Estate Planning

What Is It? A revocable living trust is a legal entity created by a person, the grantor, to receive assets that the trustee will manage and ultimately distribute according to the grantor’s wishes. Because the trust is revocable, the grantor can alter, amend or revoke it at any time during his or her lifetime. But

What Are Transfer Taxes? Estate taxes are levied against an individual’s estate at death. The part of the estate that gets taxed is the part exceeding a specific exempt amount. Also excluded from federal estate taxation are the amounts left to a surviving spouse that qualify for the marital deduction. What’s the Effect of These

What Is a Bypass Trust? A bypass trust is a device used to minimize a married couple’s federal estate taxes. It’s an arrangement that lets both spouses fully utilize their applicable exclusion amounts. How Does It Work? When the first spouse dies, the bypass trust receives that person’s assets up to the amount exempt from

What is the Marital Deduction? The marital deduction allows property to be transferred between spouses—either during life or at death—without triggering either the federal estate tax or the federal gift tax. For the transfer to qualify, certain requirements must be met. One is that property given or left to the spouse can’t be a “terminable

What Is an Irrevocable Life Insurance Trust? An irrevocable trust is a trust in which the grantor gives up all rights in the property transferred to the trust, retaining no ability to revoke, terminate or modify the trust in any material way. When the trust holds a life insurance policy—usually insuring the grantor’s life and/or

What Is It? The gift tax annual exclusion is a planning tool that individuals can use to reduce the size of their gross estates by giving gifts during their lifetime. The amount that may be given free of gift tax to any one person is subject to a limit that is indexed annually for inflation.

What’s Meant by Estate Depletion? The estates people leave for their heirs at death can be depleted by taxes and other expenses that become due at the time of death. Without proper preparation, these costs can take a significant bite out of what’s left to pass on to the heirs. What Are Some of the