Trust planning is choosing the right vehicle, sizing it against your tax and estate strategy, and handing your attorney a blueprint that gets funded. K&K coordinates the structural decisions behind the trust so the document your attorney drafts actually does the work it was set up to do, instead of sitting in a drawer while the assets stay in your name.
Trust planning is the strategic work of deciding which type of trust (or combination of trusts) belongs inside your estate plan, how each one is funded, who controls it, and how it interacts with your tax, wealth, and risk plans. The legal document (the trust agreement itself) is the visible output. The structural decisions behind it (revocable or irrevocable, who serves as trustee, which assets get titled into it, how distributions are timed, how it sits against the lifetime exemption) are the actual work.
That structural work is where most "I have a trust" setups go sideways. A revocable trust drafted at age 40 and never funded does nothing when the grantor dies. An irrevocable trust funded without modeling the gift tax implications can trigger a tax event the client never saw coming. A special needs trust drafted without coordinating Medicaid and SSI eligibility rules can disqualify the very beneficiary it was meant to protect.
Trust planning at Kotini & Kotini sits in the seat above the document. We design the strategy. Your partner attorney drafts the trust. Your CPA stays in the loop on the tax treatment. Your wealth manager keeps the portfolio aligned with the funding plan. Inside our Virtual Family Office model, the trust stops being a stand-alone instrument and becomes a piece of a coordinated Estate & Legacy Planning hub strategy.
The trust universe is wider than most clients realize, and the right vehicle depends entirely on what the trust is supposed to do. A few of the structures that come up most often in the planning work we do:
The everyday workhorse. You retain control during your lifetime, the trust avoids probate at death, and you can amend or revoke it any time. Strong on probate avoidance and privacy; weak on asset protection and estate tax mitigation, because the assets remain in your taxable estate.
Once funded, you give up control of the assets. In exchange, the assets move out of your taxable estate, gain creditor protection, and can support more advanced planning goals. The tradeoff is control. Sub-types include grantor trusts, non-grantor trusts, and dynasty trusts depending on the planning objective.
Designed to support a beneficiary with a disability without disqualifying them from means-tested benefits like Medicaid and SSI. Requires careful drafting and tight coordination with the rest of the family's estate plan.
Charitable remainder trusts (CRTs) and charitable lead trusts (CLTs) tie philanthropic intent to tax efficiency. Most useful in concentrated-asset and high-income years. The charitable giving page covers these in depth.
Holds a life insurance policy outside your taxable estate so the death benefit isn't pulled back in. Useful when policy values are large enough to push the estate over the lifetime exemption.
An irrevocable trust funded by one spouse for the benefit of the other, used in advanced estate-tax mitigation, particularly relevant ahead of the lifetime exemption sunset.
The structure is never the goal. The goal is matching the trust to a real planning objective: probate avoidance, asset protection, estate tax mitigation, special needs support, charitable intent, or generational wealth transfer. We design from the objective backward.
This is the most common decision point inside trust planning, and there is no universal answer. The right choice depends on whether you value control or protection more, and how those tradeoffs interact with your tax and estate goals.
A revocable trust keeps everything flexible. You can change beneficiaries, change trustees, pull assets out, and rewrite the terms at any point during your lifetime. It avoids probate, keeps your estate private, and is easy to maintain. What it does not do is shield assets from creditors or remove them from your taxable estate. For families well under the lifetime exemption with no significant creditor exposure, the revocable trust is often the right tool.
An irrevocable trust trades control for protection. Once you fund it, the assets are no longer yours in the legal sense. They sit outside your estate for tax purposes, they're generally protected from your creditors, and the structure can support more advanced strategies (dynasty planning, gift-tax-efficient transfers, ILIT structures). The cost is that you cannot reach back in. For families approaching or above the lifetime exemption, families with meaningful creditor or liability exposure, or families running asset protection planning alongside the estate plan, irrevocable structures often earn their place.
The real planning question isn't "revocable or irrevocable" in isolation. It's "what mix of structures, sized against the rest of your plan, gets you to the outcome you actually want?" That's a coordination question, not a document question. We work it with your existing estate planning attorney, your CPA, and your wealth manager, then hand the attorney a clear instruction set to draft against.
The 5% rule is the unitrust distribution standard most commonly associated with charitable remainder trusts. Under it, the trust must pay out at least 5% of the trust's total value each year to the income beneficiary, with the value typically recalculated annually. The charitable remainder receives whatever is left when the trust terminates.
The rule shapes how a charitable remainder trust gets sized and funded. Distribute too much and the income stream is unsustainable; distribute too little and the structure may not qualify under IRS requirements. Inside coordinated planning, the 5% threshold also interacts with your advanced tax planning calendar, your charitable giving timeline, and (often) the way appreciated assets are positioned inside your portfolio. Other trust types use different distribution standards; the 5% rule specifically belongs to the CRT family.
In charitable remainder trusts, the 5% rule sets the minimum annual payout to the income beneficiary at 5% of the trust's value (typically recalculated each year). It controls how the income stream is sized against the charitable remainder. Other trust types use different distribution rules. The 5% standard is specific to the CRT family and matters most in charitable and concentrated-asset planning.
Trusts cost more to set up and maintain than a simple will, and irrevocable trusts in particular require giving up direct control of the assets you fund into them. There's also ongoing administration: titling, trustee duties, tax filings for some trust types. Our job is to make sure the planning benefit clearly justifies the cost and complexity before we recommend the structure.
The most common four are revocable living trusts (probate avoidance and control), irrevocable trusts (estate tax mitigation and asset protection), special needs trusts (preserving benefits eligibility for a disabled beneficiary), and charitable trusts (CRTs and CLTs that tie giving to tax efficiency). Each serves a distinct objective, and many families use more than one in combination.
It depends on the goal. Gifting outright uses lifetime exemption and may trigger gift tax reporting, and the recipient inherits your cost basis. A trust (revocable or irrevocable depending on intent) can avoid probate, support asset protection, and structure the transfer over time. We model both scenarios alongside your CPA before recommending a path.
Four show up most often. Creating the trust and never funding it (so it does nothing at death). Choosing the wrong trustee. Failing to update the trust after marriage, divorce, a new child, or a major asset change. And building the trust in isolation, so the tax, estate, and wealth plans never get coordinated against it.
or call (804) 372-8307. The mutual-fit conversation walks through your current estate documents, your tax exposure, and your legacy goals, and gives you an honest read on which trust structures (if any) belong inside your plan.
Important disclosure: Kotini & Kotini does not provide legal advice and does not draft legal documents. Trust agreements and all related legal services are provided by credentialed partner attorneys operating in their licensed capacity. K&K designs the trust strategy and coordinates it across your tax, wealth, and risk plans, then hands the attorney a clean blueprint to execute against. See our disclosures page for the full description of the coordination model and partner relationships.
