With Republicans in control of Congress and the presidency, there is talk of eliminating the federal estate tax, which in 2017 affects only estates over $5.49 million, fewer than 1 percent of estates. With no estate tax, do you still need a trust?
Although the vast majority of Americans have estates that fall under the estate and gift tax exemption, the exemption is set to be cut in half in 2026. Proper planning may be necessary to make sure you are taking full advantage of the current exemption and aren’t negatively affected when it decreases.
Credit shelter trusts are a way to take full advantage of state and federal estate tax exemptions. Although such trusts may appear needless unless you are a multi-millionaire, there are still reasons to create them.
Gifting assets to your grandchildren can do more than help your descendants get a good start in life — it can also reduce the size of your estate and the tax that will be due upon your death.
Congress sets the amount that an individual can transfer tax-free either during life or at death. The current estate tax exemption is so high that very few estates will have to pay an estate tax.
