King & Wood, P.A.

Keep Your Life Private with a Trust

“One of the major benefits of a living trust is that the trust assets bypass the probate process. In most states, this may mean savings in probate costs up to many thousands of dollars.”

Jacqueline Kennedy Onassis signed a will in March 1994 after receiving a cancer diagnosis and died two months later. Her will is readily available on the internet since it becomes a public document when submitted for probate, according to an article from the American Legion, “Living Trusts vs. Wills.”

She remembered family members and friends in the will and also planned to make a large transfer to a Charitable Lead Trust. However, things didn’t work out the way she wanted. Her two children received her personal property and quickly put the items up for sale, netting $35 million. The rest of the estate was needed to pay taxes, and the CLT was never funded.

Bing Crosby, an American singer and celebrity, had a trust created for his estate plan. When his first wife died in 1952, she had a will transferring her separate and community property, which became public because of the probate process. After marrying again, Crosby created several trusts for his children from his first marriage, his new wife and the children from his second marriage. He wanted his privacy back.

There are many reasons to have a will. The will is used to name an executor for your estate, a guardian for minor children and express wishes for asset distribution. A last will and testament is a good starting point for an estate plan. If you are young and don’t have a lot of assets, a will may be all you need to distribute assets and plan for your children’s future.

As one moves through life and acquires property and perhaps wealth, it may be time to consider the use of trusts. Some people find a living or revocable trust to be the right solution. It allows the person creating the trust, the grantor, to retain complete control over the trust. You can change the terms, add and subtract beneficiaries and make changes whenever you want.

A living trust names a successor trustee. If you become incapacitated, the successor trustee can step in and manage the property owned by the trust. They can use the funds in the trust to pay for Long-Term Care or medical expenses.

If you own property in more than one state, a trust is an excellent means of avoiding having to go through probate in each state. With a living trust, your estate won’t have to go through multiple probate processes.

The privacy a trust offers can reduce the risk of someone contesting the estate. When a document about your property becomes public, distant relatives, creditors and thieves can connect the dots of your wealth and target your estate via litigation or scams.

Talk to your estate planning attorney about whether a trust is right for you and your family. If you do go forward with a trust, remember that the final step is to fund the trust. Don’t leave this out, or your trust won’t perform as planned.

Reference: American Legion (Jan. 15, 2025) “Living Trusts vs. Wills”

How Professionals Use Estate Planning

“Estate planning is essential for professionals looking to secure their financial legacy and protect their assets.”

Estate planning encompasses many aspects of an individual’s life, including asset management, wealth transfer and tax planning. With the help of an experienced estate planning attorney, a secure financial future and protection for loved ones can be accomplished. A recent article from mondaq, “Estate Planning for Professionals” provides useful details.

Estate planning includes protecting personal assets from creditors. The tools most often used include trusts, retirement accounts and insurance. Which type of trust is needed depends upon each person’s circumstances and should be tailored to meet your needs. Available trusts include gift trusts, revocable trusts, marital trusts, trusts to benefit children and special needs trusts, to name a few. Trusts also transfer business assets out of direct ownership while minimizing estate taxes.

Retirement accounts, including IRAs, are considered savings vehicles but serve other purposes. Certain retirement accounts include ERISA spendthrift protections, which also allow unlimited accumulation free from creditor claims while protecting someone from taking too much out of their account. ERISA, a federal law, does not protect IRAs, so any protection for the IRA is state-specific. In some states, assets in IRA and Roth IRAs are protected from creditors in case of bankruptcy.

Business owners are often advised to use LLCs and corporations to protect assets from creditors. However, the entity used depends upon the nature of the business and the owner’s circumstances. Keeping business and personal assets separate is a foundation of estate planning, which should also incorporate retirement and succession planning.

Succession planning should be done as soon as a business reaches a certain level of stability and success. If family members are part of the business, assigning key roles, clarifying responsibilities and planning for how ownership will transfer when the founding owners decide to retire or if they die while still operating the business needs to be in place. How the business will be transferred, which can occur in many different ways, must be clarified.

Divorce is an unpleasant fact of life for many families. Protecting assets must be weighed along with maintaining relationships, particularly where children are involved. A pre-nuptial agreement for the professional or business owner should be part of planning for marriage. Drafting the document when the relationship is good can clarify issues and hopefully preclude some acrimony if the marriage doesn’t go well.

An estate plan requires time to prepare, as documents including a last will and testament, power of attorney, healthcare power of attorney, advanced directives and trusts all require careful drafting. Any estate plan must be reviewed every few years to ensure its efficacy.

Reference: mondaq (Oct. 18, 2024) “Estate Planning for Professionals”

What Happens When Executors Keep Beneficiaries in the Dark?

“Is it unusual that named beneficiaries would not be given copies of or, at the very least, be allowed to view the will?”

A couple who never had children created a will, leaving their six nieces and nephews equal shares of their estate upon their deaths. When the uncle died, the aunt remarried years later but never changed the will, except for giving her second husband a life tenancy in the family home. A recent article from Market Watch asks if what happened next is right: “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”

The problems began when the aunt’s attorney told the nieces and nephews that they were responsible for the taxes and property insurance while the life tenant lived in the home. The nieces and nephews had never seen a copy of the will, so they are unsure of their responsibilities as remaindermen. Nothing in the estate needed to go through probate, so the aunt’s will was not available to beneficiaries through the county court.

This case illustrates several important estate planning points. First, an executor of a will (or an administrator of an estate) is required to keep beneficiaries “reasonably informed” of the will’s contents after probate. It seems reasonable for the nieces and nephews to be able to see the will.

In most cases, the person given the life tenancy is responsible for paying taxes and property insurance and for the general upkeep of the residence. Any other arrangement is unusual, so the nieces and nephews are right to want to see the will.

The life tenant has rights, including the ability to rent out the property. However, they can’t do anything to decrease the house's value. It’s important to know that elderly people may be unable to apply for Medicaid because they live in the house this way.

If it has been months since the person died and there hasn’t been any communication from the executor, a few different scenarios are possible. It may be that the executor doesn’t know they are required to keep beneficiaries informed. However, it’s also possible that the executor is engaging in illegal behavior.

In most states, the executor is responsible for providing beneficiaries with a complete inventory and appraisal of all the estate's assets. Depending on the state, probating an estate may take more than six months, and creditors have a certain number of months to file a claim.

Suppose the beneficiaries wish to replace the executor. In that case, they can do so by speaking with an estate planning attorney and being prepared to go to court and prove the executor is either self-dealing, incompetent or has a conflict of interest.

However, once the will is probated, it will become part of the public record and must be filed in probate court. Depending on the jurisdiction, the court will give the beneficiaries the right to access the will.

The best option for the nieces and nephews is to consult an estate planning attorney to explore their options. If they live in a different state, a local estate planning attorney can recommend someone in their aunt’s jurisdiction to help.

Reference: Market Watch (April 28, 2024) “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”

Can You Completely Avoid Probate?

“Many people want to learn how to avoid probate so their heirs don’t have to cope with these legal proceedings during a stressful time of grief after a death.”

When you die, your estate will typically need to go to your heirs through the probate process, which can take several months, might be expensive and will be stressful for loved ones. The article “How To Avoid Probate In 2023” from Forbes applies to avoiding probate in any year and contains useful tips and recommendations.

Simplified Procedures in Some States. Estate law is state-specific, so in some states, there is a means of transferring wealth for a small estate. An estate planning attorney will know how your jurisdiction works. Eligibility varies based on the estate's total value, the types of assets transferred and who the heirs are. Just because the process is simplified doesn’t mean there won’t be some court involvement. The estate may be vulnerable to creditors, and estate taxes may be owed to the state, so you’ll still want to take steps to protect your estate.

Gifting Assets With Warm Hands. In 2024, you can gift up to $18,000 per person without triggering a gift tax. Married couples may gift a combined $36,000. Let’s say you and your spouse have two children. You may give $36,000 to each child, taking $72,000 out of your estate. This is used as a simple way to reduce a taxable estate. However, don’t gift without carefully analyzing what you and your spouse need to live on. You’ll also want to be sure that you have enough funds for emergencies.

Creating a Trust. Creating a trust is another way to take assets out of your taxable and probate estate. Money, investment accounts and even insurance policies can be moved into trusts. The trust is a legal entity, and once assets are transferred into the trust, they are owned by the trust and not by the person who established the trust. The language in the trust document outlines exactly how you want the assets to be distributed, and a trustee must be selected to manage the trust.

Many different types of trusts serve a variety of purposes. A revocable living trust allows the grantor to change or modify the trust whenever the grantor wants. Nevertheless, the high level of access and flexibility comes with a cost—the assets in the trust may be subject to creditor claims and estate taxes.  An irrevocable trust cannot be changed and provides better protection. Your estate planning attorney will know which type of trust best suits your needs. A trust may also be useful when planning for incapacity and qualifying for Medicaid for long-term care.

Joint Ownership. Owning property with another person can help transfer assets after death. However, some risks are involved. If you and the other person have a falling out or disagree over how the property should be managed, or one wants to sell and the other doesn’t, you could end up in court. In addition, if the other person is sued or goes through a divorce, you may find yourself owning assets with someone you didn’t plan on being in business with.

Pay-on-Death Accounts. Some, but not all, banks and financial institutions allow accounts to be set up to pay another person upon the death of the owner. If possible, you’ll need to list a beneficiary on the account, and the assets will transfer automatically to that person outside of probate. Make sure to update your beneficiary designations, so the correct person receives the assets upon your death. If you have multiple children and only one child’s name is listed as beneficiary, they have no legal obligation to share the assets with their siblings. Using Pay-On-Death accounts should be coordinated with the whole of your estate plan, if an equal distribution is your goal.

If a will is prepared improperly, your family could become embroiled in a court proceeding to settle the estate. The best way to avoid or minimize court involvement is to work with an experienced estate planning attorney who can create a plan addressing your unique situation and achieve your goals.

Reference: Forbes (Nov. 30, 2023) “How To Avoid Probate In 2023”

What Kind of Trust Works Best for Your Estate Plan?

“Trusts are common. However, there are numerous variations, and there is still considerable confusion about what is legal and what is not.”

There are two major categories of trusts, one in particular that everyone should have. Regardless of their financial status, most people could have an estate plan incorporating a trust to eliminate the need for a will to go through probate, according to a recent article from Forbes, “Which Trusts Save Taxes, Which Do Not, And Which Are Illegal?”

Probate is the process by which a court reviews a will, approves it as valid and approves the named executor. Depending upon your jurisdiction, probate can take a very long time and be quite costly. Documents going through probate also become part of the public record, and anyone can read them. However, there is a way to keep your wishes private and avoid the expense of probate.

A revocable trust can be created, directing the disposition of assets. You will still need a will, but the will states that everything you own goes into the revocable trust. This is known as a “pour-over-will” since it pours all assets into the trust.

The trust is private, is not separately taxable and you may change it at any time. You may wish to add or subtract beneficiaries over time to be sure that the people inheriting your property are the ones you want.

A revocable trust is also tax neutral. Let’s say you transfer your house or stock into a living trust. It’s not considered a transfer for tax purposes.

The other major type of trust is an irrevocable trust. Generally speaking, once created and funded, assets in the trust may not be taken out of the trust, and the trust may not be amended. It is separately taxable and must file its own tax return. Transfers to an irrevocable trust can lead to gift taxes. However, it is an excellent means of saving income, gift, or estate taxes in the long run, depending upon how the estate is structured.

Two other types of trusts are foreign and domestic trusts. Most living and irrevocable trusts are domestic, meaning U.S. law is applied. However, if the trust is foreign, many complex rules could make U.S. beneficiaries taxable on their share of the tax income, even if the trust income is never distributed to them. For most people, these are not a useful option.

Other trusts are designed to save on state taxes. Some California residents want to avoid paying California taxes without moving. The typical living trust won’t help since the grantor must include the income on their tax return. They seek to shield assets from California’s 13.3% tax rate via a “NING,” a Nevada Incomplete Gift Non-Grantor Trust. There is a similar trust in Delaware, “DING,” and one from Wyoming known as a “WING.”

These trusts can be tricky, so be sure to work with an experienced estate planning attorney who is familiar with these trusts and the intricate details. Some taxpayers have found themselves in court for pushing the trust envelope too far. A man from Estes Park, Colorado, and another from Frisco, Texas, along with others, were indicted for conspiring to defraud the United States and assisting in the preparation of false income tax returns for promoting and selling abusive trust tax shelters for clients nationwide for fees ranging from $25,000 to $50,000.

An ethical local estate planning attorney will not put their clients at risk with overly aggressive trusts but will instead craft an estate plan to achieve realistic goals of protecting assets, minimizing taxes and preparing the necessary documents to protect their clients.

Reference: Forbes (Nov. 24, 2023) “Which Trusts Save Taxes, Which Do Not, And Which Are Illegal?”

Are You Neglecting Your Estate Planning?

“Estate planning is a vital part of financial management that often gets overlooked.”

Estate planning is about more than ensuring that assets are distributed according to your own wishes after you die. It’s also about what you’d like to have happen to your assets and who you want to be in charge of your health care decisions if you become incapacitated. A recent article from Go Banking Rates, “8 Key Signs You’re Neglecting Essential Estate Planning,” outlines the top signs showing that you need to take care of this critical task.

You don’t have a will? This is the biggest red flag of estate planning mistakes. A will, or last will and testament, is a critical legal document specifying how you want your assets to be distributed after you die. If you don’t have a will, the laws of your state will determine how everything in your estate will be given to heirs. If you have estranged family members, they may end up owning everything. There won’t be anything your beloved family members can do about it. All state’s laws are different, so speak with a local estate planning attorney to address this critical document.

How outdated are your beneficiary designations? Many people open accounts as young adults and forget to update them as the decades pass. If you’ve been married, divorced, had children, experienced loss, or if your beneficiaries are no longer part of your life, you will want to update your beneficiary designations. Your assets could very easily go to people like an ex-spouse or a former friend. Beneficiary information should be updated every few years to be sure that your current wishes are followed.

Do you have a Power of Attorney? Everyone of legal age should have a Power of Attorney. A Power of Attorney is a legal document giving a person of your choice the legal power to make decisions on your behalf if you cannot do so because of illness or an injury. Without a POA, your family will need to go to court to apply for guardianship to take care of various duties, like paying bills, managing investments, or maintaining your home.

Do you have an inventory of digital assets? If you pay bills online, are active on social media accounts, or own any digital assets like cryptocurrency, you need a plan for digital assets. Start by making a complete inventory of your accounts—you’ll be surprised at how much of your life is lived online. Some platforms have an option for naming a “legacy” contact—someone who can access your data and manage it after you pass. Your digital executor will also need usernames and passwords. Otherwise, they won’t be able to access your accounts.

Have you planned for taxes? Estate planning includes understanding the tax implications of assets. There may be estate taxes or state estate taxes due from your estate, and failing to plan could leave heirs with a smaller or no inheritance.

Do you need a trust? Trusts are valuable tools for addressing specific needs, from caring for a disabled family member to managing minor children's assets. Without trusts, these individuals could face unexpected complications that could otherwise be avoided.

If you own a business, do you have a succession plan? Business owners need a succession plan to protect their work and family. Planning for a smooth transition includes naming key employees, creating partnership or shareholder agreements and determining if the business can continue to operate and provide income to family members, including the retiring owner.

What about end-of-life care plans? Estate planning includes end-of-life care, including a living will or healthcare directives. Your family will be less stressed if you have documented your wishes for what kind of health care you want or don’t want if you become incapacitated.

Reference: Go Banking Rates (Nov. 25, 2023) “8 Key Signs You’re Neglecting Essential Estate Planning”

When Should You Update Your Estate Plan?

“From the birth of a child to a newfound charitable drive, these are the instances in which an alteration to your estate plan is critical.”

We know we need to see our doctor for annual checkups and see the dentist every six months, not to mention getting a good night’s sleep, brushing and flossing our teeth. In the same way, your estate plan needs regular maintenance, according to an article from The Street, which asks, “When Is It Time to Update Your Estate Plan?”

Far too often, estate plans are created with the best intentions and then lie dormant, in many cases, for decades. Provisions no longer make sense, or people in key roles, like executors, either move away or die.

Failing to update an estate plan can lead to a beloved child being disinherited or an animal companion ending up in a shelter.

This is an easy problem to solve. However, it requires taking action. Scanning your estate plan once a year won’t take long. However, when certain events occur, it’s time to bring all your estate planning documents to an estate planning attorney’s office.

Here are a few trigger events when you may want to make changes:

Welcoming a new child into the family. Wills and trusts often contemplate future children. However, when the children arrive, you’ll need to update wills, trusts and beneficiary designations. Life insurance policies, investment accounts and retirement accounts allow you to name a beneficiary, and the proceeds from these accounts go directly to the beneficiaries, bypassing probate.

If no beneficiary is named or cannot be located, the asset usually goes back into the estate, meaning it goes through probate and there may be tax liabilities.

Charitable giving goals often change over time. An organization with great personal meaning in your twenties may be less important or may have closed. If you’ve become involved with a charitable mission and want to leave assets to the organization, you’ll want to create a charitable bequest in your will or trust. Those changes need to be reflected in your estate plan.

People’s ability to serve in fiduciary roles may have changed. If the people you assigned certain roles to—like trustees, executors, agents, or the guardian named for minor children—may no longer be suitable for the role. The person you selected to serve as a guardian for minor children may not be available or willing to manage adolescents. If your trustees are over 70, you may want to name an adult child to serve in this role.

Reviewing insurance policies needs to be done regularly. In some cases, the value of life insurance proceeds may be subject to estate tax. Proper planning should be able to avoid this by making certain the policy is not included in your taxable estate.

If you are considering taking out a new life insurance policy, revisit your existing plans with your estate planning attorney. It may make sense for you to create an insurance trust, which allows you to exempt certain assets from your taxable estate.

Are pets an important part of your life? If so, you may want to make plans for who should take care of your pet if you pass away. In many cases, a pet trust works to name a trustee to manage funds for the pet’s care and formally outlines how you want your pet to be cared for.

Reviewing your estate plan every three to five years with your estate planning attorney or whenever a significant life event occurs will ensure that your wishes are followed.

Reference: The Street (Oct. 30, 2023) “When Is It Time to Update Your Estate Plan?”

Do You Need a Will or Trusts or Both?

“A traditional will could be the simplest but not necessarily the best way to pass on your legacy.”

A comprehensive estate plan is the best way to protect yourself during your lifetime and your family after you’ve passed. For many people, it’s tempting to think a simple will is all they need, as reported in a recent article, “Is a Will Really the Best Way to Pass an Inheritance to Your Family?” from The Motley Fool. This might be true if your estate is relatively small. However, there are good reasons to consider using a trust or other estate planning strategies.

A last will and testament is a binding document to allocate assets after death, assign guardianship for minor children, name an executor to manage your estate and convey other last wishes.

However, there are other considerations to an estate plan, including taxes, special needs of heirs and how quickly you want assets and property to be transferred. Your estate planning attorney can discuss how best to accomplish your goals once they are articulated.

One of the challenges of having only a will is probate. This court process authenticates a will and gives the named executor the power to manage the estate and eventually distribute assets. Probate can be a long, costly and public process when assets are unavailable to heirs.

In some jurisdictions, probate is a matter of months. In others, it can be years before probate is completed if the estate is complicated.

Most people don’t know this, but wills in probate become part of the public record. Anyone can see everything in your will, including who you leave property to and how much they receive.

An alternative is the living trust. This document establishes a legal entity to hold assets during your lifetime. The trustee can be yourself and a secondary trustee. The trustee administers the trust according to your wishes, which are established in the language of the trust.

Depending upon your state, your estate planning attorney can put a provision moving assets into the trust after your death, in case any asset is accidentally forgotten and not moved into the trust.

Living trusts are also revocable, meaning they can be amended or revoked at any point during your lifetime. This provides a great deal of flexibility.

Joint ownership is another option used mainly by married spouses. Joint Tenancy with Right of Survivorship (JTWRS) is a popular way to own property. Assets owned jointly transfer directly to the surviving spouse (or joint owner) without the need for probate.

Just as everyone’s life is different, everyone’s estate plan is different. State law varies, and the size and complexity of your estate will influence how your estate plan is structured. Your best bet might be a mixture of wills, trusts and joint ownership arrangements. An experienced estate planning attorney can create a comprehensive estate plan to suit your and your family’s needs.

Reference: The Motley Fool (September 4, 2023) “Is a Will Really the Best Way to Pass an Inheritance to Your Family?”

How Estate Planning Works with Exit Planning

“Estate planning alone isn’t enough protection for business owners, who need to also consider succession plans, as well as financial, legal and operational issues.”

A professionally created and well-executed estate plan is a must for protecting families and assets, minimizing tax liabilities and addressing personal and financial matters, says a recent article from Kiplinger, “For Business Owners, Estate and Exit Planning Join Forces.” Business owners also need to have an exit plan to be sure that their business and personal affairs will be managed according to their wishes.

Estate planning is critical because business owners are relied upon by their families and employees, customers, vendors, and the communities they serve.

Planning for the smooth transfer of ownership and management upon their retirement or death is vital for the owner, their family and all those impacted. This involves identifying and preparing successors, establishing a clear succession plan, and addressing leadership, ownership and management continuity.

Who will take over the business, how will it be valued and how can the transfer of ownership be handled to minimize tax implications and disputes among heirs? If heirs work in the business, will their roles be transitioned, and how will that happen?

Unlike personal estate planning, business owners must have their company valued by a professional, as this information will be needed to determine estate tax liabilities, equitable distribution and protect the financial well-being of surviving family members. Valuation methods include assessing the fair market value of the business, considering future earning positions, and factoring in relevant sector standards.

Estate planning for business owners also involves specific tax considerations, including minimizing estate taxes, gift taxes and capital gains taxes associated with transferring business assets. Some strategies include establishing trusts, gifting shares over time, or utilizing tax-efficient entities, such as Family Limited Partnerships (FLPs) or Grantor Retained Annuity Trusts (GRATs). An estate planning attorney will know the most appropriate strategy for each situation.

Business owners also have a vested interest in ensuring the continuity of their business. Estate planning may involve creating a continuity plan outlining how the business will be managed, who will have decision-making authority and how key roles and responsibilities will be fulfilled.

For business owners with partners or co-owners, implementing buy-sell agreements is crucial. These agreements establish the terms and conditions under which ownership interests can be transferred or sold in the event of a triggering event, such as disability, retirement, or death. A buy-sell agreement ensures a smooth ownership transition and prevents disputes among remaining owners. This should be in place long before it’s needed.

Business owners must work with trusted professionals, including estate planning attorneys, tax advisors and business valuation experts, to effectively navigate the complexities of estate and exit planning.

Reference: Kiplinger (June 7, 2023) “For Business Owners, Estate and Exit Planning Join Forces”

Should You Give Your Children an Inheritance Now?

“Retirees should secure themselves first, and if you’re all set there, then consider a few other things, such as the impact on the children and tax issues.”

The first question to ask before considering making gifts to heirs is similar to the advice heard on airplanes—“Make sure to secure your own oxygen mask before helping your kids.” But, first, make sure you secure yourself, advises a recent article titled “Leaving an Inheritance? Is It Better to Give to Kids Now or Later?” from Kiplinger.

The biggest unknown is long-term care expenses. Assuming you’ve done the correct planning for this, possibly with a Medicare Asset Protection Trust or another trust, and there are enough assets for your retirement, consider the impact of an early inheritance on your children.

Money can be a lifesaver or a murky bog, depending on the amount and the recipient. Consider what your children have done in the past with finances. If they received a gift in the past, did they use it to cover expenses, invest it, or show up at the next family gathering in a flashy luxury car? Reconsider an early inheritance, if a generous gift went to a $15,000 handbag.

The beneficiary of the funds often matters more than the amount or the type of gift. This is one reason trusts are popular estate planning tools. Trusts allow you to exercise a great deal of control over how and when the beneficiary spends their new money.

You should also consider the age and stage of the child you’re considering making a gift to. Let’s say you’re 65, and your children were born when you were 30. Your life expectancy is 85. The decision is about whether or not to give the children money in the next 20 years or at the end of 20 years. In 20 years, your children will be 55 and likely in their peak earning years. Your grandchildren will be graduating from college. Your children will be in a period where the gap between their earnings and expenses is the largest—in other words; it’s not a time when they’ll necessarily need the money.

The time they may need the money more is when their children are young. Childcare costs, or having only one spouse earning income, could be when your gift is most beneficial.

Taxes need to be considered as well. Because of the current large gift tax exemption, most of us don’t have to worry about gifting unless our estate is more than $12 million. However, capital gains, and income taxes need to be considered.

Some families prefer to leave stock to their children. You’ll likely pay 15% in capital gains taxes, if you sell stock. There's no tax if someone in the lowest two income brackets sells the stock. If you leave a stock at death in a non-retirement account, there is a step-up in basis—your child won’t pay taxes on the gains accumulated in your lifetime.

There are many different ways to approach this. However, the first step should be a talk with your estate planning attorney, who can help you determine when and how to distribute your wealth.

Reference: Kiplinger (March 7, 2023) “Leaving an Inheritance? Is It Better to Give to Kids Now or Later?”