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Special Beneficiaries Income Plan

Asset Transfer - Non-Tax Burden - Gifting Legacy - Keep Estate Planning Private


Simplifies Directing Assets From Will Transfers

Minimize & Prevent Family Conflict

Save Tax- Avoid probate


By the end of 2019, over $15 trillion worth of inheritance will pass through the probate courts in America.

The #1 asset sold first is the real estate. 

We inform and can assist for efficient economical transfer of asset ownership.


LegacyChange can be as an Economical Simple Incentive Trust

It is your prerogative and right to control your Legacy and gifts as you prefer.

A LegacyChange Plan can bypass probate process time and expense

LegacyPlan Transaction Worksheet for Illustration (pdf)


There are Trusts that are designed to reduce income taxes and those used to reduce estate and probate taxes. Then there are Trusts with no tax advantages at all that are used to transfer control over property to another person. Then there are Land Trusts which act differently from all others.


Irrevocable Pure Grantor Trust

The Asset-Protection Trust You’ve Never Heard Of

What if  there was a fairly easy, legal way to protect your assets from lawsuits, nursing homes, creditors and divorce, while still having 100% access to all the income from those assets? Or, in the case of a home, still being able to live in the home? And, after a short period of time, your assets would become invisible to Medicaid and nursing homes. Sounds too good to be true, doesn’t it?
There is such a such a way, and it’s done using an irrevocable pure grantor trust.


The irrevocable pure grantor trust is different, but as a revocable living trust, you are the creator (grantor) and the person in control of the property (trustee). But you’re a lifetime beneficiary as to income only or living in a trust property. Other people you name – usually your children – are the lifetime beneficiaries of the assets, and they are usually also the death beneficiaries. Anything you transfer into an irrevocable pure grantor trust is immediately protected from creditors and predators.
Yes, it’s irrevocable – you can’t make changes to the trust document later on, but someone else you’ve named can. And you can’t take the assets out of the trust and give them back to you without jumping through some pretty serious hoops – but someone else you’ve named can. You can buy, sell, and trade the assets that are in the trust, just as you do now. If the trust is drafted properly, you can take income from the assets (investments, rental properties, businesses) and live in the home (and it would still qualify for the homestead property tax exemptions). And, if your children take any assets out of the trust, they can use them for any purpose – even for your benefit.
If you stay healthy for at least five years, the assets in the trust become invisible to Medicaid; if you need long-term care before that time, there’s a penalty period, but your children can use some of the assets to pay your expenses until Medicaid becomes available – still saving the bulk of your assets.
Because it’s a grantor trust, the income will flow through to your Social Security number and tax return just as it does now – no additional tax identification number or tax return is required. And, like assets held in a revocable living trust, any assets held in an irrevocable pure grantor trust at your death are included in your estate, so your beneficiaries will get the benefit of a stepped-up cost basis.
This is important to remember: Whatever you can get to, so can all one's creditors and predators. One must give up only that which one wishes to protect.
An irrevocable pure grantor trust is just part of a comprehensive estate and asset protection plan. You don’t have to be rich to use this tool – you just need to have some assets you’re not using to live on and want to protect for a spouse or children – it might be $100,000 or $1,000,000. Generally, an irrevocable pure grantor trust is used in addition to - not instead of - a revocable living trust.
If you’d like to learn more about irrevocable pure grantor trusts and see whether they’re suitable for your situation, please contact us.



What Is the LegacyChange Incentive Plan verses the Incentive Trust?


Incentive Trust

The incentive trust is a legal entity that holds and manages assets for the grantor or for the benefit of another person. It is typically established by a senior family member to provide innovative strategies for distributing wealth to younger generations; the grantor can use the incentive trust's provisions to reward a beneficiary for achieving a wide range of desired behaviors or goals. The trust can also set out specific requirements on how the money can be distributed and use certain techniques to ensure that the beneficiary will have financial independence beyond the inheritance monies.

As with any type of trust, there are costs associated with the development and ongoing administration of an incentive trust. The costs and the time involved in establishing this trust are just two factors you'll need to consider when deciding whether or not this arrangement is right for you. Next, you'll need to mull over some of the unique advantages and drawbacks of the incentive trust.

The Pros
Motivating Positive Behavior - An incentive trust allows you to reward the beneficiary for desired behaviors, while limiting access for undesirable behavior such as unproductive or immoral activity (of course, defining what is "immoral" can be quite subjective). Many trusts can be as restrictive as the grantor wants them to be, as long as the restrictions imposed are not illegal - for example, specifying that the beneficiary must divorce his/her current spouse to receive an inheritance.

Age Restrictions - Restrictions related to the beneficiary's age are often attached to trusts. You may not want your child to receive income or principal from the trust until he or she reaches a more mature age, such as 25, 30 or whatever you decide. You can also plan for distributions of funds to be staggered over time, at various "benchmark" ages, to help your child learn how to manage money responsibly. At the very least, this strategy eliminates the possibility of your child blowing his or her inheritance all at once.

Encouraging Education - Trust distributions can be contingent on the beneficiary graduating from high school, achieving certain grade point averages or obtaining a postsecondary degree. You could also decide to distribute a portion of funds after successful semesters or academic years as a positive motivating tool.

Promoting a Healthy Lifestyle - Some grantors will establish trusts that won't pay out money if the beneficiary indulges in destructive and/or illegal behavior such as smoking, using illegal drugs or abusing alcohol.

Family Business or Employment - Your incentive trust can include provisions that reward your beneficiary for assuming important responsibilities in a family business or simply maintaining gainful employment. As another way to promote employment, you can set up the incentive trust to pay out a matching amount for each dollar earned by the beneficiary. These are strategies that often appeal to wealthy parents, who may worry that their children lack a work ethic because they have grown up with money.

Endorsing Philanthropy - You can help your child develop an appreciation for volunteerism and community involvement by using matching charitable donations and other benefits that reward your child for teaching, doing community service and other charitable habits.

The Cons
Possible Resentment - You know the saying "The road to hell is paved with good intentions"? Despite your best intentions, your beneficiary may find that some of the requirements set out in the incentive trust (say, getting a college degree) are unattainable for him or her, and this may lead to resentment toward you as the grantor, or toward other beneficiaries who have met certain requirements contained in the trust.

Hindering Entrepreneurship - Using the incentive trust to encourage specific professional goals or to push your child into the family business may hinder your child's ability to pursue his or her own professional interests, such as starting a successful landscaping business or going into some other trade that you may have overlooked.

Setting Unrealistic Goals - Keep the goals and milestones realistic: some kids are not meant to run the family business or are not cut out for an Ivy-league school and a stellar academic career. Grantors should be sensitive to the unique personalities of beneficiaries and set goals that are attainable for all.

Overlooking Other Needs - Placing too much emphasis on business and academic achievements can lead to other matters, such as the health and overall personal well-being of the beneficiary, being overlooked.

"Controlling Life from the Grave" - The incentive trust may fail to work as the positive motivating tool you'd like it to be if the beneficiary feels that you are trying to control his or her life "from the grave", or to introduce values that should have been taught when the beneficiary was growing up.

Key Considerations
It is your prerogative and right to control your Legacy and gifts as you prefer. The LegacyChange Incentive Plan is a simple and economical path to control your gifting to your beneficiary.

The LegacyChange Incentive Plan is more simple than an Incentive Trust where your legacy is preserved by heirs receiving guaranteed payments with tax advantages over years of time verses a lump sum. Your legacy has control allowing for prudent heir spending.



Probate Process Timeline


Divorce Settlement


Selling Assets To Settle Divorce Action?


LegacyChange Plans can take the sting out of Ordinary Income Tax as for Annuity & Retirement Plans


LegacyChange Plans can also take the sting out of Gain & Recapture Tax as Stocks, Mutual Funds, & Businesses

Offset the tax consequences

Provide structured inheritance for client property division, heirs, beneficiaries

Guaranteed income stream  


Support client's favorite charity

Appropriate planning can make the difference when taxes are an issue. Talk to our LCP representative about how our programs can benefit your clients

We inform and can assist for efficient economical transfer of asset ownership.


Other Types of Trusts

A recent article from Kiplinger“Pre-Election Estate Planning Moves for High Net-Worth Families,” describes an extensive selection of trusts that can are used to protect wealth, and despite the title, not all of these trusts are just for the wealthy.

The time to make these changes is now, since there have been many instances where tax changes are made retroactively—something to keep in mind. The biggest opportunity is the ability to gift up to $11.58 million to another person free of transfer tax. However, there are many more.

Spousal Lifetime Access Trust (SLAT) The SLAT is an irrevocable trust created to benefit a spouse funded by a gift of assets, while the grantor-spouse is still living. The goal is to move assets out of the grantor spouse’s name into a trust to provide financial assistance to the spouse, while sheltering property from the spouse’s future creditors and taxable estate.

Beneficiary Defective Inheritor’s Trust (BDIT) The BDIT is an irrevocable trust structured so the beneficiary can manage and use assets but the assets are not included in their taxable estate.

Grantor Retained Annuity Trust (GRAT) The GRAT is also an irrevocable trust. The GRAT lets the grantor freeze the value of appreciating assets and transfer the growth at a discount for federal gift tax purposes. The grantor contributes assets in the trust and retains the right to receive an annuity from the trust, while earning a rate of return as specified by the IRS. GRATs are best in a low interest-rate environment because the appreciation of assets over the rate goes to the beneficiaries and at the end of the term of the trust, any leftover assets pass to the designated beneficiaries with little or no tax impact.

Gift or Sale of Interest in Family Partnerships. Family Limited Partnerships are used to transfer assets through partnership interests from one generation to the next. Retaining control of the property is part of the appeal. The partnerships may also be transferred at a discount to net asset value, which can reduce gift and estate tax liability.

Charitable Lead Trust (CLT). The CLT lets a grantor make a gift to a charitable organization while they are alive, while creating tax benefits for the grantor or their heirs. An annuity is paid to a charity for a set term, and when the term expires, the balance of the trust is available for the trust beneficiary.

Charitable Remainder Trust (CRT) The CRT is kind of like a reverse CLT. In a CRT, the grantor receives an income stream from the trust for a certain number of years. At the end of the trust term, the charitable organization receives the remaining assets. The grantor gets an immediate income tax charitable deduction when the CRT is funded, based on the present value of the estimated assets remaining after the end of the term.

These are a sampling of the types of trusts used to protect family’s assets. Your estate planning attorney will be able to determine if one is right for you and your family, and which one will be most advantageous for your situation.

ReferenceKiplinger (Aug. 16, 2020) “Pre-Election Estate Planning Moves for High Net-Worth Families”

How Does One Plan for a Loved One with Special Needs?

Special Needs Trust: The gift is placed in the control of a trustee who manages the money, invests it, makes the appropriate tax filing and makes the decision about when to distribute funds.

Most family members don’t understand the web of complex regulations that dictate how public benefits work. Properly created and managed by a responsible trustee, the Special Needs Trust avoids putting the burden of financial care on other family members and lets money be wisely distributed.

Money and property in a Special Needs Trust is not considered to be an asset of the individual, as it is owned by the trust. However, the same restrictions apply to making direct distributions from the trust to the individual beneficiary for food and shelter.

ABLE Account: is created by the Achieving a Better Life Experience law. Anyone can contribute to it and money in the account is not considered income and not counted against the asset limitations. Contributions are currently capped at $15,000 per year, and the account cannot contain more than $100,000.

Distributions from the ABLE account can be used to pay for a wide array of expenses for a disabled person without impacting government benefits. That includes housing, transportation, assistive technology, health, education and other needs. Families need to be aware that the disabled individual owns the assets in the ABLE account. If they are unable to manage money or are susceptible to scams, the family will want to be cautious about putting funds into the account.

LegacyChange Plan: can spread tax advantaged monthly or quarterly guaranteed payments over years.

Your personal estate asset plan attorney or advisor is recommended.

Special Beneficiaries Estate Planning with a LegacyChange Plan


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Common Estate Planning Questions

Estate planning helps people anticipate and arrange for the care of their loved ones, the management their property if they become incapacitated or disabled, and the efficient, cost-effective distribution of their assets after they are gone.

What are the benefits of estate planning?

A properly designed and implemented estate plan allows you to:

• Ensure that your minor children will be raised according to your wishes if something happens to you.
• Ensure that you have control over your assets if you become incapacitated.
• Leave what you want to whom you want in the manner you want after you pass away, and do it in the most cost-effective manner to minimize fees and expenses.
• Protect your assets against creditors, lawsuits and other threats.
• Pass your work ethic, values and sense of responsibility to heirs.
• Significantly reduce estate, income, gift and other taxes.
• Ensure that your financial affairs and information about your family remain private.
• Protect your heirs’ inheritances.
• Leave a lasting legacy and impact on others.

What is probate?

Probate is the legal process by which the property of a person who passes away is inventoried and distributed according to the decedent’s will and state laws. Probate can be time-consuming, frustrating and needlessly expensive. It can be avoided by placing assets in a properly designed and implemented living trust.

What is a will?

A Will is a legal document that outlines how estate assets are distributed and minor children cared for following a person’s death. Having a will does not avoid probate.

What is a living trust?  Living Trust Video

A living trust is an effective estate planning tool that is used by a person to hold property during their lifetime and also distribute property at time of death. A living trust is often referred to as a “revocable” living trust because you can make changes to the trust during your lifetime. A properly prepared living trust can avoid public, costly and time-consuming court processes at death (probate) or incapacity (conservatorship). A trust can allow you to provide for your spouse without disinheriting your children, which can be important in second marriages. It can also minimize estate taxes, keep your financial affairs private, and protect inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending.

What are powers of attorney?

These are legal documents that allow you to choose, in advance, who can make medical and financial decisions on your behalf in the event of incapacity. Medical decisions are made by your health care power of attorney. Financial decisions are made by your financial power of attorney.

What is a living will?

This is a legal document detailing what types of medical treatment can and cannot be used (such as a breathing tube) to keep an incapacitated person alive in an end-of-life situation.

Is an estate plan necessary?

You don’t need to have an estate plan of your own since the state automatically has rules for how assets are distributed when you pass away. However, virtually everyone stands to benefit from estate planning. At the most basic level, an estate plan allows you to control your assets if you become incapacitated and control “who gets what” after you pass away. Estate planning can minimize the impact of taxes, professional fees and court costs. Your plan can help you accomplish a number of other important goals as well, like making sure your loved ones are taken care of according to your wishes. (See the benefits of estate planning above).

Does a living trust protect assets against the high cost of nursing home care?

No. However, a number of other tools and strategies can do so, including irrevocable trusts, long-term care planning, Medicaid planning, veterans benefits and more.

Do you need to be a millionaire to have a trust?

No. Given that a living trust can avoid the delays, cost and frustration of probate, you don’t have to be rich to benefit from having one. Many people use trusts to help hold assets in the event of incapacity such as dementia, disability or other causes. Every situation is unique. If a living trust is not right for you, we can design an effective plan without one.

How much does it cost to set up a living trust?

A living trust costs more than a will, but it avoids the needlessly expensive probate process and it provides greater control over your assets while you are alive and after you pass away. We will explain the cost of a living trust and all of our other services up front so there will be no “unpleasant surprises” at the end.

Can changes be made to an estate plan?

Yes. In fact, changes should be made to your plan whenever your medical, financial or family situation changes dramatically, or when the laws themselves change.

How often should an estate plan be reviewed?

We recommend that every plan be reviewed at least once every three to five years. Your plan should also be updated if there have been important changes in your health, financial situation and/or family.

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