Sherry Radmore Discusses Whether Trusts Still Matter If The Estate Tax Is Repealed
There’s been quite a bit of chatter about President Trump’s proposed tax plan. On June 21st President Trump covered a wide range of topics at the U.S. Cellular Center in Cedar Rapids. The
The “death tax” was a serious issue when the value exempted from that tax started out at $60,000. In recent years, the exemption has expanded where a couple can now transfer at least $11 million to their children (or anyone else) without paying estate tax or $5.49 million if you’re an individual. With both the House and Senate currently controlled by Republicans, most people believe that the repeal of the estate tax is certain to pass. If Congress truly intends to eliminate the federal estate tax, do you still need a trust?
The following are some benefits of trusts:
- Avoiding Probate – The benefit of having a trust is not having to settle an estate after someone dies. A trust gives beneficiaries immediate access to trust funds. If you have real estate property in more than one state, a trust is beneficial because you can avoid more than one probate proceeding. A probate proceeding alone can be time consuming and expensive.
- Disability Protection – If you become disabled, the trustee can manage your finances without having to get a conservatorship or guardianship. Assets held in a living trust can be available immediately to pay estate taxes, bills and other related costs without waiting for the court’s approval.
- Control over the distribution of assets – A trust allows you to decide how your assets will be distributed rather than leaving the decision up to a beneficiary. You can also direct how funds in the trust can be spent on a beneficiary.
- Caring for beneficiaries with special needs – A special needs trust allows a beneficiary with special needs to receive funds from the trust without losing eligibility for government programs.
- Protection from creditors – A trust that is properly structure can ensure that creditor do not have access to the trust. A trust will protect your intended beneficiary if he/she is the target of a lawsuit or gets divorced.
Estate tax repeal for the wealthy may never happen, but the estate tax has already been repealed for 99% of Americans as a result of the federal exemption being $5.4 million. If the estate tax does in fact get eliminated, families will still need trusts. Trusts offer a long list of non-tax-related benefits regardless of what happens to the federal estate tax.
For more information on estate planning contact Sherry Radmore at 714.569.1000 or [email protected].
