The results of the latest election have led some people to believe that the estate tax will soon be a relic of the past. That might turn out to be true, but you will still want to use a trust for your estate planning.
Donald Trump’s victory in the Presidential election has many people expecting that he will carry through on his campaign pledge to eliminate the estate tax. It seems like a good possibility as Republicans are traditionally opposed to the estate tax and will have majorities in both the House of Representatives and the Senate. Some people assume that this will make estate planning simpler as they assume that without an estate tax there is no need to use a trust.
However, as Trust Advisor points out in “Even Without Estate Tax The Right Answer Is Still the Same: Put it All In Trust,” that is not true.
While there are many reasons why a trust will continue to be the best option even if the estate tax is eliminated, there are two reasons that stand out above the others. First, a trust protects against any disabilities that a beneficiary might have. You would not leave a lot of money to someone with special needs or a minor without making sure that someone else could oversee the money.
What people do not consider is that someone who is healthy now could become significantly disabled in the future. A trust helps prepare for that contingency. The other reason is that trusts can protect against future claims to the assets, such as from creditors or ex-spouses.
Even if the estate tax does go away, you will want to hire an estate planning attorney to create a trust for your assets.
Reference: Trust Advisor (Nov. 17, 2016) “Even Without Estate Tax The Right Answer Is Still the Same: Put it All In Trust.”
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