Many clients have asked about leaving their assets to a trust for the benefit of their spouse. I tell them that trusts for a spouse can be created in a Will or in a Revocable Living Trust.
One example of a trust is a Credit Shelter Trust which allows a married investor to avoid estate taxes when passing assets on to their heirs. Upon the investor’s death, the assets are transferred directly to the beneficiaries. However, the surviving spouse maintains rights to the trust assets and the generated income during his or her lifetime.
Discussing end-of-life decisions is always a difficult time. If you have questions regarding the planning for your future, contact an experienced Riverside Estate Planning attorney who can help you manage your assets today, protect your assets in the event you get sick, and provide for the care of your family after you are gone.
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Leaving your assets to a trust for the benefit of your spouse or children is another option than leaving simply a will. The trust could be created as part of your will.
This type of trust is known as a Credit Shelter Trust. It allows a married investor to avoid estate taxes when passing assets to his or her heirs. Upon the death of the investor, the assets in the trust are transferred to the heirs. A key benefit is that the surviving spouse maintains the right to the trust assets and the income generated. This allows a married couple to double the amount they can leave free of California and Federal estate taxes.
Having assets in a trust can be used to ensure a later inheritance by others even if the surviving spouse remarries. This is extremely important if your current spouse is not the parent of your children.
To learn more about a credit shelter trust, contact an experienced Riverside Estate Planning attorney who can answer all of your questions and advise you of your best options for estate planning.
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When a spouse dies in California without a proper will does the surviving spouse automatically have rights to all assets?”
California law states that the surviving spouse has the right to all of the deceased spouse’s community property unless otherwise stated – unless the spouse specifically leaves something to someone else. This can apply to separate property also.
If you have a question regarding your rights to property after your spouse had died, contact an experienced Riverside Estate Planning attorney who will protect your spousal rights to inheritance.
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A Disclaimer Trust helps to minimize or even eliminate Federal estate taxes for a married couple.
When a spouse dies, the surviving spouse has the option of disclaiming all or part of the estate of that person. The disclaimed assets are transferred to the Disclaimer Trust.
Therefore, these assets will not be included in the estate of the surviving spouse when he or she dies.
Federal law makes the exclusion amount for estate taxes to be $5 million. That amount is due to expire at the end of 2012. If an extension is not set, the amount will go back to $1 million.
If you are interested in creating a Disclaimer Trust and want to discuss the pros and cons, contact an experienced Riverside Estate Planning attorney to learn more about how it will affect you and your family.
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A QTIP Trust makes the surviving spouse the sole beneficiary of the income in it every year. However, what happens if you have been married previously and have children from that marriage? How can this type of trust benefit your children? How can you make sure your home will go to your children once your present spouse dies? This is known as the Qualified Terminal Interest Property Trust or QTIP. This trust makes your children the ultimate beneficiaries of your home, allowing your present spouse to live in it until his or her death.
Because the QTIP is a trust, it will not have to go through probate at the surviving spouse’s death. Now is the time to take control of your future and the future of your children. Take the time to sit down with an experienced Estate Planning attorney and see what is right for you and your family.
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Many people are not aware that the recent repeal of the federal estate tax requires people to update their wills because if they do not, their spouses may end up with nothing. Most people declare the maximum amount of assets that are not subject to an estate tax (by using a suggested formula) being placed in a trust for their heirs – usually their children. The remaining assets are left to the spouse.
However, beginning this year, there is no limit on assets to pass on to heirs without being subject to federal estate taxes. This allows all assets automatically go into a trust leaving the spouse with nothing.
It is suggested that to avoid potential problems, you should update your will by removing the formulas and using a given dollar amount of the assets. Of course, you can transfer certain assets to your spouse today. In order to keep your best interests in mind, keep an eye on the estate taxes, which change each year. On the other hand, it is wise to consult an experienced Estate Planning Attorney who can advise you of your options.
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