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| Irrevocable Trust Options |
| Introduction |
| Generally, it is sufficient for most families to prepare a Revocable Living Trust. If they purchase new assets after they prepare a trust, they can, for example, add these assets into their current trust, as a Revocable Living Trust will permit them to revise and make changes to the trust, as long as the settlor(s) of the trust is alive. However, some families might choose to prepare an Irrevocable Trust, which might offer them certain protections e.g. reducing/avoiding payment of estate taxes, if their value of estate goes beyond the estate tax exemption amount in the U.S. This article will introduce two ("2") types of Irrevocable Trusts that are often considered for preparation in the U.S. which include the SLAT ("Spousal Lifetime Access Trust") and the QTIP ("Qualified Terminable Interest Property Trust.") |
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| What is a SLAT ("Spousal Lifetime Access Trust")? |
A SLAT is an irrevocable trust that permits a spouse to make a gift to such trust for the benefit of the other spouse, which has the effect of diminishing the married couple's total estate, thereby aiding them in reducing federal and state estate tax payment obligations. The gift made to the irrevocable trust is not taxed because the spouse who makes the gift uses his/her gift and estate tax exemption when doing so.
For example, say a married couple has assets that total $30 million. If both spouses transfer $13.61 million each (which is the federal estate tax exemption amount in 2024) into two ("2") SLATs that benefit each other, they will be able to take out $27.22 million in full from their taxable estates, while still benefiting from the gifts made to SLAT e.g. both spouses might receive distributions of income and principal from the trust. They would then have $2.78 million remaining in combined assets, in addition to their SLAT income and principal distributions, to support their needs during their lifetime. |
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| What is a QTIP ("Qualified Terminable Interest Property Trust")?
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A QTIP trust permits the grantor of the trust to specify the distribution of trust income and sometimes the principal to the surviving spouse to make sure that he/she is cared for during his/her lifetime, and to designate the final beneficiaries of the remaining assets after the death of the surviving spouse.
A QTIP trust can be a good estate planning tool for ensuring that a spouse continues to have income during his/her lifetime, but at the same time, for making sure that the designated final beneficiaries succeed to the remaining assets in the trust, even if the surviving spouse gets remarried or has children from a former relationship. A QTIP trust can be a good trust to prepare for families that have experienced divorce or remarriage, and have children from a previous marriage as well as any stepchildren from a subsequent marriage. |
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| Conclusion |
| Even though a Revocable Living Trust might work for most families, it can be good to discuss other options e.g. Irrevocable Trusts with your lawyer that might be a good fit for your family situation. |
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| Attorney Yuka Hongo Included in Marquis Who's Who |
| Attorney Yuka Hongo has been included as an honored listee in Marquis Who's Who for 2024. Factors such as noteworthy accomplishments, position, visibility, and prominence in a field are all taken into account during the selection process. Marquis has chronicled the lives of accomplished individuals and innovators since 1898. Read more about Attorney Hongo's inclusion here. |
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| Client Comments |
| "Lawyers in the U.S. can be difficult to talk to at times, but I think people find it easy to talk to Ms. Hongo. I also like the fact that Ms. Hongo follows up with her clients on a timely basis." |
| Sachiko Trillo, Honolulu |
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| "Hongo Tsuji Tax & Consulting, our accounting firm, introduced me to Ms. Hongo. I consulted her with regards to estate planning, and I appreciated the fact that she took care of our documents in a timely manner." |
| K.A., Tokyo |
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| "I appreciated Ms. Hongo's professional expertise and the kind way in which she took care of our matter. I am truly happy that she helped us." |
| Mitsuko Seto, Osaka |
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| "Ms. Hongo not only prepared my trust, but also took care of legal matters involving my company. Her fee is reasonable and she follows up with you in a timely manner." |
| S. Suzuki, Company Owner |
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| "Ms. Hongo took care of our matter in a kind manner. We liked the fact that her office was located in Waikiki, near our home." |
| Sugiyama, Waikiki |
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| "I became a successor to 2 condominiums that my wife owned in Hawaii, after my wife passed away. Ms. Hongo took care of our probate matter in a short timeframe of 1 year. We feel very grateful to her." |
| Shuichi Sakamoto, Nasu |
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| "Our clients were very satisfied with Ms. Hongo's service because she was able to explain matters such as probate in an easy-to-understand manner. Ms. Hongo is someone we can rely on for any matter." |
| Noboru Ohhashi, List Sotheby's, Tokyo |
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| "Given that the U.S. real estate recording process and its pertaining laws differ from those of Japan, and it is difficult to learn about them in English, I appreciated Ms. Hongo being able to explain them to me in an understandable manner. I would like to seek her help in the future for other matters." |
| K. Iwasaki, Honolulu |
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| "Ms. Hongo helped me with the estate planning for my real estate in Hawaii. I was glad she was able to help me during her visit in Japan." |
| S.T., Kawasaki |
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| "It was our long-term goal to prepare a trust for our family. We are now able to take the next step in our lives, as Ms. Hongo applied her proficient bilingual skills to efficiently take care of our matter. We are very grateful for what she did for us." |
| A.P., Honolulu |
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| Attorney Yuka Hongo has been included as an honored listee in Marquis Who's Who for 2024. Marquis has chronicled the lives of accomplished individuals and innovators since 1898. |
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| Hongo Law Office LLLC is proud to have been acknowledged as one of the "Best Probate Attorneys in Honolulu for 2024" by Expertise.com. |
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| Attorney Yuka Hongo has been named a 2023 Elite Lawyer in the area of Estate Planning in Hawaii. The award recognizes attorneys who have displayed a high level of competence in their practice. |
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| You're invited to call or email |
"If you have questions about estate planning and administration, please don't hesitate to call. I'll be glad to hear from you." – Yuka
Call (808) 237-9944 or email yuka.hongo12@gmail.com |
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| Meet Yuka Hongo, Esq. |
| Yuka Hongo is a respected estate planning attorney based in Honolulu, Hawaii. She has practiced law for 10 years and is fluent in both English and Japanese. |
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Practice Areas: Yuka represents clients in matters related to estate planning such as the preparation of trusts, wills, and Transfer on Death Deeds. She also provides a service in the area of estate administration, including probate.
Education: In 2000, Yuka graduated from Oberlin College (Oberlin, OH), where she earned a Bachelor of Arts Degree in Economics and East Asian Studies. In 2004, she graduated from Loyola Law School (Los Angeles, CA), where she earned her Juris Doctor Degree. In 2022, Yuka graduated from Keio University (Tokyo, Japan) where she earned a Master of Laws Degree.
Court Admissions and Bar Memberships: Yuka is a member of the Hawaii, California, the District of Columbia Bar, and New York Bar Associations. Yuka is a member of the International Law Section of the Hawaii State Bar.
Additional Qualifications: Yuka is a Certifying Acceptance Agent who can obtain the ITIN tax number for foreigners in the U.S. In addition, she is a life insurance agent and a licensed notary public in Hawaii. Also, Yuka is fully bilingual in Japanese and English and has in-depth experience including complicated translations working with both languages.
Multicultural Background: Yuka has experience living and working in both the U.S. and Japan and has a thorough understanding of both cultures and the people who live in both countries. In addition, she loves working with people from other multicultural backgrounds, and working on international matters.
Accounting Experience: Yuka worked for the Tokyo office of a prominent U.S. accounting firm for the past number of years and has extensive experience working with tax and legal issues that arise from cross-border transactions.
Educational Presentations: Yuka has presented seminars in Japan relating to Transfer on Death Deeds in Hawaii and trusts in the United States.
Residence & Interests: Yuka lives in Honolulu, Hawaii and is single. She enjoys scoping out new eateries and restaurants. |
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