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Buildup Equity Retirement Trusts

Estate Planning Attorney Serving Nashville

Buildup equity retirement trusts, sometimes referred to by the acronym “BERTs” for short, are a popular way to make gifts to a spouse while avoiding or minimizing certain gift and estate taxes. Like other kinds of trusts, a BERT is a legal vehicle through which a trustor places assets into the care of a trustee for the benefit of a beneficiary. The trust itself becomes a legal entity and as such, is subject to the rules and regulations of governmental entities such as the Internal Revenue Service. As with other estate planning tools, it is important that a buildup equity retirement trust be carefully drafted by a qualified professional, who can explain the nuances of such a legal vehicle to the person entering into the trust. Nashville estate planning lawyer Randy Ratliff helps those throughout Davidson and Williamson Counties with the formation of buildup equity retirement trusts, as well as many other types of trusts and estate planning documents.

Types of Trusts

While there a lot of different kinds of trusts, each geared toward achieving a particular estate planning goal, all trusts fall into two basic categories: revocable and irrevocable. As these terms suggest, a revocable trust can be terminated or changed by the trustor, while an irrevocable trust cannot be revoked by the trustor under most circumstances. BERTs are drafted in such a way as to take advantage of certain provisions of the Internal Revenue Code and, accordingly, must be adhere to a number of rules in order to meet the qualifications for possible tax avoidance or tax reduction.

Is a BERT Appropriate for Your Family?

Buildup equity retirement trusts are not for everyone. If your overall estate is of a more modest nature, such that gift taxes during your lifetime and estate taxes upon your death are not a concern, you may not need a BERT. However, there may be another type of trust that could be advantageous to you, depending upon your unique situation and needs. Trusts are very useful not only for those at the higher end of the wealth spectrum, but also for those who are of lower incomes (there are trusts designed to maximize TennCare and VA benefits, for instance) and those of middle income status who have loved ones with special needs.

If, given your current financial and family situation, you believe that a buildup equity retirement trust might be a good way to transfer wealth to a spouse so as to minimize certain taxes, you should talk to a lawyer about your particular situation as soon as possible. Together, you can decide if a BERT is appropriate and, if so, which assets, such as retirement savings, stocks, bonds, cash, real estate, and life insurance, should be placed into such a trust. Notably, buildup equity retirement trusts have more flexibility than some other types of retirement instruments, including the possibility of passing assets to children in the event of divorce or a spouse’s remarriage.

Nashville Lawyer for Your Estate Planning Needs

Deciding whether to enter into a buildup equity retirement trust can be a big decision, so it is important that you speak with an experienced trusts and estate attorney if you think a BERT might be a possibility for your estate plan. While talking about financial matters and planning for an uncertain future can be a challenging task, failing to plan appropriately for the needs of one’s loved ones in the future can create even more difficulties in the future. The Randy Ratliff Law Offices, PLLC, is now accepting appointments from those in areas including Nashville, Antioch, Hermitage, Goodlettsville, Madison, Joelton, Brentwood, Franklin, Cool Springs, and throughout Davidson and Williamson Counties. For an appointment, call us at 615-656-8282 or contact us online. Our office can also help with other estate planning needs, such as a last will and testament or an advance health care directive. Our office also handles family law and elder law matters.