THE BERNARDS-RIDGE CONNECTION PAGE 16 APRIL/MAY 2026 theconnectionsnj.com The donor spouse cannot reclaim the assets once transferred to the trust. That trade-off can be part of the strategy, especially when anticipating tax law changes. Each spouse can create a SLAT for the other but be careful to avoid the so-called “Reciprocal Trust Doctrine,” which if successfully advanced by the IRS, could render the trusts ineffective. If you are in need of assistance with these or other estate planning and wealth administration topics, please do not hesitate to contact our law office for immediate assistance at info@norris-law.com or 908-722-0700. This article is not intended, and should not be taken, as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only and you are urged to consult a lawyer concerning your own situation with any specific legal questions you may have. omplex financial lives require complex planning. High-net-worth individuals and families often find that basic wills and beneficiary designations fall short of assuring tax efficiency, asset protection, and multi-generational wealth transfer. Concerns about avoiding unnecessary estate taxes, protecting assets for children, and seeking structures beyond a simple trust often point to the need to explore more advanced planning strategies. FAQ #1: How does a Dynasty Trust work? A Dynasty Trust is designed to hold wealth and pass it across multiple generations while minimizing transfer taxes. Instead of passing outright to heirs, assets remain in a trust that can benefit children, grandchildren, and beyond. Owned by the trust rather than any individual, assets may also receive a layer of protection from creditors or certain legal claims, such as divorce proceedings. Typically irrevocable, these trusts require their own tax identification number and filings. They can be managed by a family member, a professional trustee or bank, or a combination of both, if the donor believes the beneficiary may not handle the money appropriately. Federal estate and gift tax exemptions are currently historically high (up to $15 million per person). In some states the length of trusts is limited; in others, they Complex financial lives require complex planning. can continue for generations. In New Jersey, dynasty trusts (always irrevocable and perpetual) can last indefinitely. FAQ #2: How do a Charitable Lead Trust and a Charitable Remainder Trust differ? Both structures combine philanthropic goals with financial planning, but reverse who benefits first. • Charitable Remainder Trust (CRT): The individual or family receives an annual payment from the trust for a defined period; the remaining assets go to charity at the end of the period. • Charitable Lead Trust (CLT): The charity receives income for a set term; the remaining assets pass to heirs or other beneficiaries. With this timing difference, tax treatment and planning uses vary. CRTs can combine income tax deferral with philanthropic goals; CLTs can accomplish wealth-transfer strategies and accelerate large income tax charitable deductions. FAQ #3: How does a SLAT work? A Spousal Lifetime Access Trust (SLAT) is an irrevocable trust created by one spouse to benefit the other. Assets transferred into SLAT are generally from the donor spouse’s taxable estate, plus future appreciation. During the beneficiary spouse’s lifetime, distributions may be made to that spouse and other beneficiaries, typically descendants, indirectly supporting the household. Afterward, remaining assets can be passed on to children or other chosen beneficiaries. ESTATEPLANNING Beyond Basic Estate Planning: 3 Advanced Trust Strategies High-Net-Worth Families Should Know By James J. Costello Jr., Esq. C
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