- posted: Jul. 17, 2016
I recently met a lady in Raleigh who said that she and her husband had separate trusts drafted about 15 years ago. She wondered if they needed to be updated. I knew right away that since they were set up many years ago as separate trusts, the goal at that time was to avoid estate tax. But the tax laws significantly changed starting in 2012. Currently, the first $11 million dollars of a married couple’s assets are exempt from federal estate tax. But relying on those separate and very complex trusts, which were appropriate a few years ago, a cumbersome maze for the assets is created where a surviving spouse has lots of asset transfer to do when one spouse dies and where the surviving spouse may no longer have complete control and access to all the assets!
Old trusts that need to be reviewed and updated:
* The "Pre-Portability" Trust. Trusts written prior to 2013 required complicated estate tax planning provisions which made things burdensome when the first spouse died. These trusts required that all or a portion of the revocable trust become irrevocable upon the first death, in order to avoid estate taxes while the surviving spouse loses control of the assets. With portability provisions in our federal estate tax that were made permanent in 2013, it is often no longer necessary to have all of these complications in estate planning legal documents. Truth be told, most couples want the surviving spouse to keep complete control and access, but that usually does not happen with those pre 2013 Trusts.
* The "I Hoped My Old Trust Protected Me From Nursing Home" Trust. Historically, most people established trusts to avoid probate and estate tax. Now that they are approaching their “golden years,” their concerns have changed to losing their hard-earned assets to nursing home expenses. Because their original Trust did not address that issue, it is likely necessary to revise the old Trust in favor of a new one. Most people want a Trust that will avoid probate and prevent their home, property, and life savings from being lost to nursing home costs, which average $6,300 a month!
At the law firm of Thomas Walters, PLLC, we know that in the future, not only will laws change, but life circumstances and individuals’ concerns change. As clients, you will be a part of our Lifetime Lawyer Benefits which will allow for any future changes in your estate plan to be made at no additional cost. Call (888) 787-1913 to schedule a complimentary appointment to review your estate plan.