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Protecting Your Legacy

Guided Inheritance Distribution

A common misconception is that trusts, and estate planning in general, are only for the wealthy. The truth is that many families can benefit. Wealth transfer is simply making sure what you have built ends up with the people and causes you care about, with as little as possible lost to taxes, court costs, and confusion.

This page walks through the main tools: how trusts work, keeping your beneficiaries current, strategies to lower estate taxes, charitable giving, planning across generations, and coordinating with the attorney who puts it all in writing. As with retirement, these decisions are best made with your financial advisor, your attorney, your CPA, and your family together, because a legacy is a family matter, not just a financial one.

Trust Planning Beneficiary Review Estate Tax Charitable Giving Generational Planning Attorney & CPA Estate Planning Questions

Trust Planning

Control and protect your assets with a trust. Used well, a trust lets you decide who gets what, when, and how, both while you are alive and after you are gone.

What is a trust?

A trust is a legal arrangement built around three roles. The person who creates it and puts in the assets is the grantor. The grantor transfers legal title of an asset into the trust for the benefit of one or more beneficiaries, and the trust is managed by one or more trustees. A trust can be created while you are living, or written into your will to take effect at your death.

Revocable vs. irrevocable

Trusts come in two basic types, and the difference drives the taxes. A revocable trust can be changed or cancelled at any time, so the IRS still counts its assets as part of your taxable estate, and you still pay income tax on what it earns. An irrevocable trust cannot be changed once it is executed; the assets are permanently moved out of your estate and into the trust, which pays its own income and capital gains taxes, and those assets are generally not subject to estate tax at your death. Most revocable trusts automatically become irrevocable when the grantor dies or becomes incapacitated.

The role of the trustee

The grantor names a trustee to manage the trust's investments and assets. You can stay involved in the major decisions, or give the trustee full authority to act on your behalf. A trustee can be an individual you trust, or a professional or corporate trustee. Either way, a trustee has a fiduciary responsibility, a legal duty to act in the best interest of the trust and its beneficiaries. When a professional or corporate trustee is the right fit, we can help you get there (see the coordination section below).

What a trust can do

Although trusts can be arranged in many ways, they are most often used to:

Most people use a trust to stay in control of their assets while they are alive and well, and to keep that control in trusted hands if they become unable to act for themselves or pass away.

The living trust

If your goals are privacy, centralized control, and avoiding probate, a living trust is a common starting point. You can serve as both the trustee and the beneficiary while you are alive, keeping full control and receiving all the income. If you become incapacitated, your co-trustee or successor steps in to manage things. At your death, your successor trustee distributes what remains according to your instructions, without the delay and public record of probate.

Points to remember

  • Trusts are either revocable or irrevocable.
  • A revocable trust can be changed at any time, so its assets count as part of your estate for taxes.
  • An irrevocable trust cannot be changed once established, so its assets are generally not part of your estate for taxes.
  • Common types include the Living Trust, Generation-Skipping Trust, Charitable Lead Trust, Charitable Remainder Trust, and Irrevocable Life Insurance Trust.
  • Different trusts carry different setup and management costs.
  • Your financial advisor can help you decide whether a trust fits your needs; an attorney drafts it.

Trusts must be drafted by a qualified attorney. This section is for informational purposes only and is not legal advice. Please seek the advice and services of an attorney regarding the creation of a trust and your personal situation.

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Beneficiary Review

Some of the most important decisions in your estate plan are not in your will at all. The beneficiary designations on your retirement accounts, annuities, and life insurance control who inherits those assets directly, and they override whatever your will says. That makes keeping them current one of the simplest, and most overlooked, pieces of a legacy plan.

A few mistakes show up again and again: naming your estate instead of a person (which can send the asset through probate and speed up the tax bill), leaving a form blank so an old default applies, naming a minor with no trust or guardian in place, or forgetting a backup beneficiary. Each is easy to fix now and expensive to fix later.

Review your beneficiaries after every major life change, a marriage, a divorce, a birth, or a death, and make sure they line up with the rest of your plan. When minor children or a family member who needs help managing money are involved, naming a trust as the beneficiary is often the safer route, so the money is released with guidance rather than all at once.

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Estate Tax Strategies

Good news first: most families will not owe federal estate tax. In 2026, each person can pass roughly $15 million during life or at death before the federal estate and gift tax applies, and a married couple can combine their exemptions. Above that threshold, the federal rate reaches about 40%.

A few things still deserve attention even under that generous limit. Several states levy their own estate or inheritance tax at much lower thresholds, so where you live matters. And assets you leave at death generally receive a step-up in cost basis, which can erase built-up capital gains for your heirs. That is an important reason not to simply give everything away during your lifetime.

Where an estate is large enough to face a tax, irrevocable trusts do the heavy lifting by moving assets out of your taxable estate. One common tool is the Irrevocable Life Insurance Trust (ILIT): you make gifts to the trust, the trust uses them to buy a life insurance policy on you, and at your death the death benefit pays into the trust and gives your heirs tax-free cash to cover any estate tax bill, without having to sell the family business or property to raise it.

Estate, gift, and generation-skipping tax figures are set by federal law and are subject to change; the amounts shown are for 2026 and are illustrative. Several states impose their own estate or inheritance taxes. This is educational information, not tax or legal advice. Please consult a qualified tax or legal professional about your situation.

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Charitable Giving

Giving can be part of your legacy and part of your tax plan at the same time. A few structures let you support the causes you care about while managing taxes, and in some cases keeping an income stream for yourself:

Highly appreciated assets, the ones with the biggest built-in tax bill if you sold them, are often the best to give, because the tax savings are largest. Which vehicle fits depends on your goals, your assets, and how much control you want to keep.

This is educational information, not tax or legal advice. Charitable structures have specific rules and costs. Please consult a qualified tax or legal professional about your situation.

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Generational Planning

Passing wealth to grandchildren, or further down the line, comes with its own rules. The generation-skipping transfer (GST) tax is designed to tax wealth that skips a generation, but each person has a GST exemption (about $15 million in 2026, the same as the estate exemption) that can pass assets to grandchildren free of that extra layer of tax. A Generation-Skipping Trust is built to make the most of that exemption.

Planning across generations is not only about taxes, though. It is about timing and readiness: whether to give during your lifetime or at death, how to protect an inheritance from a young heir's inexperience (or a future divorce or creditor), and how to pass along your values right along with your assets. A well-drafted trust can release money gradually, tie it to milestones, or keep it protected, so a legacy helps the next generation rather than harms it.

If retirement accounts are part of what you will leave, remember the inherited-IRA rules changed: most non-spouse heirs must empty an inherited IRA within 10 years. We cover that in more detail on our Retirement Planning page.

Generation-skipping and estate tax figures are set by federal law and are subject to change; the amount shown is for 2026 and is illustrative. This is educational information, not tax or legal advice. Please consult a qualified professional about your situation.

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Coordination With Your Attorney and CPA

Here is an honest boundary: we do not draft legal documents, and you should be wary of anyone in our seat who claims to. Wills and trusts are written by attorneys, and tax elections are confirmed by CPAs. What we do is quarterback the financial side, making sure your accounts, beneficiaries, titling, and investments are coordinated so the plan your attorney drafts actually works the way it is meant to. A beautiful trust does nothing if the accounts were never retitled into it.

The core documents to have in place

Alongside any trust, most people need a few basic documents, and your attorney can prepare them:

Most people need all three, and they work hand in hand with a trust.

Access to professional trust services

When a professional or corporate trustee is the right fit, we can offer access to trust services provided by The Private Trust Company N.A., an affiliate of LPL Financial. That gives you an experienced, independent trustee to administer the trust, coordinated alongside the rest of your plan.

This page is for informational purposes only and is not legal or tax advice. Please seek the advice and services of a qualified attorney regarding the creation of a trust and your personal situation. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

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Estate Planning: Common Questions

Straight answers to common questions about wills, trusts, probate, and estate taxes, drawn from the IRS, the CFPB, FINRA, the National Institute on Aging, and state revenue departments.

Wills, Trusts and Probate

How do I make a will, and what happens if I die without one?

A will is a legal document that says how your property, money, and other assets will be distributed when you die. It can also address the care of children under age 18, gifts, and funeral arrangements. Because a will is a legal document, the Consumer Financial Protection Bureau suggests considering an attorney to set one up. If you die without a will, your money and property are distributed based on the laws of your state, not necessarily the way you would have chosen.

What is probate, and can my assets avoid it?

Probate is a formal legal process that recognizes your will and appoints an executor or personal representative to distribute your property. It is a public process, and it can be expensive and lengthy. Having a will makes probate simpler and faster. Some assets can pass outside of probate, such as property held in a living trust and brokerage accounts with a transfer-on-death (TOD) registration.

Do I need a will or a trust?

It depends on your situation. A will directs who receives your property and can address the care of minor children, but property passing under a will may have to go through probate. The main advantage of a living trust is that property held in the trust does not pass through probate. Trusts are complex legal arrangements that are typically more complicated and expensive to create than a standard will, and a trust only covers the money or property you actually move into it. An estate planning attorney can help you decide what fits your situation.

What is a living trust, and what is the difference between revocable and irrevocable?

A living trust is a legal arrangement you create during your lifetime. You move money or property into it, and a trustee manages it for the beneficiaries you name. While you are alive, you are generally your own trustee, and you can name a successor trustee to step in if you die or can no longer act. A revocable living trust can be changed or canceled, lets you keep control of your assets, and can help your heirs avoid probate. An irrevocable trust can't be changed or revoked once it is established. It can offer potential tax advantages and protection from creditors, but you typically give up some control, it is more complex, and it may have gift tax consequences.

Planning for Incapacity

What is a power of attorney?

A power of attorney is a legal document that lets someone you choose, called your agent, act on your behalf. A financial power of attorney can cover things like paying bills, selling property, and handling other business. When it is used for advance planning, it is generally durable, meaning it stays in effect if you become incapacitated. A durable power of attorney for health care is a separate document that names someone to make medical decisions if you cannot communicate them yourself. Without a power of attorney, a friend or family member might have to go to court to have a guardian appointed, which can be lengthy, expensive, and very public. Because an agent has broad authority, choose someone you trust; working with a lawyer can help protect against abuse.

What is a living will?

A living will is a legal document that tells doctors how you want to be treated if you cannot make your own decisions about emergency treatment. You can say which common medical treatments you would want, which you would want to avoid, and under which conditions each choice applies. It is different from a regular will, which covers your property after death. The two most common advance directives are a living will and a durable power of attorney for health care, and the National Institute on Aging suggests reviewing them at least once a year and after a major life event.

Beneficiaries and Inherited Accounts

Do beneficiary designations override my will?

Yes. A transfer-on-death (TOD) registration or other beneficiary designation controls who inherits that account, even if your will says something different. For example, if your will divides brokerage assets equally between two children but the TOD names only one child, that child alone receives the assets and is not obligated to share them. That is why the beneficiaries named on your retirement accounts, life insurance, and investment accounts should be reviewed so they match your current wishes.

What are the rules for an inherited IRA?

It depends on who inherits. A surviving spouse can elect to treat an inherited IRA as their own. For IRA owners who died after 2019, most other beneficiaries must withdraw the entire balance by the end of the 10th year after the owner's death. The 10-year rule has exceptions for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person, and a person not more than 10 years younger than the owner. If the owner had already reached their required beginning date for minimum distributions, beneficiaries generally must also take a required minimum distribution each year. A non-spouse beneficiary can't treat the account as their own or roll it into their own IRA, but the assets can be moved by trustee-to-trustee transfer into an inherited IRA kept in the owner's name for their benefit. You generally won't owe tax on an inherited traditional IRA until you take distributions from it.

Gift and Estate Taxes

How much can I give away tax-free in 2026?

In 2026 the annual gift tax exclusion is $19,000, and it applies to each person you give to. Each spouse has their own exclusion, so a married couple can give a combined $38,000 to the same person; splitting a gift between spouses requires filing a gift tax return. Tuition or medical expenses you pay for someone, and gifts to your spouse, are generally not taxable gifts. If you give someone more than the annual exclusion, you generally must file a gift tax return (Form 709), whether or not any tax is ultimately due. Larger gifts use part of your basic exclusion amount, which is $15,000,000 for 2026, and the person making the gift is generally responsible for any gift tax.

Will my estate owe estate or inheritance tax?

For deaths in 2026, a federal estate tax return is generally required only if the gross estate, plus certain lifetime taxable gifts, is worth more than $15,000,000. Property passing to a surviving spouse or to qualified charities can be deducted, and a surviving spouse may be able to use any unused exemption through a portability election made on a timely filed estate tax return. Mississippi has not required an estate tax return since January 1, 2005, and it has no inheritance tax or gift tax. Tennessee's inheritance tax is no longer imposed for deaths after December 31, 2015. Other states have their own rules, so where you live matters.

Sources: IRS: Estate Tax, IRS: Gift Tax FAQs, IRS: Instructions for Form 709, IRS: Publication 590-B, IRS: Required Minimum Distribution FAQs, CFPB: What Is a Power of Attorney?, CFPB: What Is a Revocable Living Trust?, CFPB: Leaving Your Home to Your Children or Other Heirs, FINRA: Transferring Brokerage Assets on Death, FINRA: Investment Accounts, National Institute on Aging: Getting Your Affairs in Order, National Institute on Aging: Advance Directives, Mississippi Department of Revenue: Estate, and Tennessee Department of Revenue: Inheritance Tax.

This information is general and educational and is not legal or tax advice. Wills, trusts, powers of attorney, and probate are governed by state law, which varies, so please work with a qualified estate planning attorney to prepare these documents. Tax figures are for 2026 and are subject to change.

Champion Wealth Management and LPL Financial do not provide legal advice or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.

Let's make sure your legacy lands where you intend.

Whether you already have a plan or are starting from scratch, we will help you organize it, coordinate it with your attorney and CPA, and keep it current as life changes. Give us a call and let's talk about what matters most to you.

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