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What are the advantages and/or disadvantages of creating the following living trust in the fact setting described below?

San Francisco, CA |

A married couple with an estate valued at approximately $14 million in shared property wants to: avoid probate, leave their estate to their 2 adult children, and minimize paying federal estate taxes. In view of the present estate tax exclusion of $5.34 million, and the marital exclusion, the couple sets up a living trust Husband and wife transfer their property into a shared living trust that upon the death of one spouse, sets aside an amount of the estate precisely equal to the then current federal estate tax exclusion, which is distributed to the 2 children, and the remaining assets remain in the trust. Upon the death of the second spouse, similar distribution terms to the children, with any remaining assets going into an irrevocable trust for the living expenses of the children.

Attorney Answers 3

Posted

Because you have a sizable estate that currently exceeds the Federal estate tax exemption, you should contact a local estate planning attorney to advise you and properly draft a will and trust. This should not be a do it yourself project.

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You should definitely seek out the help of a lawyer. $14 million is too much money to risk in order to save a few dollars.

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Posted

Number 1- hire an attorney because it will be worth the investment. Number 2- what you describe is what any estate planning attorney worth his salt would do in such a situation at a minimum. It's actually pretty basic or what would be done at a comprehensive but minimal level. There are probably some additional things that could be done to accomplish further lowering the estate tax.

This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature.

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