Getting HEET-ed with Wealth Docx®

May 25, 2018 9:00:00 AM


As tuition and health care costs continue to soar, clients will be looking for ways to mitigate these financial burdens on their loved ones.

Planning for the future.  

One such option is a Health and Education Exclusion Trust (HEET). This type of trust gives grandparents the ability to set aside assets to be used for the health and/or educational expenses of their grandchildren and distant descendants. While the grantor’s children cannot directly receive funds, they benefit indirectly by having the trust cover their children’s educational and health care costs.

While HEETs are excellent vehicles for health and education planning, their true value lies in their multi-functionality. Philanthropically-minded clients can also choose to add a charity as an additional beneficiary. This twofold benefit allows clients both the opportunity to incorporate charitable giving into their legacy, while also avoiding generation-skipping transfer tax (GST) liability on funds that are transferred into the trust. Further GST (and gift tax) liability can be avoided on funds leaving the trust, so long as they are disbursed as “qualified transfers.” A qualified transfer pertains to funds that are directly transferred from the trust to the educational institution or medical provider.

Not only do these dual purposes make HEETs an attractive option for high net worth clients, they also provide more flexibility than other options, such as a 529 plan. Unlike a 529 plan, which is limited to only secondary education, a HEET can pay tuition costs for any educational level.

And a HEET doesn’t just benefit the client, it can also benefit the attorney that prepares the trust. As clients may wish to make changes to the trust over time—add more beneficiaries or set aside additional property for funding the trust—HEETs are a good opportunity for recurring business for attorneys. However, HEETs can be quite time consuming to create. Luckily, with tools that provide document automation and built-in adaptability, attorneys can draft HEETs and other types of estate planning documents efficiently and with the flexibility that clients require.

How Wealth Docx® helps draft trusts more efficiently, without compromising flexibility or accuracy.   

Customizable default settings

Before you start drafting with Wealth Docx, you can set your preferences to default for all document templates. Customize the default settings to reflect your practice’s needs and wants. Set your preferences for:

  • UTC provisions
  • Statutory references
  • Rule against perpetuities
  • Document naming conventions...and more

Create and reuse client scenarios

With Wealth Docx scenarios feature, you can reduce data entry by creating types of each document that reflect common client scenarios, such as married, single, individual, children, etc. Then simply pull up the detailed custom scenario for future use.

See the Wealth Docx interview and drafting process in action by downloading a sample HEET document.



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