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Theus Law Offices is rated 5 out of 5.0 stars based on 5 review(s).

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Most people have many questions about estate planning but never make a move to go see an attorney. Before Theus' free seminar I did not even know their were attorneys that specialized in only estate planning. Thank goodness I attended...as I did not even know what asset protection was, even though I had assets. Most people think a written will is fine and pass away thinking that things will be as they wished/stated. Most times that is not the case. I urge you to go Theus Law Offices for consultation. They are friendly and down to earth with your wishes being #1. I cannot say enough good things about them. Now that I have gone to Theus I rest so much easier knowing that my wishes...are going to be held up...just as I wanted...no doubt about it....Thanks to the Theus family !

- Peyton Guillory

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The Theus Law Offices’ Family Estate Planning is a must from my perspective. I had recently lost my dad when I decide to attend the in-person Workshop at the time. My dad and I had attended a similar workshop some four (4) years prior but my dad didn’t elect at the time to move forward. I so wished that he (my dad) had done so because now I am helping my mom go through the Succession/Probate steps with a lawyer currently. If you or your loved ones haven’t made this decision with Estate Planning, I would strongly encourage you to attend this web-based workshop/webinar. Graves Theus is a great attorney to go with for this important step in you and your family’s planning for the future in many, many ways!!!

- Mark Johnson

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The Theus Law Offices’ Family Estate Planning is a must from my perspective. I had recently lost my dad when I decide to attend the in-person Workshop at the time. My dad and I had attended a similar workshop some four (4) years prior but my dad didn’t elect at the time to move forward. I so wished that he (my dad) had done so because now I am helping my mom go through the Succession/Probate steps with a lawyer currently. If you or your loved ones haven’t made this decision with Estate Planning, I would strongly encourage you to attend this web-based workshop/webinar. Graves Theus is a great attorney to go with for this important step in you and your family’s planning for the future in many, many ways!!!

- Mark Johnson

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They are a wonderful Team!

- Jessica Cole

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Estate planning is a complicated process, but my wife and I feel it is valuable and necessary. We started by attending an Estate Planning workshop offered by the Theus Law Offices and led by Jim Theus. That was about the wisest decision we have made in some time. We engaged the services of Theus Law Offices and have benefitted enormously from the direct working relationship with Jim Theus. They did not sign us up and then pass us off to a staff member. We worked with Jim Theus personally. When it was time to work with others of the staff, we found them friendly, knowledgeable, and professional. Jim Theus is exceptionally competent and patiently answers questions. His due diligence is admirable. We found their fees for estate planning reasonable and fair. You would be wise to consider using the services of Theus Law Offices if you are interested in estate planning. We are grateful for their help and recommend them to you without reservations. Our loved ones will also be the beneficiaries of a comprehensive plan, as are we. Doyle L Bailey

- Doyle Bailey

Blog

BDIT lets you give away property without losing control


12 November, 2019

By temporarily doubling the gift and estate tax exemption, the Tax Cuts and Jobs Act (TCJA) opened a window of opportunity for affluent families to transfer assets tax-free. To take advantage of the higher exemption amount, many families that own businesses or other assets worth more than the pre-TCJA exemption amount are planning substantial gifts to their children before 2026.

Traditionally, parents use trust-based gifting strategies to transfer assets to their children. Even though these strategies offer significant tax-planning benefits, they also have a major drawback: They require you to relinquish much of your control over the assets, including the right to direct the ultimate disposition of the trust assets. One strategy for avoiding this drawback is to use a beneficiary defective inheritor’s trust (BDIT).

It’s better to receive than to give

The tax code prevents you from transferring assets in trust to your children or other beneficiaries on a tax-advantaged basis if you retain the right to use or control those assets. But similar restrictions don’t apply to assets you receive as beneficiary of a third-party trust. This distinction is what makes a BDIT work. The strategy is best illustrated with an example:

Let’s say John owns a business valued at $12 million (just over the current exemption amount of $11.4 million) and it’s organized as a limited liability company (LLC). He’d like to take advantage of the exemption by transferring ownership of the business to his three children. But he’s not ready to relinquish control over the business. John arranges for his parents to establish three BDITs, each naming him as primary beneficiary and one of his children as contingent beneficiaries. He then sells a one-third interest in the LLC to each trust for $3 million. The sale price of each interest reflects a 25% minority interest discount.

As a result, John:
  • Removes the value of the business and all future appreciation from his estate without triggering gift tax liability,
  • Provides the trust assets with some protection against creditors’ claims,
  • Retains the right as beneficiary to manage the trust assets, to receive trust income, to withdraw trust principal for his “health, education, maintenance or support,” and to receive additional distributions at the independent trustee’s discretion,
  • Retains the right to remove and replace the trustee, and
  • Enjoys a special power of appointment to distribute the trust assets (so long as it’s not for his benefit).
For this strategy to pass muster with the IRS, a couple of things must happen. First, to ensure that the BDITs have economic substance, John’s parents should “seed” each trust with cash — typically at least 10% of the purchase price, in this case $300,000 per trust.

Second, to avoid negative tax consequences for John’s parents, the trusts must be “beneficiary defective,” ensuring that John is treated as grantor for income tax purposes. Typically, this is accomplished by granting John lapsing powers to withdraw funds from the trust.

Bear in mind that implementing this strategy is complex, but it can offer significant estate tax benefits. Contact us before taking action.

Theus Law Offices specializes in a complete range of estate planning and elder law services, including wills, trusts, probate, successions, estate administration and probate litigation. If you need a Louisiana wills and trusts lawyer or succession attorney in Alexandria, Lafayette, Lake Charles, Baton Rouge, New Orleans, Shreveport, Monroe, or elsewhere in Central Louisiana, let our certified estate planning specialist and probate lawyers help you.

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