Estate Taxes and Revocable Trusts

A living trust DOES NOT provide any estate tax advantages.  Its primary purpose is to keep your property out of probate.

The current thresholds required to trigger a federal estate tax are very high - nearly $5.5 million for single individuals and by including A/B provisions in your living trust, almost $11 million for married couples.  As a result, few individuals have significant enough wealth to worry about triggering a federal estate tax liability.

The online platform will automatically create the A/B Provisions designed to save on estate taxes by leaving some property to irrevocable “B” trust , but allowing the surviving spouse to use it (and any income it produces) during their lifetime. That way, the surviving spouse does not legally own the property, and it won’t be subject to estate tax at their death.

Some states also impose taxes on property transferred because of death.  Given the extremely high federal exemptions, it is more likely that you will trigger death taxes at the state level than you will pay a federal estate tax.