how payments are made to the beneficiary.

A Life Insurance Trust has three basic components:

  • The trust must be irrevocable.
  • You cannot be the trustee of the trust.
  • The trust must exist for at least three years before your death.

A Charitable Remainder Trust is an irrevocable trust that is used by clients who have an asset that they would eventually like to donate to charity (including cash), but would not like to lose the income that would be received from immediately selling or donating the asset. Because the Charitable Remainder Trusts are generally tax free, a client is able to place the asset in the trust and then take periodic distributions from the trust until the asset is ready for final distribution. The Charitable Remainder Trust must take the form of an Annuity Trust or a Unitrust and cannot be blended.


A Grantor Retained Annuity Trust is a type of trust commonly used by people to provide large financial gifts to their family members while avoiding paying gift tax on that gift. With a Grantor Retained Annuity Trust, the family transfers assets that are expected to increase in value (typically stocks) into an irrevocable trust. The beneficiary then is guaranteed to receive a certain amount periodically for the term of the trust. By taking advantage of certain IRS regulations and valuations, so long as the assets in the trust appreciate substantially, the benefiting family members with little or no tax consequences.

Two similar trusts exist: the Grantor Retained Income Trust (GRIT) and the Grantor Retained Unitrust (GRUT).

With a Grantor Retained Income Trust, the maker of the irrevocable trust has the right to all trust income for a specific term. This trust is not available to close family members such as children and grandchildren.

A Grantor Retained Unitrust is a type of irrevocable trust where the annual payout varies from year to year, depending on the value of the trust.


A Qualified Personal Residence Trust is an irrevocable trust set up to remove the value of your personal residence from the overall value of your estate for estate tax purposes. By gifting the residence to the trust, you are able to subtract the value of the residence from your estate. When you set up the trust, you retain the right to live in the house for a number of years, rent free, and the beneficiaries of the trust own the home after the term of the trust is completed.

The transfer home is subject to gift tax, but you can subtract the value of your right to live rent free in the residence from the fair market value of the residence for gift tax purposes.

If you do not survive the term, the entire value of the property will be considered part of your estate. At the end of the term, if you have not died, the value of the property will not be included in your estate for estate tax purposes.

A drawback of the Qualified Personal Residence Trust is if you live longer than the term of the trust and the property is transferred before you pass away. There are also income tax consequences for the beneficiary in that scenario. Consultation with a qualified attorney and/or and experienced tax advisor is strongly advisable before making a decisions on whether or not a Qualified Personal Residence Trust is right for you.

The A/B Living Trust and A/B Disclaimer Trust are two types of irrevocable trusts (meaning that they cannot be changed once implemented) that are typically used for married couples with larger estates. Technically speaking, these types of trust are the combination of (1) a Martial Deduction Trust (the “A” trust) and (2) a Bypass Trust (the “B” Trust).

Prior to the enactment of the the American Taxpayer Relief Act (“ATRA”) in 2013 the A/B Living Trust was a very popular method of estate planning for high value estates because both types of trusts allow certain allocations that ensured the availability of the federal estate tax exemptions for spouses whose individual estates where in excess of the estate tax exemption.

However, the ATRA explicitly provided for “portability” between the estates of married couples without the need for an A/B Trust. “Portability” allows for a deceased spouse’s unused estate tax credit to be added to a surviving spouse’s estate tax credit. For example, in 2017, if a spouse died with an estate of $3 million dollars, the surviving spouse would be able to add a tax credit of $2.49 million dollars to their estate tax exemption (the difference between the $5.49 million exemption and the $3 million dollar value of the estate). Adding that $2.49 million dollars to the $5.49 million dollar exemption for the surviving spouse would then in effect create an exempt amount of $7.98 million dollars for the surviving spouse.

Because the ATRA now explicitly permits “portability” the A/B Trust and A/B Disclaimer trust has limited use for federal estate exemption purposes. However, because the trusts are irrevocable, they can still provide desired protection from creditors. The A/B Disclaimer Trust in particular may still be a useful planning instrument in the following circumstances:

  • With an A/B Disclaimer trust, the surviving spouse allows the surviving spouse the ability to determine how much property, if any, is funded in the irrevocable bypass trust, and complete authority to amend the revocable Survivor’s Trust.
  • For estates under the estate tax exemption amount, the A/B Disclaimer Trust can be tax beneficial because of two basis adjustments in the estate property. Also, the estate tax can be deferred on the first spouse’s death and the deceased spouse’s estate tax credit is transferred to the surviving spouse electing portability.
  • For estates above the exemption, the A/B Disclaimer Trust provides the surviving spouse the option to change who are the ultimate beneficiaries of the trust.

The Special Needs Trust

Special Needs Trusts are trusts that are used to benefit individuals receiving Medicaid for long term care. A properly implemented Special Needs Trust prevents the beneficiary of the trust from being disqualified from Medicaid for having too many assets and is also used to allow individuals to qualify for Supplemental Security Income (SSI).

The idea behind the Special Needs Trust is to provide certain supports to a disabled beneficiary, and are expressly permitted by state and federal laws to prevent the beneficiary from being disqualified or penalized for having too many assets, so long as the funds for the supplemental supports are held in the Special Needs Trust and the rules for setting up and maintaining the trust are followed. These rules can be complex and require a trustee who is properly educated in order to maintain the benefits of the trust and avoid running afoul of the law.

The funds in a special needs trust can be used to provide certain amenities to the disabled beneficiary, which is why these trusts are sometimes called supplemental needs trusts. Special purpose trusts are explicitly designed by state and federal statutes so that the beneficiary won’t be disqualified or penalized by transferring assets into the trusts, so long as the requirements for establishing and using the trusts are strictly followed. (Note that the transfer penalties don’t cause a period of ineligibility for Medicaid-paid home care, but only to nursing and assisted living facilities.)

SONA LEGAL APC assists clients with two types of Special Needs Trusts:

  • First Party Special Needs Trusts
  • Third-Party Special Needs Trust