Legacy & Estate Planning
Protect your family and preserve your wealth across generations. We help Arizona families structure their assets to minimize estate taxes and ensure your wishes are executed smoothly.
Asset Protection
Strategies to shield your wealth from creditors, litigation, and unnecessary taxation.
Trust Coordination
Working alongside your legal counsel to fund and manage revocable and irrevocable trusts.
Generational Wealth
Structuring life insurance and legacy assets to provide tax-free liquidity to your heirs.
SRG Consulting PLLC
Strategic Excellence
Trust Planning Strategy Report
Generated on: 8/26/2026
Trust Planning Flow
Answer a few questions to see which trust structure may align with your goals.
Is avoiding the public probate process a high priority for you?
Probate is the legal process of settling an estate, which can be time-consuming and public.
Trust Strategy Progression
Revocable Living Trust
Base foundation for probate avoidance and control.
ILIT
Irrevocable Life Insurance Trust for tax-free liquidity.
BDIT
Beneficiary Defective Inheritor's Trust for business assets.
GRAT
Grantor Retained Annuity Trust to shift appreciation.
Dynasty Trust
Multi-generational wealth preservation without estate taxes.
Interactive Trust Architecture Center
Explore operational trust structures, funding mechanics, and business scenarios.
Trust Structures
Revocable Trust
Overview
A living trust that can be altered or canceled by the grantor during their lifetime. It avoids probate but does not remove assets from the taxable estate.
Create Your Private Business Continuity Map
Identify gaps in succession, buy-sell funding, key-person risk, executive benefits, estate transfer, and wealth preservation.
Secure, private, and complimentary.
Strategic Trust Coordination
A comprehensive estate plan must go beyond simply drafting documents. A trust is only effective if it is properly funded and managed. We work collaboratively with your estate planning attorneys and tax professionals to ensure that your business interests, real estate, investment accounts, and life insurance policies are correctly titled and aligned with your overall legacy objectives. This meticulous coordination prevents assets from inadvertently passing through probate and ensures your wealth is shielded from unnecessary estate taxes.
Generational Wealth Architecture
Passing down wealth is complex. Without a structured plan, a significant portion of your estate could be lost to taxes or mismanaged by heirs. We help high-net-worth families implement advanced strategies—such as Irrevocable Life Insurance Trusts (ILITs), Generation-Skipping Transfer (GST) trusts, Crummey Trusts, and Qualified Terminable Interest Property (QTIP) Trusts—to provide tax-free liquidity to beneficiaries, fund future estate tax liabilities, and establish a lasting financial legacy that reflects your core values.
Crummey and QTIP Trusts for Business Owners
| Business Structure | Best Use of a Crummey Trust | Best Use of a QTIP Trust |
|---|---|---|
| Sole Proprietorship | Funds life insurance or makes structured gifts for heirs. Because the business has no separate ownership shares, the trust generally receives cash, insurance or transferred business assets rather than stock. | Provides income and financial security to a surviving spouse while directing the remaining business assets to children or other beneficiaries. |
| LLC | May receive gifted, often nonvoting, membership interests while allowing the owner to begin transferring wealth under the operating agreement. | Can hold LLC interests, provide income to the surviving spouse and preserve the remaining ownership for the grantor's selected heirs. |
| S Corporation | Often best used to fund life insurance rather than receive shares directly, because only certain qualifying trusts may own S-corporation stock. | May hold S-corporation shares only when applicable shareholder-eligibility rules and required tax elections are satisfied. |
| C Corporation | May receive gifted minority or nonvoting shares, or fund insurance intended to equalize inheritances among family members. | Can hold corporate shares for the spouse's benefit while determining who receives the shares after the spouse's death. |
These trusts do not replace the company's operating agreement, shareholder agreement or buy-sell agreement. They should be coordinated with the business-succession plan, entity restrictions and applicable tax elections.
Trust Strategies by Business Entity Type
There is no fixed legal number of trust types, but for business-owner planning, we separate 12 major trust structures. LLCs and C-Corps generally offer greater ownership flexibility; S-Corps require special attention because only qualifying shareholders or trusts may own S-Corp stock. A sole proprietorship has no separate liability entity, so a trust alone does not create an LLC-style liability shield.
This distinction is critical: a trust protects ownership and wealth; the corporation or LLC primarily protects against operating liability. Properly combining the two creates the strongest continuity structure.
| Trust | Continuity | Protects / Accomplishes | Does Not Protect | Main Pro / Con |
|---|---|---|---|---|
| Revocable Living | ★★★★★ | Probate, incapacity, seamless succession | Creditors, lawsuits, estate tax | Maximum control / little asset protection |
| Irrevocable | ★★★★☆ | Estate separation; possible creditor protection | Fraudulent transfers; operating-company liability | Strong protection / loss of control |
| Asset Protection / DAPT | ★★★★☆ | Certain personal creditors | Business torts; all-state enforcement | Strong shield / state-law complexity |
| Dynasty / GST | ★★★★★ | Multi-generation ownership / wealth transfer | Current business liabilities | Long-term continuity / complexity |
| IDGT / Grantor Trust | ★★★★★ | Estate freeze, appreciation transfer | Income tax itself; operating liability | Excellent succession / advanced administration |
| QSST | ★★★★★ | Preserves qualifying S-Corp ownership | General creditor protection | S-election continuity / one-income-beneficiary restrictions |
| ESBT | ★★★★★ | Multi-beneficiary S-Corp succession | Corporate liabilities | Flexible beneficiaries / potentially higher tax complexity |
| ILIT | ★★★☆☆ | Life-insurance proceeds / estate liquidity | Business lawsuits | Succession funding / irrevocable |
| QTIP | ★★★★☆ | Spousal continuity / control of remainder | Estate inclusion at surviving spouse | Marital planning / limited flexibility |
| GRAT | ★★★☆☆ | Transfers future appreciation | Business creditors | Tax-efficient growth transfer / term & mortality risk |
| CRT | ★★☆☆☆ | Charitable planning, diversified asset disposition | Business liability | Tax / charitable benefits / charity receives remainder |
| Buy-Sell / Succession Trust | ★★★★★ | Death / disability ownership transition | Lawsuits or taxes by itself | Excellent continuity / requires proper funding |
Best Continuity Architecture
Owner → Trust → LLC / C-Corp / S-Corp shares → Operating business. For an S-Corp, the trust must specifically qualify under S-Corporation shareholder rules. For a sole proprietor, consider Owner → Trust → LLC → Business operations, rather than relying on the trust itself for liability protection.
These structures are highly state-, tax-, and drafting-specific, especially QSST/ESBT, DAPT, IDGT, and S-Corporation ownership.
Estate Freeze Strategies & The Rate Environment
An estate freeze locks the current value of an appreciating asset in the senior generation's estate (or removes it entirely) and shifts all future appreciation to the next generation at little or no gift tax cost. Every freeze technique is fundamentally a bet: asset growth rate vs. the hurdle rate the IRS assumes (§7520 or AFR). Beat the hurdle, the excess passes tax-free.
The August 2026 §7520 rate is 5.20%, which cuts in different directions depending on the technique — high rates hurt GRATs/GRUTs and CLATs, but actually help QPRTs. OBBBA locked the estate tax exemption at $15M per person (indexed) starting 2026, which changed the urgency calculus for freezing but not the logic — appreciation on a growing business still outruns any exemption.
QPRT — Qualified Personal Residence Trust
The grantor transfers a residence to an irrevocable trust, retaining the right to live in it for a fixed term. The taxable gift is only the remainder value, discounted by the retained term interest. At a 5.20% §7520 rate, the retained interest is worth a lot, so the discount is steep — a 60-year-old putting a $2M home in a 15-year QPRT might report a gift of only $700–800K.
The catches: If the grantor dies during the term, the full date-of-death value comes back into the estate (heads-you-win, tails-you-tie). After the term, the grantor must pay fair market rent — which is a feature, since rent is additional tax-free wealth transfer. Carryover basis is the real cost; QPRTs make most sense for properties the family will hold, not sell.
The one technique that loves the current high-rate environment.
GRUT — Grantor Retained Unitrust
The §2702 cousin of the GRAT, but the retained payment is a fixed percentage of trust value revalued annually rather than a fixed dollar annuity. That single difference kills most of the appeal: because the unitrust payout floats with asset value, appreciation increases the payments back to the grantor, so the GRUT can never be "zeroed out" the way a Walton GRAT can.
In practice: Rarely used. The main niche is hard-to-value or volatile assets where annual revaluation is tolerable. For a closely held business, the annual appraisal requirement alone usually disqualifies it. If a scenario seems to call for a GRUT, an installment sale to an IDGT almost always does the same job better.
Know why you'd say no.
CLAT — Charitable Lead Annuity Trust
The philanthropic freeze. Charity receives a fixed annuity for a term; the remainder passes to family. The gift is the remainder's present value — and mirror image of the QPRT, high §7520 rates hurt CLATs because the charitable lead interest is worth less at 5.20% than at 1–2%.
Design levers: Grantor vs. non-grantor (grantor CLAT gives an upfront income tax deduction but taxes trust income to the grantor thereafter — good for a big-income-year client); "shark-fin" backloaded payment schedules that maximize compounding inside the trust; and funding with discounted closely-held interests, stacking a valuation discount on top of the freeze.
CLAT for children. GST warning: can't allocate GST exemption efficiently — not a dynasty-level vehicle.
CLUT — Charitable Lead Unitrust
Same lead-to-charity architecture, but charity gets a fixed percentage of annually revalued assets. It cannot be zeroed out (appreciation raises the charitable payout, so remainder value never converges), making it inherently less efficient as a pure wealth-transfer freeze.
Its one genuine advantage: GST planning. Because the payout is a unitrust percentage, the applicable fraction can be fixed at funding, making the CLUT the only charitable lead vehicle that works cleanly for skip-generation/dynasty remainders.
CLUT for grandchildren. The practical decision rule: CLAT for children, CLUT for grandchildren.
How This Maps to a Client Engagement
- IDGT sale: The workhorse freeze — no §7520 dependency, uses the lower AFR, fully leverageable with discounts and GST allocation.
- QPRT: Handles the residence sleeve and is affirmatively rate-advantaged right now.
- CLAT: Enters when there's charitable intent plus either a spike income year (grantor CLAT) or a desire to pass wealth at reduced gift cost while funding a family foundation or DAF.
- GRUT & CLUT: The "know why you'd say no" options — GRUT almost never, CLUT specifically when the remainder is going to grandchildren.
This is the technical framework, but the drafting and elections (grantor trust triggers, §7520 month elections, GST allocations) need the estate attorney's hand. Watch §4943 excess business holdings rules on any lead trust holding business interests where the charitable deduction exceeded 60% of trust value.
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