Trust and Estate Planning: Tax, Valuation l Bennett Thrasher Skip to main content

Trust and estate planning is an intricate process that involves careful consideration of legal, financial, and personal factors to ensure the seamless transfer of assets and properties to your beneficiaries while minimizing tax liabilities across years and generations. This type of planning is essential to secure your financial legacy, protect your loved ones’ future, and contribute to your philanthropic goals. Two key aspects of successful trust and estate planning is generational tax planning and asset valuation. In this article, we will delve into the intricacies of trust and estate planning, discuss critical factors to consider, and highlight the pivotal roles that tax planning and valuation play in shaping the outcomes of these endeavors.

Understanding Trust and Estate Planning

Trust and estate planning is comprised of several proactive measures individuals take to organize and control the distribution of their assets, properties, and financial resources according to their wishes. While trust planning mainly focuses on creating legal entities to hold and manage assets for the benefit of specific individuals or causes, estate planning involves the distribution of assets upon one’s passing. Both processes aim to ensure that your financial legacy is preserved and that your loved ones are well-provided for. Let’s delve into the core components of trust and estate planning:

  • Trust Planning: Trusts are legal entities that enable you to transfer ownership of assets to a trustee who manages and distributes them according to your instructions. Trust planning allows for greater control over asset distribution, bypassing probate, and can offer tax advantages. Trusts can be revocable (modifiable during your lifetime) or irrevocable (unchangeable once established).
  • Estate Planning: Estate planning encompasses a comprehensive approach to managing your assets, addressing financial obligations, and ensuring the well-being of your beneficiaries after your death. The central elements of estate planning include drafting a will, designating beneficiaries for various accounts, creating living wills or advanced healthcare directives, and minimizing estate taxes.

Factors to Consider in Trust and Estate Planning

Effective trust and estate planning require meticulous attention to detail and a clear understanding of your unique circumstances. By considering the following factors, you can develop a robust plan that aligns with your goals:

  • Family Dynamics: Understanding family dynamics is crucial to ensure that your wishes are respected and to prevent potential conflicts among beneficiaries. Communication about your intentions can help manage expectations and reduce the likelihood of disputes.
  • Asset Types and Ownership: Identify the types of assets you own, including real estate, financial accounts, businesses, and personal property. Consider how these assets are owned and titled, as this influences distribution strategies.
  • Beneficiary Designations: Review and update beneficiary designations on retirement accounts, life insurance policies, and other financial assets to ensure they reflect your current intentions.
  • Guardianship for Minor Children: Appointing a guardian for minor children is vital to ensure their proper care and upbringing if you and your spouse pass away unexpectedly.
  • Philanthropic Goals: Incorporate any charitable objectives into your planning, whether through direct donations or establishing charitable trusts.
  • Tax Planning: Tax planning involves strategies to minimize estate and gift taxes as well as minimizing overall income tax among generations. Utilize tools like gifting, charitable giving, and establishing irrevocable life insurance trusts to reduce your tax liabilities.

The Role of Tax Planning and Valuation in Trust and Estate Planning

Tax planning and asset valuation are indispensable components of successful trust and estate planning. They play integral roles in shaping the outcomes of these endeavors:

  • Tax Planning: Tax planning involves strategies aimed at reducing estate and gift taxes, thereby preserving a greater portion of your estate for your beneficiaries. Techniques include:
    • Gifting: Transferring assets during your lifetime to beneficiaries or trusts to reduce the size of your taxable estate and/or minimize the tax your heirs may pay on inherited assets if they sell them.
    • Annual Exclusion Gifts: Gifting up to a certain amount per recipient each year without triggering gift taxes.
    • Irrevocable Life Insurance Trusts: Placing life insurance policies within an irrevocable trust to exclude the death benefit from your taxable estate.
    • Multi-Generational Trust: Placing assets in a trust that produces income for beneficiaries in successive generations, for up to 18 generations in some states
  • Asset Valuation: Asset valuation is the foundation on which informed decisions are made during the planning process:
    • Fair Distribution: Valuation provides the necessary information to distribute assets equitably among beneficiaries, preventing disputes and promoting family harmony.
    • Tax Calculations: Supportable valuations are crucial for calculating estate and gift taxes and the value of assets gifted to charity, enabling successful tax planning.
    • Business Succession Planning: Valuation is vital when passing down ownership of family businesses to the next generation, determining a fair value for equitable distribution among heirs.
    • Trust Funding: Valuation is necessary when funding trusts to ensure they fulfill their intended purposes.
    • Estate Inventory: Valuation provides an inventory of your estate’s assets, aiding in proper management and distribution.


Trust and estate planning are essential endeavors that empower you to shape your financial legacy, provide for your loved ones, and contribute to the causes you care about. Through consideration of various factors such as family dynamics, asset types, and philanthropic goals, you can develop a comprehensive plan that aligns with your wishes. Tax planning and asset valuation are integral to this process, ensuring that you can minimize tax liabilities, distribute assets fairly, and create a secure future for your beneficiaries.

As estate laws and tax regulations can be complex and subject to change, seeking professional guidance from estate planners, financial advisors, and valuation experts is necessary to navigate these matters effectively. By crafting a well-thought-out plan that combines strategic tax planning and valuation, you can leave a lasting legacy that reflects your values and provides for generations to come.

Working With Trust & Estate Planning and Valuation Experts

Bennett Thrasher’s Trust & Estate Planning and Valuation experts can help you navigate the intricacies of tax planning and asset valuations. To learn more, contact Bridget Dunk, Gina Miller or Brett Dixon by calling 770.396.2200.