Why Do I Need a Trust?

Gifts with strings attachedThe estate and gift tax elements of the American Taxpayer Relief Act extended the favorable rules that were previously in place.  

The $5 million exemption, adjusted for inflation, was made permanent as were the rules on portability of the exemption for married couples (i.e. $10 million per couple). Therefore, very few of us will have an estate tax liability. This fact seems to have foster the myth that trusts are now only required for the very wealthy, something that CNBC's article, “What's the difference between an inheritance and a trust?”,  unfortunately continues to perpetuate. The truth is that the avoidance of estate tax was always only one of myriad reasons to create a trust. Most of those reasons remain very relevant, particularly as baby boomers begin to retire. A trust based estate plan is very definitely something you must consider.  

Now that the estate tax issue is all but solved for most of us, I can focus even more of my attention on how to assist my clients and their beneficiaries avoid paying unnecessary income and capital gains taxes. A properly drafted trust can be the perfect vehicle to ensure that inherited assets not only receive a step-up in cost basis but that this inheritance is provided with much needed asset protection, something likely needed in our litigious society.  The proverbial having your cake and eating it too scenario that a trust provides is what makes it such an invaluable estate planning tool. 

A trust is also one of the most powerful methods of managing assets, not just for the Trustmakers but for their children and other beneficiaries, both during the Trustmakers’ lifetime (incapacity) and at their death. A trust makes it possible to transfer assets to children and other beneficiaries in a controlled manner, allowing the Trustee to manage how to make assets available to beneficiaries regardless of what might put those assets at risk; think special needs, creditor issues or divorce. Even if these issues did not existed when drafted, nevertheless, the trust provides solutions.

As it is with any plan in life, when creating an estate plan you must first examine your goals and objectives. Then sit down with an experienced estate planning attorney to see what types of trusts can help you meet those goals.  We will be happy to send you a “Estate Planning Priorities Quiz” or you may register online for a consultation.  Join us for one of  our workshops so that you can stay informed of important topics to you and your loved ones.

Reference: CNBC (July 6, 2016) “What's the difference between an inheritance and a trust?”


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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
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Thank you, Walt and the Zaremba Team

Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.