With the end of the year fast approaching, now is the time to fine tune your estate plan before you get caught up in the chaos of the holiday season. One area that married couples should revisit is their estate tax planning.
Do You Still Have “AB Trust” Planning in Your Estate Plan?
If you’re married and you haven’t had your estate plan reviewed since before January 2, 2013, by an experienced estate planning lawyer, then pull your documents out of the drawer, dust them off, and take a closer look at their trust provisions. Do they contain terms such as “Marital Trust,” “QTIP Trust,” “Spousal Trust,” “A Trust,” “Family Trust,” “Credit Shelter Trust,” or “B Trust”?
If so, then your revocable trust contains estate tax planning provisions that were required in most estate plans before January 2, 2013. Now, you may not need this type of planning since the federal estate tax exemption has been fixed at $5 million per person adjusted for inflation (the exemption is $5.34 million in 2014 and expected to increase to $5.42 million in 2015).
Aside from this, the federal estate tax exemption is also “portable” between married couples (including legally married same-sex couples), meaning that when one of a married couple dies, the survivor may be able to get the right to use their deceased spouse’s unused estate tax exemption and so, without any complicated estate tax planning, pass $10 million+ to the deceased spouse’s heirs and the survivor’s heirs federal estate-tax free.
Do You Still Need “AB Trust” Planning in Your Estate Plan?
With that said, do you still need to include “AB Trust” estate tax planning in your estate plan? The answer to this question depends on several factors, including:
Are the combined estates of you and your spouse under $5 million?
Does your state still collect a state estate tax?
Do you and your spouse have different final beneficiaries of your estates?
Do you and your spouse want to create a dynasty trust that will continue for many generations?
In addition, there are many other factors and options to consider that an experienced estate planning attorney can explain.
What Should You Do?
If you’re married and your current estate plan includes “AB Trust” planning but you’re not sure if you should keep it in your plan, then make an appointment with an experienced estate planning attorney to discuss all of your options.
If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.
