Estate & Trust Planning

An estate is the total value of everything you own when you die, handled through probate if there's no trust. A trust is a legal entity you create now that owns assets during your life and transfers them at death without probate. A trust costs more upfront ($2,000 to $5,000 in attorney fees) but saves money and privacy later. For clients in Florida with homes worth $500,000+, a trust is nearly always worthwhile. An estate plan includes a will, trust, power of attorney, and healthcare directive. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

Florida homestead protections are strong: a primary residence is shielded from creditors and some taxes. But a trust still makes sense because: it avoids probate (which is public and costs 3 to 7% of the estate), it avoids ancillary probate if you own out-of-state property, and it lets you plan for incapacity. Many Naples retirees skip probate by owning their home in a trust. A trust also handles non-homestead property and business interests that homestead doesn't cover. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

For 2025, you can gift $19,000 per person per year without using lifetime exemption or filing a gift tax return. Married couples can jointly gift $38,000 per recipient. Unused exclusions don't roll over. This is a simple annual strategy for wealthy clients: each year, gift $19,000 to kids, grandkids, or others to reduce the taxable estate. Over 10 years, a married couple can move $380,000 per child outside the estate tax system. We use this for clients with estates exceeding $15 million. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

When you inherit an asset, your cost basis 'steps up' to its value on the death date. If your parent bought Apple stock for $1,000 and it's worth $50,000 when they die, your basis becomes $50,000. If you sell immediately, you owe no capital gains tax. This is huge for real estate and stock. However, if your parent gave you the asset during life, your basis stays at their $1,000. For estates under the federal exemption, the step-up at death is often worth more than a lifetime gift strategy. High-net-worth clients in California especially benefit from this. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

Form 1041 is the tax return for estates and trusts. If a trust has income (from interest, dividends, or rental property) exceeding roughly $600, it must file 1041 unless it's a grantor trust (where the grantor reports income). Most revocable living trusts don't file 1041 during the grantor's life because income flows to their personal return. After death, the estate or trust may file 1041 if there's income. This is a common surprise for heirs: they inherit a trust that now has tax filing obligations. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

California has no state estate tax, but inherited real estate is subject to property tax reassessment unless it qualifies for a parent-to-child exemption (limited to $1 million per property unless you use planning). Long-term inherited assets get a step-up in basis (no federal capital gains tax), but local property taxes can spike on reassessment. We work with estate attorneys to document values at death and preserve step-up treatment. Many California clients are surprised by post-inheritance property tax bills. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

A QDRO is a Qualified Domestic Relations Order: a court order that divides retirement accounts (401k, IRA) in divorce without triggering immediate income tax. Without a QDRO, transfers between spouses are taxable events. A QDRO lets one spouse receive their share penalty-free. The QDRO must be prepared carefully and approved by the plan administrator. We coordinate with your divorce attorney to ensure QDROs are properly drafted and filed. This protects both parties from surprise tax bills. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

Texas is a community property state: assets acquired during marriage (except gifts or inheritance) are owned 50/50 by both spouses. This simplifies trusts in some ways (no need to title assets carefully) but complicates planning in others. Each spouse should have a trust to handle separate property and direct the community portion. Texas trusts often use an 'A-B trust' or 'survivor's trust' structure. We coordinate with family attorneys in Dallas and Houston on community property implications. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

You die intestate. State law decides who gets your assets: typically spouse and children in a set order, then parents, then siblings. Your estate goes through probate, which takes 6 months to 2 years, costs 3 to 7% of the estate, and is public record. Your kids might have a court-appointed guardian if they're minors. Your digital assets and business interests get tangled up. A simple will costs $300 to $800 and prevents all this. A trust goes further and avoids probate entirely. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.

Succession requires: clear documentation of roles and decision rights, a tax-efficient transition structure (often using a trust or family LLC), valuation clarity, and contingency plans if the chosen heir can't run it. Many family businesses fail in the second generation due to unclear planning. We work with business attorneys to structure buy-sell agreements, document procedures, and estimate tax bills. Start planning at least 5 to 10 years before transition. Common mistakes are waiting too long and treating all kids equally financially regardless of involvement. Every client situation is different, so call (239) 441-2005 to review your specific facts before acting on this guidance.