Berdon Blogs

T&E TALK: A Helping Hand - Addressing Your Parents in Your Estate Plan

Posted by Marco Svagna, CPA on Feb 8, 2016 11:00:00 AM

The “sandwich generation” – those who are caring for both their children and their parents at the same time – comprise a large segment of the population. As a result, estate planning — which traditionally focuses on providing for one’s children — has expanded in many cases to include one’s aging parents as well.

Trust-based strategies
There are many trust-based strategies you can use to assist your parents. For example, in the event you predecease your parents, your estate plan might establish a trust for their benefit, with any remaining assets passing to your children when your parents die.

Another option is to set up trusts during your lifetime that leverage your $5.45 million gift and estate tax exemption. Properly designed, these trusts can remove assets — together with all future appreciation in their value — from your taxable estate. They can provide income to your parents during their lives, eventually passing to your children free of gift and estate taxes.

Plan with caution
As you review trust strategies and other options for assisting your aging parents, try not to overdo it. If you give your parents too much, the assets could end up back in your estate and potentially exposed to gift or estate taxes. Also, keep in mind that certain gifts could disqualify your parents from certain federal or state government benefits.

Interested in including your parents in an estate plan? Contact me at or your Berdon advisor us to discuss additional options.

Marco Svagna, a tax partner at Berdon LLP, advises high net worth individuals and family/owner-managed business clients on estate and income tax issues, succession and financial planning, and other matters relating to the preservation of wealth.

Topics: T&E TALK

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