People Are Asking Me . . .

“Now that the government has increased the estate-tax exemption to $5 million, do we still need a Living Trust?” The answer depends on what you want to happen to your estate (house, savings, life insurance money, retirement accounts, investments) if you die unexpectedly.

A mainstream Living Trust can still provide:

  • Protection for some (or possibly all) assets in the event of a lawsuit
  • Safeguards so that children/grandchildren do not inherit too much, too soon
  • Incentives so that a child/grandchild will more fully appreciate the inheritance you leave buying “earning” the right to receive it
  • Protection so that the inheritance doesn’t get tangled up in the child’s/grandchild’s Divorce, Lawsuit, or Creditor Claims
  • Provisions to keep the inheritance of a “special needs” child/grandchild from making him/her ineligible for government benefits such as Social Security disability benefits and Medicaid
  • Protection so that a child/grandchild will not lose his (her) inheritance if he (she) develops gambling or substance abuse addictions
  • Tax planning should the government suddenly take away the $5 million estate-tax exemption it gave you in December

In short, there are a lot of reasons for families and individuals to utilize Living Trusts — as well as other types of estate-planning tools. With the busy holidays behind us, this could be a good time for you to consult with your estate-planning attorney to make sure that all of the things you want are covered in your current estate-planning documents.