. . . “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.
- 6 Important Estate Planning Considerations – Part 4: Beneficiary Designations - June 1, 2018
- Retirement: It’s not Just About the Money - May 1, 2018
- Estate-Tax “Portability” — Oasis or Mirage for Larger Estates? - March 19, 2015