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Estate planning with legal entities requires strategic planning, says Atlantic Trust


Legal entities can provide powerful benefits to a family's overall wealth management plan but only if they work together as a cohesive, smoothly running unit, according to Atlantic Trust.

Legal entities – partnerships, limited liability companies and trusts – can be set up for educating future generations, developing the family legacy or diversifying concentrated wealth, but they require special management skills to achieve their purpose. Improper management could result in a tangled web of individual strategies that can feel more restrictive than helpful.

"While most people give considerable thought and discussion to entities as part of their wealth management plan, over time the original purpose of a particular strategy can become cloudy," says Linda S Beerman, managing director and head of wealth strategies at Atlantic Trust. "In addition, layers of additional strategies, while their intent is good, can become an expensive, time-consuming burden to manage."

One particularly effective wealth transfer strategy, for example, is to sell a family investment entity to a long-term grantor trust. This structure can provide many attractive planning benefits but requires the interaction of multiple entities at once. Administering the strategy is complex and can appear daunting without the help of a qualified wealth management professional.

"Clients frequently come to Atlantic Trust with what seems like a simple question , but that question can have far-reaching implications," says Beerman. “For instance, 'Should I deed our family vacation home to our children in equal shares?' Although that might be the simplest way to effect the transfer, it is rarely one that works for growing young families for the long-term."

In this case and others like it, there are many issues that should be considered; the answers will inform how such a shared arrangement would be structured. Atlantic Trust's professional administration allows clients to think about the merits of the investments themselves rather than the sea of paper that goes along with it. To learn more about Atlantic Trust's approach to wealth management, click, or visit our Online Resource Center.

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