|Posted by Ron Koehler on November 16, 2017 at 6:00 PM|
Sometimes I get a call from a new client, who years ago purchased a Revocable Living Trust, but can't get a hold of the attorney who prepared it, to review and make any necessary changes. It is a good idea to have your trust reviewed, to make sure it will accomplish what you want, and to make sure that it won't leave undesirable results. An example of undesirable results is the situation where an AB trust was created back when the federal estate tax laws were very different. Twenty years ago, in 1997, the exemption amount was only $600,000, and many AB trusts were created for couples to take advantage of the tax exemption for a surviving spouse to save money on estate taxes. This was done by providing that, upon the death of either the husband or wife, the trust would be split into a family trust (trust B) for the children in the exemption amount, and a marital trust (trust A) for the surviving spouse for the amount in excess of the exemption amount. But since then, the exempt amount on federal estate taxes has gone to $5,490,000. This means that, if you don't modify your trust, many surviving spouses are going to find out that their marital trust has no assets, because all the assets go to the family trust. The solution is to amend the trust, but that must be done before the husband or wife dies, since often the trust becomes irrevocable at that time.