Have You Reviewed Your Trust Recently?

A common estate planning strategy prior to 2012 was to set up an “A-B” Trust distribution that created a Bypass Trust upon the death of the first spouse. The primary purpose of the Bypass Trust was to maximize a married couple’s total estate tax personal exemption. In 2012, though, the federal estate tax laws were substantially revised and, for most couples, simplified. Today, in most cases the “A-B” Trust distribution and creation of a Bypass Trust on the death of the first spouse is now no longer necessary to maximize a couple’s total estate tax personal exemption. Most surviving spouses may now use the unused portion of the deceased spouse’s estate tax personal exemption amount under the concept of “portability.” This does require the filing of an Estate Tax Return (Form 706) on the death of the first spouse even if no estate tax is due.

The estate tax personal exemption amount was also significantly increased with the change in the law, with the exemption set at $5,540,000 per person in 2016. So, with proper planning (that is much simpler than under the old law) most folks will not pay any estate tax.

Qualified Real Estate Attorneys in Oakland, Castro Valley, and Pleasanton

Many estate plans created prior to 2012 should be reviewed and possibly amended to take advantage of the simplicity of the new law. The attorneys at Poniatowski Leding Parikh are qualified and available to answer your questions regarding estate planning, trusts, probate and trust administration.