An estate plan isn't a one-time project. The documents that protect you at 18 look very different from the ones your family will rely on at 80. As your life changes through marriage, children, growing assets, and aging, your plan should change with it.
Here's what to have in place at every stage, starting at 18.
Once you're a legal adult, your parents can't automatically see your medical information or step in on your finances, even in an emergency. Three documents fix that by allowing you to appoint an agent who can help:
Update beneficiaries on retirement accounts and life insurance. Review how your home and accounts are titled. Name each other (or whoever you choose) in your healthcare directives, powers of attorney, and wills. If you're unmarried, this matters even more, because the law may not recognize your partner by default or you may have other, specific beneficiaries to name.
A will is where you name a guardian for minor children. It's also worth considering a trust, since kids can't inherit outright, and money left to a minor may end up under court supervision until they're 18. Life insurance often becomes the backbone of your plan.
Assets have grown, and so has complexity. A revocable trust can help your family avoid probate. Take a fresh look at who you've named as executor, trustee, and agent, too. If those roles still go to parents who are now in their 70s or 80s, it may be time for a change. This is also a good moment to make sure your parents have their own documents in order, because their plan affects yours—especially if you’re the one designated to manage it.
Your adult children may now be the right people to serve as your agents, executor, or trustee. If you name them, let them know and tell them where your documents are. Retirement account beneficiaries matter more than ever, since many heirs must now empty inherited IRAs within 10 years. If giving matters to you, qualified charitable distributions from IRAs (available at 70½) can be a tax-smart way to do it.
Make sure your powers of attorney and health care directive are current. Older documents can get pushback from banks and medical providers. Have an honest conversation about how long-term care would be paid for, whether through savings, insurance, or Medicaid planning, which works best well before care is needed. And share your wishes now, so the people you've named aren't left guessing when it matters most.
BIP Wealth, LLC (“BIP Wealth”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC as a registered investment adviser does not imply a certain level of skill or training. For more information about BIP Wealth, please refer to our Form ADV, available at adviserinfo.sec.gov or upon request.
This commentary is intended for informational purposes only and does not constitute tax or legal advice. Please consult your personal tax professional and estate planning attorney before making any tax or legal decisions. Investors should seek tax and legal advice based on your particular circumstances from an independent tax professional and estate planning attorney as laws are subject to interpretation, legislative change, and are unique to each individual's particular set of facts and circumstances. The opinions in this commentary are as of a specific date and are subject to change.
Sarah Watchko is an employee of BIP Wealth and has been serving families’ estate planning needs for nearly 20 years.
Transferring your wealth to the next generation is typically not a straightforward process. When considering how to safeguard your wealth for future generations, one of the most critical steps is estate planning. So, what is estate planning? In its simplest form, it is a combination of financial management strategies that help you prepare for several potential scenarios, including death and incapacitation. When planning your financial future, estate planning can help you manage and transfer your assets while mitigating potential taxes and legal hurdles.
Without knowing what an estate plan is or having a comprehensive plan in place, your estate could be diminished over time by taxes, fees, and more. In this blog, we’ll outline the important factors to consider when building an estate plan, the benefits of a trust plan vs. a will, and how estate planning and trusts can go hand-in-hand.
To understand what estate planning is, it is important to understand the key factors that make up a holistic plan. From wills to trusts, there are many ways to preserve your financial legacy for generations to come.
An individual’s last will and testament is a crucial part of the estate planning process. This document serves two critical purposes: (1) to outline how an individual’s assets will be distributed after death, and (2) to designate who will be in charge of the process. This will allow you to name beneficiaries, designate guardians for minor children, and specify how debts and taxes should be handled.
When planning a will, you might consider using it in conjunction with an estate planning tool such as a trust. This is because a last will and testament is subject to the probate process, which can be time-consuming and costly.
Trusts are another crucial component of the estate planning process, especially for individuals with sizable estates looking to protect and efficiently transfer their wealth. Because your last will and testament would be subject to the probate process, placing assets into a trust helps reduce complications; some trusts can also help reduce tax exposure and provide long-term financial security for future generations.
Trusts come in many varieties, including revocable and irrevocable. By “removing” certain assets from your estate, irrevocable trusts can potentially lower your tax bill in both the short and long term. Ultimately, trusts offer flexibility and protection, making them a vital tool in preserving wealth and avoiding costly taxes.
If you’re suddenly unable to make financial decisions regarding your estate, who will act on your behalf? Without establishing power of attorney, the answer would be unclear. A POA is a legally binding document that grants power to another person—called an “agent” or “attorney-in-fact”—to act on your behalf in financial or legal matters if you're unable to do so. Why is it important for estate planning? Having a POA in place ensures that your wealth and assets will be managed according to your wishes if you become incapacitated due to illness or injury. Without it, your family may have to go through a lengthy court process to gain control of your finances.
On top of a financial POA, you can also establish a healthcare directive to give authority to the agent to make healthcare decisions if you are unable to do so yourself. This can allow you to formally state your preferences for end-of-life care and other major decisions, making it another important part of a sound estate plan.
Finally, it is wise to consider that no two estate plans will look entirely the same. And what is estate planning if not a tool to help everyone find the right solution for their financial goals? It’s never too early to discuss with your family and financial partners who your beneficiaries will be, what your healthcare preferences are, and what sort of trusts you’d like to consider.
At BIP Wealth, our in-house estate planning team is led by veteran Estate Planning Advisor, Sarah Watchko. She’ll help guide your family through the process of securing your loved one’s financial future. Schedule a time to chat with us if you’d like to learn more about the guidance we can provide throughout your estate planning journey.
Now that we know what estate planning is, let’s briefly discuss the top three benefits you may enjoy from a comprehensive plan.
Estate planning is what can help you achieve greater control over how and when your assets are distributed. You can designate specific instructions for different beneficiaries, set up trust funds with conditions, and protect assets from creditors, lawsuits, or even divorce.
Organizing your estate ahead of time can ensure that your estate is transferred smoothly. Estate planning ensures that your loved ones, including minor children or dependents with special needs, are provided for in a way that aligns with your ultimate wishes and reduces the potential for conflict.
For high-net-worth individuals, one of the most significant benefits of estate planning may be the potential to significantly reduce these taxes to protect your wealth.
What are the most important tools in estate planning?
The most important estate planning tools include wills, powers of attorney, healthcare directives, and trusts, which can ensure your wishes are followed.
How can trusts improve your estate planning strategy?
Trusts can help remove assets from your probate estate to ensure the efficient transfer of wealth, and in some cases, protect from wealth transfer taxes.
Why should you include a will as part of your estate plan?
A last will is a crucial part of any estate plan. It allows you to designate beneficiaries, name guardians for minor children, and avoid potential disputes. Without a will, state law determines how your assets are distributed, and a court may have to decide who is in charge.
When should you update your estate plan to reflect life changes?
It is best to update your estate plan after significant life changes, such as marriage, divorce, the birth of a child, the acquisition of new assets, or a move to a new state. Additionally, you should review your plan periodically to account for changes in tax laws or personal circumstances.
BIP Wealth, LLC (“BIP Wealth”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC as a registered investment adviser does not imply a certain level of skill or training. For more information about BIP Wealth, please refer to our Form ADV, available at adviserinfo.sec.gov or upon request.
This commentary is intended for informational purposes only and does not constitute tax or legal advice. Please consult your personal tax professional and estate planning attorney before making any tax or legal decisions. Investors should seek tax and legal advice based on your particular circumstances from an independent tax professional and estate planning attorney as laws are subject to interpretation, legislative change, and are unique to each individual's particular set of facts and circumstances. The opinions in this commentary are as of a specific date and are subject to change.
Sarah Watchko is an employee of BIP Wealth and has been serving families’ estate planning needs for nearly 20 years.
Most people don't put off estate planning because they don't care. They put it off because they assume they already know how it works—and those assumptions are often wrong. August is National Make-A-Will Month, which makes it a natural time to revisit what you think you know. Below, we walk through five of the most common misconceptions about wills, probate, guardianship, and medical authority and explain why the real answers matter more than most people realize.
FALSE
This is one of the most persistent misconceptions in estate planning, and it catches families off guard at the worst possible time. A will does not skip probate. In fact, a will is an instruction set for probate—it tells the court who should receive your assets and who should serve as executor, but the court still has to validate the document to give the executor authority to begin the process and make distributions. Probate is the legal process through which a deceased person's estate is administered. When you have a will, that process is guided by your wishes. When you don't, it's guided by state law. But either way, probate happens.
What actually avoids probate? Certain trust structures—most commonly a revocable living trust—can hold assets outside of the probate process entirely. Accounts with designated beneficiaries (like retirement accounts and life insurance policies), jointly held property with rights of survivorship, and payable-on-death or transfer-on-death designations also pass outside probate. A will, by itself, does none of that.
The distinction matters because probate can take months or even years in some jurisdictions, involves court costs and legal fees, and is a matter of public record. For families who value privacy, speed, or simplicity, understanding that a will alone doesn't accomplish those goals is the first step toward a more comprehensive plan.
A will is essential—but it's the starting point, not the finish line. If avoiding probate is important to you, the conversation needs to go further.
FALSE
This assumption feels logical—and in a few states, it's close to accurate. But in Georgia, where BIP Wealth is headquartered and where many of our clients live, this is not how it works.
Under Georgia's intestate succession laws (O.C.G.A. § 53-2-1), if you die without a will and are survived by both a spouse and children, your estate is divided equally among your spouse and children—with the important caveat that the spouse is guaranteed no less than one-third of the estate, regardless of how many children there are.
That means if you have a spouse and three children, your spouse would receive one-third and your children would split the remaining two-thirds. Many people assume their spouse will receive everything and are stunned to learn that their kids—including minor children who may need a court-appointed guardian to manage inherited assets—are entitled to a share.
Other states handle this differently. Some give the surviving spouse a larger share or the entire estate if the children are also the spouse's children. Some don't. The point is that without a will, you're not making the decision—your state legislature is. And the default rules were written for the broadest possible set of family situations, not for yours specifically.
If you want your spouse to be fully provided for, don't leave it to statute. A will—and potentially a trust—lets you make that call yourself.
FALSE
It's easy to see why this myth sticks around. Estate planning gets associated with large inheritances, complicated trusts, and the kinds of tax strategies that only matter when you're dealing with millions of dollars. And it's true that high-net-worth families often need more sophisticated planning. But the core of an estate plan has nothing to do with how much money you have.
A basic estate plan consists of three documents that every adult should have in place:
A will directs how your assets are distributed after death and names an executor to manage the process. It can also nominate a guardian for minor children—something that has no substitute.
A financial power of attorney designates someone to manage your financial affairs if you become incapacitated. Without one, your family may need to go through a court-supervised guardianship or conservatorship proceeding just to pay your bills or manage your accounts.
A healthcare directive (or advance directive) documents your medical treatment preferences and names someone to make healthcare decisions on your behalf if you can't make them yourself.
These three documents form the foundation. They're not about wealth—they're about authority, clarity, and control. Trusts are the extra-credit layer, useful for avoiding probate, managing complex assets, providing for beneficiaries with special needs, or structuring distributions over time. But the foundation comes first, and it applies to everyone.
If you're an adult with any combination of a bank account, a lease, a child, or a body that could become incapacitated, you benefit from a basic estate plan. Full stop.
TRUE — BUT ONLY AFTER A COURT DECIDES WHO
This one is accurate as stated: if you die without naming a guardian for your minor children, a judge will decide who raises them. And while courts make that decision with the child's best interests in mind, the person a judge selects may not be the person you would have chosen.
Georgia law establishes a statutory priority for who can petition for guardianship, and judges consider factors like existing relationships, stability, and proximity. But the process is a court proceeding, which means it can involve disagreements among family members, delays, and outcomes that reflect legal standards rather than personal wishes.
A will is the only reliable way to formally nominate a guardian for your children. That nomination isn't automatically binding—courts still have discretion—but a clearly stated preference from a parent carries enormous weight. Without one, you're leaving the most personal decision a parent can make entirely in the hands of a legal system that doesn't know your family the way you do.
This is also worth thinking about beyond the "who." A guardian nomination in a will can be paired with a trust that provides financial resources for the guardian to use on behalf of your children—ensuring that the person raising them also has the means to do so without dipping into their own finances.
If you have minor children, this alone is reason enough to create a will. Naming a guardian is one of the most important things a will does—and one of the few things nothing else can replace.
IT DEPENDS
This one is tricky because it feels like it should be straightforwardly true—and in some states, it partially is. Many states have enacted default surrogate consent laws that establish a priority list of decision-makers when a patient can't speak for themselves, and the spouse is typically near the top of that list. But "default surrogate" is a far cry from "automatic authority," and the details matter enormously.
In some states, the default hierarchy requires agreement from multiple family members—not just one. In others, the surrogate's authority is limited to specific kinds of medical decisions and may not cover end-of-life care, experimental treatments, or psychiatric commitments. Some states don't have a default surrogate law at all, which means your spouse may need to petition a court for guardianship just to make time-sensitive healthcare decisions—a process that can take weeks.
Even in states where the law is relatively clear, default surrogate statutes can create conflict. If you have adult children from a prior marriage, siblings with strong opinions, or family members who disagree about your care, a statutory hierarchy can become a flashpoint rather than a resolution.
A healthcare directive eliminates the ambiguity. It names the person you want making decisions, spells out your treatment preferences, and gives medical providers a legally recognized document they can act on immediately. Without one, you're relying on a backup statute instead of your own clearly stated choice.
Don't assume the law will sort this out the way you'd want. A healthcare directive takes five minutes to discuss and can prevent weeks, months, or in the worst cases, years (see, e.g., Terri Schiavo case) of legal and emotional turmoil for the people you love.
None of these myths are unreasonable things to believe. They're intuitive. They're what most people would guess. And that's exactly what makes them dangerous—because the gap between what you assume and what actually happens is where families get hurt.
Estate planning isn't a single event. It's a set of decisions that should be revisited after major life changes—a marriage, the birth of a child, a move to a new state, a change in your financial picture. And for most people, the barrier isn't cost or complexity. It's just inertia.
National Make-A-Will Month is a useful nudge. But the content of this post is evergreen: these myths don't expire, and neither does the importance of getting your plan in order.
The best time to create an estate plan was years ago. The second-best time is now. And the worst time is when your family needs one and it doesn't exist.
If you have questions about how estate planning fits into your broader financial picture, reach out to us to connect with a BIP Personal Wealth advisor.
Disclaimer: This blog is intended for informational purposes only and does not constitute legal advice. Please consult your personal attorney before making any legal decisions.
You just moved your child into their dorm, bought the mini fridge, maybe shed a tear in the parking lot. Here's the thing nobody mentions at orientation: the moment your child turned 18, you lost every legal right to make decisions on their behalf, including medical ones. That means if your student ends up in an ER two states away, the hospital has no obligation to tell you what's happening, let alone let you make treatment decisions. Your ability to call the registrar about a billing issue, talk to a doctor about a diagnosis, or manage a bank account in a pinch didn't gradually fade. It vanished overnight, on their 18th birthday.
The fix is straightforward. Two documents—none of them expensive nor complicated—put you back in the picture when your child needs help.
This is the big one, and it actually does double duty. In Georgia, the Advance Directive for Health Care includes a built-in HIPAA authorization—the federal privacy release that lets healthcare providers share your child's medical information with you. Without that release, a hospital is generally prohibited from providing you any information about your child. The same document also names a healthcare agent (usually a parent) who can make medical decisions if your child is unconscious or otherwise unable to speak for themselves. Without it, you may need to go to court to get that authority, and that process doesn't move at the speed of a medical emergency.
This one covers the non-medical side. A durable financial power of attorney lets a parent (or another trusted person) handle financial matters on your child's behalf—things like managing a bank account, dealing with a landlord, handling insurance claims, or sorting out a tuition issue. "Durable" means it stays in effect even if your child becomes incapacitated, which is exactly when you'd need it most.
What these documents are called and how they're packaged varies by state. Georgia combines the HIPAA authorization and healthcare power of attorney into a single Advance Directive. Other states may require them as separate documents, or use different terminology altogether. If your child goes to school out of state, it's worth confirming that the documents will be recognized and effective where they'll actually be used. An attorney in the relevant state can make sure nothing falls through the cracks. Also, these aren't "set it and forget it" documents. As your child gets older—finishes school, starts a career, gets married—who they'd want making decisions for them may change. A quick review every few years keeps things current.
None of this is dramatic or complicated. It's a small amount of planning that prevents a potentially enormous headache at the worst possible time. If your child is heading to college this fall, or already there, this belongs on the move-in checklist right alongside the shower caddy and extra-long sheets.
Your BIP Wealth advisor can help you think through what's needed and connect you with the right attorney to get these documents in place. It's one of the easiest planning conversations you'll have, and one of the most worthwhile.
What legal documents does my college student need?
At a minimum, your child should have an Advance Directive for Health Care (which includes a HIPAA authorization and healthcare power of attorney) and a Durable Financial Power of Attorney. These ensure you can step in on medical and financial matters when needed.
Why do I lose the right to make decisions when my child turns 18?
Under federal and state law, an 18-year-old is a legal adult. HIPAA prohibits healthcare providers from sharing medical information without the patient's consent, and banks and schools treat your child as an independent account holder. These rights don't phase out, they end on their birthday.
Do these documents work across state lines?
It depends. Many states honor out-of-state documents, but some have specific requirements. If your child attends school in a different state, it's worth having an attorney in that state confirm the documents will be recognized there.
How often should we update these documents?
Review them every few years or after major life changes—graduation, marriage, a move to a new state—or a change in who your child would want making decisions on their behalf.
Disclaimer: This blog is intended for informational purposes only and does not constitute legal advice. Please consult your personal attorney before making any legal decisions.
Preparing financially for divorce starts with gathering complete records of your assets and debts, building a realistic post-divorce budget, and understanding how your state divides marital property. Addressing tax consequences, updating beneficiaries, and assembling a legal and financial team early protects your long-term financial security.
Gather your financial documents first: tax returns, bank and brokerage statements, employer-sponsored retirement accounts (401(k)s, 403(b)s), business records if applicable, and insurance policies.
Include debts. Like assets, debts are typically classified as "marital," meaning responsibility for them is often shared. Look for mortgage statements, other bank loans, student loans, and credit card balances.
Complete, accurate financial information supports two things: your financial advisor's ability to identify the most opportunistic way to divide assets, and the going-forward financial plan you build from there.
A budget for life after divorce is harder to build when decisions like whether you'll move are still unsettled. Even so, estimate your future income needs and identify where adjustments may be prudent.
Operating two households costs more than operating one, often by a wider margin than people expect. Planning for that now reduces financial strain later.
You don't need a law degree, but the basics of how your state handles marital property matter. In Georgia, the standard is equitable division: fair, not necessarily equal.
"Fair" is subjective and depends on the specifics of your situation. Courts weigh factors including:
In Georgia, only marital property is subject to division. Separate property generally stays separate, provided it has been handled appropriately.
Tax consequences play a substantial role in what equitable division looks like in practice. If the marital residence has appreciated significantly, keeping it may mean sole responsibility for capital gains tax when you eventually sell.
The same applies to pensions, 401(k)s, IRAs, deferred compensation, and stock options. The tax cost of accessing these assets can be significant, so weigh each one carefully before agreeing to a settlement.
Review beneficiary designations on non-probate accounts, and put updating your Will, Trusts, and powers of attorney on your near-term to-do list.
This matters concretely: if you don't proactively change the beneficiary on your IRA, it will belong to your ex-spouse upon your passing, regardless of the divorce.
A strong team supports you professionally through this process.
The process of divorce can be stressful and sad. It also leads to a new chapter, one that can be productive and stable for everyone involved.
Together with your legal and financial team, you can move forward with confidence and a plan for long-term financial security.
If you're navigating a divorce and want to talk through your options, reach out to connect with a BIP Personal Wealth advisor
What financial documents do I need to prepare for divorce? Gather tax returns, bank and brokerage statements, retirement account statements (401(k), 403(b), IRA), mortgage and loan documents, credit card balances, business records, and insurance policies.
How is a 401(k) divided in a divorce? Retirement funds earned during the marriage are typically marital property. Dividing a 401(k) or pension usually requires a Qualified Domestic Relations Order (QDRO), and the tax cost of accessing the funds should be weighed before you agree to a settlement.
What is equitable division in Georgia? Georgia uses equitable division, meaning a fair split rather than an automatic 50/50. Courts weigh the length of the marriage, each spouse's financial contributions, and future earning capacity. Only marital property is divided.
Do I need to update my beneficiaries after a divorce? Yes. Beneficiary designations override your Will. If you do not update them, an ex-spouse can remain the beneficiary regardless of the divorce.
Should I keep the house in a divorce? Not always. A significantly appreciated home can leave you solely responsible for capital gains tax when you sell, so weigh carrying costs and tax exposure against other assets first.
BIP Wealth, LLC (“BIP Wealth”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC as a registered investment adviser does not imply a certain level of skill or training. For more information about BIP Wealth, please refer to our Form ADV, available at adviserinfo.sec.gov or upon request.
This blog is intended for informational purposes only and does not constitute legal advice. Investors should seek legal advice based on your particular circumstances from an attorney as laws are subject to interpretation, legislative change, and are unique to each individual's particular set of facts and circumstances. Please consult your attorney before making legal decisions.
A Spousal Lifetime Access Trust (SLAT) is an estate planning strategy often used by high-net-worth families to move appreciating assets out of a taxable estate while still allowing a spouse to benefit from those assets during their lifetime. SLATs can offer estate tax mitigation, gifting flexibility, and asset protection benefits, but they also come with important risks tied to divorce, premature death, liquidity planning, and complex trust structuring.
For families with significant wealth, estate planning eventually becomes about more than basic wills and powers of attorney. Once a household approaches estate tax exposure, advanced strategies often enter the conversation, and one of the more common tools is the Spousal Lifetime Access Trust.
A Spousal Lifetime Access Trust (SLAT) is an irrevocable trust created by one spouse for the benefit of the other spouse, typically alongside children or future generations. The primary goal is to move assets outside of the taxable estate while still preserving a degree of indirect household access to those assets.
Check out this Spousal Lifetime Access Trust diagram for a helpful visual:
In practice, this allows a family to transfer wealth strategically while maintaining some flexibility if future cash flow needs arise.
SLATs easily become part of a holistic wealth management strategy that coordinates investment management, tax planning, estate planning, and long-term liquidity needs.
The structure itself is highly technical from both a legal and tax perspective, typically requiring estate attorneys, CPAs, and wealth advisors to assist with planning.
At a high level:
Assets commonly transferred include:
Because the assets are removed from the grantor’s taxable estate, future appreciation may also avoid estate taxes.
SLATs are often discussed with families whose estates may eventually exceed the $30M combined estate tax exemption available to a couple. In many cases, clients exploring SLATs have net worths exceeding $15 million and are beginning to ask bigger-picture questions like, “You said I may have an estate tax problem. What can we do about it?”
A SLAT is one option within that broader estate tax planning toolbox.
A SLAT is usually not an early-career planning strategy. More often, these conversations happen later in life—families in their 50s or older, business owners with appreciating assets, or couples who have been married for decades and already have foundational estate documents in place.
In many cases, the strategy is best suited for:
This is especially true for families already focused on protecting wealth for children and future generations through long-term family and individual planning.
While there are many benefits, there are some potential risks associated with SLATs. Here’s a look at them.
The primary benefit of an SLAT is that it reduces future estate tax exposure by removing appreciating assets from the taxable estate.
Although the grantor gives the assets away, the beneficiary spouse may still access trust distributions under the trust terms.
While not usually the primary objective, SLATs may also provide a layer of creditor protection depending on the trust structure and state law.
SLATs can help families move wealth efficiently to future generations while maintaining continuity in the overall financial plan.
If the beneficiary spouse is no longer part of the household, indirect access to those assets may effectively disappear, and it would be encouraged to work with a Certified Divorce Financial Analyst.
That said, many families pursuing SLATs are long-married couples with stable financial structures, reducing the likelihood of this outcome, so this concern is not very common.
An unexpected life event, such as premature death, can also fundamentally change the structure.
If the beneficiary spouse dies first, children often become the primary beneficiaries. That may create a scenario where adult children ultimately stand to benefit from control assets that may have once supported the surviving spouse’s lifestyle.
A SLAT is irrevocable. The grantor is permanently transferring ownership of those assets.
That means liquidity planning matters. If you gift $10 million into a trust, the assets remaining outside the trust still need to support your long-term lifestyle.
Couples sometimes create SLATs for each other, but if the trusts are too similar, the IRS may apply reciprocal trust rules that undermine the intended tax treatment.
This is one reason why drafting and customization are critically important.
Modern trust planning often includes multiple “levers” built into trust documents to preserve flexibility as laws, tax rules, and family dynamics evolve.
But even with that flexibility, a SLAT should never exist in isolation.
The strategy works best when coordinated with:
For families navigating substantial wealth, the goal should be to build a durable financial structure that can support multiple generations while adapting to life’s inevitable changes.
At BIP Wealth, your estate plans are integrated into a holistic plan centered around planning for unexpected life events, investment strategy, and long-term family goals. If you’re interested in an SLAT or want to discuss your portfolio strategy, connect with an advisor today.
BIP Wealth, LLC (“BIP Wealth”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC as a registered investment adviser does not imply a certain level of skill or training. This blog is intended for informational purposes only and is intended solely for the addressee. For more information about BIP Wealth, please refer to our Form ADV, available at adviserinfo.sec.gov or upon request.
This blog is intended for informational purposes only and does not constitute tax or legal advice. Please consult your personal tax professional and estate planning attorney before making any tax or legal decisions.
Investors should seek tax and legal advice based on your particular circumstances from an independent tax professional and estate planning attorney as laws are subject to interpretation, legislative change, and are unique to each individual's particular set of facts and circumstances.
In the world of estate planning, where many concepts already feel slightly out of reach, Trusts can certainly challenge the mind. These structures fulfill various needs and goals and can be broken down into myriad categories. In this blog, we’ll answer common questions including: What is a trust? When do I need a trust? Does a trust save on taxes? Does a trust keep creditors away?
A trust is a legal structure in which a Trustee is designated to manage assets for the benefit of one or more Beneficiaries. The person who establishes and generally funds the trust is called the “Grantor” or “Settlor.”
Often, a trust is established to ensure assets are managed in a certain way and by a certain person or person(s).
There are many kinds of trusts that serve many different purposes.
One of the most common types of trusts is the Revocable Living Trust (“RLT”). In this type of trust, the Grantor, Trustee, and Beneficiary are usually the same person. The purpose of the trust is simply to remove the assets from the Grantor’s individual name to avoid Probate and to help ensure the smooth transition of assets in the event of incapacity or death. This type of trust is a great estate planning tool, but does not provide tax savings or creditor protection.
Alternatively, Irrevocable Trusts are often used for tax planning or asset protection purposes. These trusts can be established during life (an “Inter Vivos” or “Living” Trust) or upon death (a “Testamentary” Trust).
For example, during life one can establish and fund an Irrevocable Living Trust for the benefit of a spouse, children, and / or grandchildren, in order to move assets out of the taxable estate and ensure the assets are protected for generations to come. Or, in a Will you can establish a trust for the benefit of your spouse and children which protects those assets from future creditors and liability, including divorcing spouses, after you have passed. This would be an Irrevocable Testamentary Trust.
Trusts can have an impact on income taxes (imposed on earnings) as well as gift and estate taxes (imposed on the transfer of wealth).
As far as income taxes are concerned, income generated by trust assets is still taxable, either to the Grantor, to the trust itself, or to a beneficiary or beneficiaries. Often, it is preferable that the Grantor be liable for income taxes because the trust is subject to compressed income tax brackets. In other words, taxes may be lower if the Grantor is still alive and is responsible for them.
In the event of a testamentary trust, the Grantor is deceased, so the income is either taxed to the trust or, in the event of a distribution to a beneficiary, can be taxed to the beneficiary.
Concerning Gift and Estate Taxes, a transfer of assets to an Irrevocable Trust created for (and controlled by) someone other than the Grantor may be a taxable gift that has to be reported and counted against a person’s “lifetime exemption.” The trust assets may then be able to grow outside of the Grantor’s taxable estate, and the appreciation can pass estate tax free. The typical Revocable Living Trust, on the other hand, has no gift or estate tax impact at all.
Some trusts are creditor-protected and some are not. Generally speaking, a revocable trust (one that the Grantor can change/amend/revoke) is not protected from the Grantor’s creditors because of the Grantor’s unrestricted access to Trust assets.
In a majority of states, creditors can also reach Irrevocable Trust assets if the Grantor is also the Beneficiary. That is, if I set up an Irrevocable Trust for my own benefit, my creditors can still reach them. However, a minority of states will protect the assets of these “self-settled” Irrevocable Trusts when structured properly under the laws of those states.
Irrevocable Trusts established for the benefit of someone else (e.g. my spouse or my child) can be protected from creditors – both the Grantor’s creditors and those of the beneficiary(ies).
An experienced estate planning attorney can answer both of these questions for you. Your attorney should consider your goals and evaluate whether a trust (and which kind of trust) is necessary to accomplish those goals. Trusts are certainly not a one-size-fits-all solution and many factors should be weighed.
If a Trust of any kind is necessary or helpful, the attorney would draft the trust document in a manner that is tailored to your needs and assist in the execution of the necessary documentation. The final step is to provide guidance and help transferring assets to the trust, by way of retitling accounts and executing deeds to trust for real property.
A note from Sarah: Trust planning is deeply personal, and the right structure for you depends on factors specific to your life, your family, and your goals. If any of these questions resonate with you, I'd encourage you to reach out.
At BIP Wealth, our team of trusted advisors can help clients like you evaluate whether a trust is advisable or necessary and connect you with professionals to help you put a comprehensive trust plan in place.
A will is a legal document that expresses your wishes for how your assets should be distributed after you die, but it has to go through probate, which is a court-supervised process that takes time and can be costly. A trust, on the other hand, holds your assets during your lifetime and transfers them to your beneficiaries outside of probate entirely. That means a faster, more private transition for your family. For most clients, the desire to avoid probate is the primary reason we explore whether a trust makes sense for them.
Generally, yes, but only for assets that are actually titled in the name of the trust. This is a detail that catches a lot of people off guard. A Revocable Living Trust is specifically designed to keep your estate out of probate court, but if you never transfer your accounts or property into the trust, those assets will still go through probate. Part of the process of setting up a trust is what's called "funding" it, meaning retitling accounts and executing deeds so your assets are properly held by the trust.
It depends on the type of trust. A Revocable Living Trust does not provide creditor protection; because you can change or revoke it at any time, creditors can still reach those assets. An Irrevocable Trust, however, can offer meaningful protection, particularly when it's established for the benefit of someone other than yourself, like a spouse or children. If you're seeking creditor protection as a goal, that's an important conversation to have with an estate planning attorney, as the rules vary significantly by state.
A will alone may be sufficient for someone with a straightforward estate, few assets, and no concerns about probate, taxes, or creditor exposure. But for clients with more complex situations—a blended family, significant assets, a child with special needs, business interests, or multi-state real estate—a trust often becomes an essential part of the plan. There's no universal answer here, which is why I always encourage people to think through their specific goals before assuming one approach is right for them.
For a Revocable Living Trust, the trust becomes irrevocable at the grantor's death—meaning it can no longer be changed. At that point, the successor trustee steps in to manage and distribute the assets according to the trust's terms, without the need for probate court involvement. For an Irrevocable Trust, the structure and administration at death depends on how it was originally drafted. In either case, having a clear, well-drafted trust and a trustee who understands their responsibilities makes an enormous difference in how smoothly things go for your family.
Sarah Watchko is an employee of BIP Wealth and has been serving families' estate planning needs for nearly 20 years. This content is for informational purposes only and does not constitute legal, financial, or tax advice. Readers should consult with a qualified estate planning attorney before making any decisions related to estate planning.
A few months ago, a colleague mentioned that a friend of theirs was trying to figure out how to exit a sizable real estate portfolio. The timing was good—I had just wrapped up a comprehensive exit planning analysis for a long-time real estate investor, and the parallels were striking enough that I thought it was worth sharing.
My client is 62 years old and has spent decades building a portfolio of nearly 40 single-family residential rental homes. Over the years, he's become genuinely good at finding, renovating, and managing these properties. But he had reached the point in life where he was ready to put the toolbox down. He wanted out of the day-to-day grind. The question wasn't whether to exit, it was how.
Before looking at any specific strategies, we got clear on what a successful outcome actually looked like for him. His goals were straightforward:
That last point turned out to matter more than almost anything else.
We put three main exit paths under the microscope:
Deferred Sales Trust (DST structure).
Attractive because it allows you to defer capital gains at the point of sale and spread recognition of income over time. For investors with highly appreciated assets, this can look very appealing on paper.
1031 Exchange Real Estate Program.
A way to swap out of active management and into a passive institutional real estate structure while continuing to defer taxes. The appeal here was removing himself from the day-to-day without triggering an immediate tax bill.
Staged, tax-managed disposition, selling properties over time.
The more straightforward path: sell homes strategically over a 10-year window, recognize and pay long-term capital gains taxes as you go, and reinvest proceeds into income-producing assets better suited to retirement.
On the surface, the tax-deferral strategies looked compelling. Who wouldn't want to kick the tax bill down the road?! But when we fully modeled the economic impact, including fees, ongoing administrative costs, investment restrictions, liquidity constraints, and the compounding effect of those variables over time, the picture changed substantially.
For this particular client, the most advantageous path was not the most complex one. The staged, taxable sell-down produced the strongest projected outcome for long-term family net worth by approximately $2 million.
The reason comes down to something that often gets underestimated in these conversations: fees compound too, and they compound against you. When you layer in program fees, administrative costs, and the loss of control over how and where your proceeds are reinvested, you can give back a significant portion of the tax savings you thought you were locking in.
By paying taxes along the way—and keeping control of the capital—my client retained more money working for him over the long run. And the math bore that out.
Beyond the numbers, there was something else the staged approach offered that the tax-deferral structures couldn't: flexibility.
Rather than committing the entire portfolio to a single transaction or investment vehicle all at once, my client could sell homes selectively based on market conditions, tenant turnover, maintenance costs, and his own cash flow needs in any given year. When properties sold, proceeds could flow into investment approaches better aligned with where he is in life: lower complexity, more passive income, less operational burden.
That kind of control has real value. It's difficult to quantify, but it's real.
There's no universal "best" exit strategy for owners of multiple investment properties. Deferred Sales Trusts, 1031 exchanges, institutional real estate funds, installment sales, and staged taxable dispositions can all make sense depending on the circumstances.
The variables that matter most include:
For a younger investor who plans to keep accumulating properties, tax deferral strategies may offer compelling long-term advantages. But for an investor approaching retirement—someone who wants less complexity, not more, and who values flexibility above all—a thoughtfully managed taxable exit strategy may ultimately put more money in the family's pocket.
My client got what he came in wanting: a clear path to reduce the operational demands of managing nearly 40 homes, a way to keep the income coming in, and a projected increase in long-term family wealth, all without locking himself into a structure that would limit his options for years to come.
This analysis serves as a strong reminder that sophisticated planning is not always about eliminating taxes at all costs. Often, it is about balancing taxes, fees, control, flexibility, and quality of life to achieve the best overall financial outcome for the client and family.
That's what we did here, and for this client, the answer was simpler than expected.
Common exit strategies include Deferred Sales Trusts (DSTs), 1031 exchange programs, installment sales, and staged taxable dispositions. The best strategy depends heavily on the investor's age, income needs, estate planning goals, and tolerance for complexity and fees.
A DST can be useful for deferring capital gains, but investors should carefully model the full cost including program fees, investment restrictions, and reduced flexibility, all before assuming it's the most advantageous path. In some cases, a staged taxable sale produces a better long-term outcome.
Options include 1031 exchanges, Deferred Sales Trusts, and installment sales. However, a staged sell-down over multiple years while paying long-term capital gains rates can also be highly effective when factoring in the costs and constraints of tax-deferral structures.
It depends on your goals. For investors who want to stay in real estate and continue deferring taxes, a 1031 exchange may be advantageous. For those approaching retirement who want simplicity, flexibility, and control over their capital, a strategic sell-down may produce better overall results after accounting for fees and investment restrictions.
There's no single right answer, but investors in their late 50s and early 60s—particularly those managing a large number of properties—benefit from beginning exit planning well in advance. Earlier planning creates more options and allows for a multi-year strategy that spreads tax recognition and maximizes flexibility.
The information presented in this article is for educational purposes only and does not constitute investment, tax, or legal advice. Every investor's situation is different, and strategies that are appropriate for one client may not be appropriate for another. Past results from any planning strategy are not a guarantee of future outcomes. Please consult with a qualified financial advisor, tax professional, and attorney before making decisions about your real estate portfolio or exit strategy.
BIP Wealth, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training.