For married couples, a marital trust can be a valuable estate planning tool. Placing assets into a trust generally keeps those assets out of probate, providing an excellent advantage in estate planning. Marital trusts have an additional advantage. Assets placed in the marital trust benefit your spouse after you die, while avoiding federal taxes on estates until the benefitted spouse’s death. Therefore, there are both probate and tax advantages to establishing a marital trust. However, marital trusts are not appropriate for every couple, and the terms of a marital trust must be carefully crafted. The Palm Beach estate planning attorneys at Kitroser & Associates possess extensive estate planning knowledge and skill, coupled with the personal attention necessary to strategically guide you through all types of estate planning matters, including marital trusts.
Marital trusts are not for everyone. Federal estate taxes only apply to high-value estates, at least for now, and may apply if your estate is taxed by a state other than Florida. A marital trust is a technical term for a tax-deferred trust which qualifies for the federal estate tax marital deduction. For 2016, a family or credit shelter trust can cover the first $5.45 million of an estate for tax purposes. The rest can be tax-deferred under a marital trust. Once the benefitted spouse passes away, the money in the marital trust is taxable. However, using the marital trust allows your spouse to draw monetary benefit from the marital trust during their lifetime.
While it appears as though a marital trust limits the amount of support a surviving spouse might receive, that is not really the case. A marital trust is used in conjunction with a family trust, and the surviving spouse also benefits from the family trust. In a blended family, a marital trust can be utilized to provide separate streams of support for your spouse, and children from a previous relationship. Additionally, utilizing other tax-saving tools like a qualified personal residence trust can be beneficial. A qualified personal residence trust allows you to place a residence in trust for a set number of years and then transfer the residence without federal taxes. The key is that the residence counts against the federal gift tax exemption – currently $5.45 million. Again, this may allow you to provide for a spouse while giving your children preferential tax treatment upon your death.
Establishing a trust requires a deep understanding of how to properly set up your estate plan. When combined with complex tax implications, skilled legal counsel is essential when considering marital trusts or qualified personal residence trusts. Our Palm Beach estate planning attorneys work with you one-on-one to determine if a marital trust is right for you and your family. We provide an unparalleled level of guidance and personal attention.
When you have estate planning needs, including establishing trusts and identifying optimum tax advantages, the Palm Beach estate planning attorneys at Kitroser & Associates are your strongest advocates. With more than three decades of experience, our attorneys have established a reputation as leading estate planning counsel in Palm Beach and throughout South Florida. Contact us today to schedule a free consultation at 561-721-0600 or contact us online.
The North Palm Beach Estate Planning Lawyers of Kitroser & Associates, welcome clients from the cities of West Palm Beach, Stuart, Palm Beach Gardens, Palm Beach, Jupiter, Tequesta, Juno Beach, Singer Island, Lake Park, Hobe Sound, Royal Palm Beach, Wellington, Lake Worth, as well as all of Palm Beach County, Martin County and South Florida.
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