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Survivor’s Trust, Decedent’s Trust, and a Marital Trust – Do You Really Need All Three?

We often encounter married clients who have revocable trusts prepared years ago which mandate creation of multiple trusts at the death of the first spouse (Decedent’s, Marital and Survivor’s Trusts). Prior to 2011, this set up was necessary to protect the deceased spouse’s federal estate tax exemption. However, since 2011 an individual’s federal estate tax exemption is portable or may be transferred at death to his or her spouse. Thus, it is no longer necessary to create multiple trusts at the first death.

 

Creation of multiple trusts creates administrative burdens and costs for the surviving spouse. Now that the federal estate tax exemption is portable, couples may by amending their trust elect to pass their entire estate to the surviving spouse in revocable trust format without jeopardizing the deceased spouse’s estate tax exemption.

 

Couples with estate plans prepared prior to 2011 should consult their counsel to determine whether an amendment to the trust is in their best interest. If they do not amend their trust and a spouse dies, then it is likely that multiple trusts will have to be created and maintained for the life of the surviving spouse. This will create additional expense and inconvenience for the surviving spouse.

 

It is important for you to revisit your estate plan to confirm that it complies with present law and sets forth your precise wishes. Here at Chauvel & Glatt, we will review your estate plan to explain the terms to you and assist you in making any necessary changes so your trust. To learn how our attorneys can assist you with your estate planning or other legal needs, contact us today.

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