Advanced Estate Planning Principles Apartment Owners Should Follow


In today's age, when most people have a mortgage, credit card, and car loan, the idea of advanced estate planning can be hard to accept. However, with these financial responsibilities now taken care of for you, it makes sense to plan your estate in advance, just in case something happens.

Estate planning is valuable for everyone. It's not just for the wealthy. This service is even more useful for those with real estate properties since you need to ensure that your assets are passed down to your intended beneficiaries without any potential legal issues. Learn more about protecting your assets here:

Here are advanced estate planning principles that apartment owners should follow:

Advanced Estate Planning note

1. Grantor Retained Annuity Trust

A grantor retained annuity trust (GRAT) is an efficient estate planning tool that has several distinct benefits over the conventional methods of securing an estate. For example, a GRAT offers tax advantages to both the beneficiary and the estate planner. Moreover, it offers convenience and security to apartment owners since it's relatively easy to create and administer.

An apartment owner who wishes to secure their apartment investment by way of a GRAT typically applies for such a plan through their bank or another trusted financial institution. Upon approval by the bank, the service provider begins by selecting a qualified grantor and, then, negotiating with the estate planning attorney or financial planner.

GRATs are intended to pay regular periodic amounts to the beneficiaries. These are usually paid out of the estate funds and will often be based on an initial investment. The GRAT will also provide the apartment owner with a safety net in case they pass away prior to the scheduled annuity payments.


2. Generation-Skipping Trust

A generation-skipping trust (GST), also known as a generation-skipper trust, is an agreement whereby the property is held by the grantor or their family members, rather than their grandchildren. The grants are known as the 'givers,' while the beneficiaries are called 'receivers.'

By skipping the next generation of beneficiaries, a generation-skipping trust allows the assets to be passed down to another generation of heirs without affecting the other generations' right to ownership. By doing so, an individual may obtain a tax benefit. In addition, by skipping the generation in question, you can obtain a larger estate, thereby reducing your taxable estate.


3. Non-Voting Common Stock

Issuing non-voting common stock is ideal if you want your beneficiaries to avoid the burden of large estate taxes upon receiving your properties. It's a win-win solution because it allows you to continue being in control of business operations, while ensuring that the assets are divided to your family members. They can, then, take over decision-making at the appropriate time.

For accounting purposes, the stockholder has no voting rights as they have no ownership interest in the company's equity, except in limited circumstances. However, there are certain situations wherein they may have voting rights over the corporation's securities, generally known as 'preferred stock.'


4. Family Limited Partnership/Limited Liability Company

Another approach you can take when making lifetime gifts is to incorporate your business. This arrangement is ideal because it provides the opportunity for you and your children to have some control over the direction of the company.

With this, you and your beneficiaries can act as a single entity. Younger generations can contribute to the management of the family's company and assets. Moreover, it's also a boon for gift tax purposes since non-controlling partial interests are discounted from their pro-rated shares of the entity's entire assets.


5. Charitable Remainder Trust

In this setup, an apartment owner can transfer their property to a charitable remainder trust and the latter would pay the former a fixed percentage of the earnings for a lifetime. This way, the taxpayer can claim an income tax charitable deduction for the rest of their life for assets that are passed on to charity at the time of their death.



The core of advanced estate planning involves reducing or eliminating estate taxes on a person's property, planning for future family assets (such as the family home, family farm, or family business), and organizing the transfer of estate assets in a way that both supports and safeguards the future generations. In short, it's planning for the future.

Some people mistakenly think that if they have a will, everything is already taken care of. However, that is just not true in every state. The best way to protect your assets and avoid probate is to do your research before you pass away.

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