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MARC WEISSMAN

ESTATE PLANNER
FOSTER CITY

Estate Planning, Trusts

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After the new 2013 Tax Law, do I need a Trust?

There are several reasons to use a Trust. Taxes are only 1 reason.

If the tax free amount is $5,000,000 plus inflation and unlikely to change, we can ignore the tax benefits of a Trust for most couples. However, the one thing we know about this new law is that it will change. So we need to continue to use Trusts until the death taxes are dead for good.

Die in:Death Tax Free AmountGift Tax Free Amount
1997$600,000$600,000
1998$625,000$625,000
1999$650,000$650,000
2000
2001
$675,000$675,000
2002
2003
$1,000,000$1,000,000
2004
2005
$1,500,000$1,000,000
2006
2007
2008
$2,000,000$1,000,000
2009$3,500,000$1,000,000
2010NO TAX IF YOU DIE IN 2010
WATCH OUT FOR YOUR KIDS THIS YEAR
$1,000,000
2011$5,000,000$5,000,000
2012$5,120,000 (indexed for inflation)$5,120,000
2013
AND LATER
$5,250,000 (indexed for inflation) $5,250,000
 In 2013 we fell off the fiscal cliff (briefly), and then
the politicians fixed it.  The tax free amount is now
$5,000,000, indexed for inflation, permanently
(until they change it again).
 

The other benefits of a Trust continue, besides tax benefits.

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