Federal estate taxes are often a big concern we hear addressed when estate planning. A Living Trust may be a benefit, if federal estate taxes are a concern.
While a Living Trust will not automatically avoid federal estate taxes, when properly drafted, a Living Trust can help with estate taxes, especially for married couples.
It is possible for the Living Trust to provide for the first deceased spouse’s estate tax exclusion amount to be held in what is known as a ByPass Trust, instead of being distributed directly to the surviving spouse. If distributed outright to the surviving spouse, it would be subject to federal estate taxes when the surviving spouse dies.
In addition to a Living Trust, a properly drafted Will can be used to create and fund a ByPass Trust which will hold the deceased spouse’s exclusion amount. Keep in mind though, that a Will is subject to probate, while a Living Trust is not.
Because federal estate taxes are so difficult to understand, it is best to consult with an experienced Ohio estate planning attorney before making any decisions on how best
