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How to Preserve Your Wealth for Generations in California

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With proper estate and legacy planning, wealthy families have a better chance of success in passing on their fortune to their family, from one generation to the next. Learn more about legacy wealth planning in this presentation.

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How to Preserve Your Wealth for Generations in California

  1. 1. HOW TO PRESERVE YOUR WEALTH FOR GENERATIONS IN CALIFORNIA Scott P. Schomer Los Angeles Estate Planning and Elder Law Attorney
  2. 2. How to Preserve Your Wealth for Generations in California www.schomerlawgroup.com 2 How many of the country’s wealthiest families are second and third generation millionaires or billionaires? According to some reports, two-thirds are first generation, only 20% are second generation, and less than 10% are third generation. What does this mean? It seems that most wealthy families have not quite mastered the art of preserving their wealth for generations to come. However, even those with more modest wealth can benefit from useful strategies to make their fortune go further. With proper estate and legacy planning, wealthy families have a better chance of success in passing on their fortune to their family, from one generation to the next.
  3. 3. How to Preserve Your Wealth for Generations in California www.schomerlawgroup.com 3 WHAT IS LEGACY WEALTH PLANNING? Legacy Wealth Planning is a way to help preserve your financial wealth using estate planning tools such as wills, powers of attorney, living trusts, and living wills. A comprehensive estate plan should establish who will manage your assets in the event you become incapacitated. Most estate plans include a durable power of attorney and a will. However, there are several other legal instruments that can be used to provide for your heirs after your death. A legacy wealth planning attorney is equipped to help you create the comprehensive plan that will benefit your family.
  4. 4. How to Preserve Your Wealth for Generations in California www.schomerlawgroup.com 4 FAMILY WEALTH TRUSTS A trust is a great way to protect assets from estate taxes, capital gains taxes, and the expense of probate. Trusts can also be a much-needed defense against the less financially prudent members of your family, which can go a long way toward protecting wealth from one generation to the next. Trusts can also assure that your values and wishes are carried out down through the generations. Generally, when a family wealth trust is created, it is specified as an irrevocable legal instrument, and cannot be altered once it has been created. When the grantor’s assets are transferred to that trust, they are permanently removed from the grantor’s estate, and not be subject to estate taxes.
  5. 5. How to Preserve Your Wealth for Generations in California www.schomerlawgroup.com 5 GENERATION SKIPPING TRUSTS Another type of trust is a “generation skipping trust,” which allows you to retain your generation skipping tax exemption on gifts to your grandchildren. This year, the generation skipping tax exemption is $5.34 million – the same as the federal estate tax exclusion. For those who want to leave money specifically to their grandchildren, a generation skipping trust is a great estate planning tool. You can transfer$100,000, for example, to a generation skipping trust and let it accumulate for several years. The amount can be significantly increased by the time the assets are distributed to your beneficiaries. REDUCE TAXES, HOWEVER POSSIBLE Proper tax planning, including generation-skipping taxes, gift tax exemptions, and dynasty trusts are crucial. This year, you are allowed to give a gift of up to $5.34 million in assets before your estate will incur taxes. This is known as a
  6. 6. How to Preserve Your Wealth for Generations in California www.schomerlawgroup.com 6 personal estate tax exemption. If your total assets exceed that sum, you will need a legacy plan in place, which takes into consideration your estate tax liability. An experienced estate planning attorney is prepared to take the steps you need to reduce the impact of estate taxes. Married couples are entitled to a marital deduction, which allows them to transfer property to one another, either during their lives or at their death, without paying any federal estate or gift taxes on that amount. When the spouse giving the gift dies, the value of the property passing to the surviving spouse is deducted from the gross estate of the spouse who is deceased. The exempt amount is unlimited. CHARITABLE DONATIONS Charitable donations are not only a worthwhile investment, but they also provide a nice tax advantage. To encourage people to be philanthropic, the federal government has created tax deductions for donations to qualified charities. This tax benefit can be included in your legacy wealth planning.
  7. 7. How to Preserve Your Wealth for Generations in California www.schomerlawgroup.com 7 TEACH YOUR CHILDREN TO TEACH THEIR CHILDREN The benefit of passing on your wealth management wisdom cannot be overstated. Despite your best efforts, bad investment decisions or poor budgeting can lead to the financial downfall of your family. Their education should focus not just on investment methods, but also budgeting and responsible spending. Instill the notion that each generation is responsible for those who come after them. Encourage your children to consider themselves managers of the family wealth. Even if you have no desire to create a financial dynasty, simply giving your children and grandchildren the freedom of not having to worry about paying the rent is worth careful planning. If you have questions regarding legacy wealth planning, or any other estate planning needs, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.
  8. 8. How to Preserve Your Wealth for Generations in California www.schomerlawgroup.com 8 About the Author Scott P. Schomer is a graduate of Boston University School of Law and is a frequent lecturer on estate planning and elder law issues, having appeared on local and national television discussing the importance of estate planning. Scott has an extensive litigation background and has over the years obtained in excess of twenty five million dollars in judgments and verdicts for his clients. Scott is a member of the Probate Volunteer Panel and has been appointed by the Los Angeles Superior Court to represent numerous parties in contested proceedings in the probate court. Scott has also served as Judge Pro Tempore of the Los Angeles Municipal Court and also been appointed by the court as an expert in probate matters. Because of his extensive experience, Scott brings a unique perspective to helping protect his clients. SCHOMER LAW GROUP Schomer Law Group is a professional law corporation that specializes in elder law, probate, wills, trusts and conservatorships. We counsel clients on the unique legal issues relating to advancing age. Whenever possible, we prefer to help clients plan for the future, avoid probate, minimize taxes and solidify their legacy. We also help clients plan for possible incapacity and long-term care. We help our clients deal with issues of aging with independence and dignity. In addition to estate planning, our firm has considerable experience helping victims of elder abuse. Our firm has aggressively pursued remedies and recovered assets belonging to our elderly clients where unscrupulous individuals have taken advantage of the elderly because of diminished capacity or other impairments. 8740 South Sepulveda Blvd, Ste 107 Los Angeles, CA 90045 Phone: (310) 337-7696 Website: www.schomerlawgroup.com
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With proper estate and legacy planning, wealthy families have a better chance of success in passing on their fortune to their family, from one generation to the next. Learn more about legacy wealth planning in this presentation.

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