Christopher S. Mulvaney,

Attorney and Counselor-at-Law

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THIS WEBSITE INCLUDES GENERAL INFORMATION & THE OPINIONS OF CHRISTOPHER S. MULVANEY. IT IS INTENDED TO STIMULATE A BASIS FOR QUESTIONS RELATED TO YOUR PARTICULAR FACTUAL CIRCUMSTANCES — BEFORE YOU ACT.  THIS WEBSITE DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU WANT LEGAL ADVICE, PLEASE MAKE A ZOOM APPOINTMENT TO SPEAK WITH ME.

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Gonzaga University School of Law – Spokane, Washington – Class of 2002 – Cum Laude The Latin phrase “Deo patriae, scientiis, artibus” translates to “For God and country through sciences and arts”.  The initials A.M.D.G. on the seal of Gonzaga Law School stand for Ad Majorem Dei Gloriam, which is Latin for “For the Greater Glory of God” the Motto of the Society of Jesus (Jesuits): a Catholic religious order founded by St. Ignatius of Loyola.

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YOU CAN CREATE AN IRREVOCABLE ASSET PROTECTION TRUST, PARTICULARLY OF THE CHARITABLE REMAINDER VARIETY

All Revocable Living Trusts (RLT) become Irrevocable Trusts (IT) at the death of the Trustor who created the Trust.

Irrevocable Trusts can be created during life, but you can’t get the assets back once you put them in, so they are expensive. Filing IRS Form 709 is required for all assets transferred to the IT, and the IT must have its own EIN, and file its own tax return.

Irrevocable Trusts & Family LLC’s are for people with a Net Worth in excess of $3 million and no debt.

Net Worth specifically excludes your paid off primary residence, your fully funded not borrowed against retirement accounts, your paid off primary vehicle, and 6 months of personal emergency cash savings because all of those are needed for you to live now, and in the future. 

Net Worth is what you can lose and still live at the same level you are living now. If you haven’t paid off your student loans, house, car, credit cards, and medical bills, do that first. Then get cash savings. Then consider investment products to avoid Washington Estate Tax and Protect Assets for yourself and multiple generations of your family.

Irrevocable Charitable Remainder Trusts are often created by clients who have Zelled me $1,000 to create WA Estate Tax planning tripling the WA Estate Tax Exemption from $3 million to $9 million, paid for their children’s college education and bought them a house and car, funded their retirement, investment accounts, and spending accounts, and put millions more into a Family LLC for the benefit of their children and still have a Taxable Estate between $9 million and $30 million (the Federal Estate Tax exemption for a married couple). Estate Tax planning above $30 million is a specialty area that requires experienced specialist advice.

Irrevocable Trusts last for 150 years before they are dissolved by Statute. This is about 7 generations if each generation is about 21 and a half years. Coincidentally, Native American Tribes for thousands of years had a concept of 7 Generation Planning that was commonly practiced throughout their whole culture. Descendants of early European Immigrants such as myself typically reserve this type of planning for the uber affluent, which is a shame. Thinking about our children, grandchildren, great grandchildren, great great grandchildren, great great great grandchildren, great great great great grandchildren, great great great great great grandchildren would do us a lot of good, especially when thinking about issues like climate change and national debt. Trying to figure out how many generations it would take to pay off the National Debt is so difficult that we don’t even try. It will take forever if we never start.

Here is an Investopedia link to more information.

Below is information from Fidelity about a particular kind of Irrevocable Trust called a Charitable Remainder Trust which combines the benefits of charitable giving including income tax reduction benefits with an Irrevocable Asset Protection Trust.

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Fidelity Charitable Remainder Trusts Download

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CHARITABLE REMAINDER TRUST –

REAL LIFE EXAMPLE

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When the WA Estate Tax Exemption was $2.193 million, I had a client with $4 million, who created two Charitable Remainder Trusts, one for each of his daughters with $1 million each. This avoided WA Estate Tax, generated 5% income for life for his daughters, and provided asset protection for him and his daughters. 5% of $1 million is $50,000. His daughters received that amount paid out weekly. When each daughter passes away decades in the future, the charity gets all of the principal in the account. The amount will be much higher than $1 million because the average stock market return is about 10%. So, about $100,000 per year will be added to the account, and $50,000 removed, meaning that the next year each daughter will receive about $52,500, and so on throughout their lives.

The father cannot lose the $2 million in principal and neither can the daughters because neither owns it. So, devastating medical expenses, bankruptcy, divorce, alcohol, drug or gambling addiction cannot reduce the principal. This provided a $2 million charitable gift tax deduction, estate tax reduction, annually increasing lifetime income, and asset protection. This strategy checked all of the boxes for this client’s goals.

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Washington State residents can meet with me in Zoom/DocuSign from anywhere in the world, and I can notarize their electronic signatures because I am a remote online notary.  Just email me an image of your photo ID.