San Jose’s Trust & Estate Planning Experts

How Will the New Tax Plan Affect your A-B Trust?

As you may already know, an A-B trust is a joint trust created by a married couple who, up until recently, had few other options for keeping their combined estate secured from fees. Assets would be placed by each spouse in his or her trust and a beneficiary would be named—which could be anyone except the spouse. Until 2012, this was one of the ways couples could ensure their estate was safe from excessive taxes. Now with the new tax laws, you may actually be leaving money on the table by keeping your A-B trust. At the law office of Diran & Grey, we specialize in estate planning and we can show you how to keep your estate intact for your loved ones, and how to take advantage of the tax code changes so your family has less of a tax burden when the time comes.

The Problems with A-B Trusts

Can you imagine your grieving spouse having to rely on a restrictive amount doled out each month to get by? If you have an A-B trust, this can easily become a reality. If you’re not up to date on the latest risks of A-B trusts, you stand to lose quite a bit financially. Under current tax laws, A-B trusts no longer give you an estate tax advantage and they can risk you losing other major income tax benefits.

Think you’re saving your loved ones from hassle with an A-B trust? Unfortunately, this isn’t the case either. Your surviving beneficiaries will still have to shoulder a significant amount of hassle to take advantage of what you’ve left them—from lifetime restrictions on use and complex tax filings to accountability and other legal rings they’ll have to jump through, and more. There is hope on the horizon, though, through the new portability laws, your spouse will be able to use both of your exemptions and actually benefit from what you’ve left him or her. Find out how by contacting us today!

Simplified Estate Planning Solutions

Under the current tax laws, the surviving spouse can easily use both exemptions of the husband and wife, without needing any sub-trust planning (namely A-B trusts), for up to $10 million or more. This portability of exemptions simplifies estate planning and will give your surviving spouse the financial security he or she needs without having to wade through all the red tape. A-B trusts not only just complicate your spouse’s tax issues, but they can also cause strife within the family—especially if there is a dispute between the beneficiary and your spouse.

Ensure your spouse can avoid the extra heartache and hassle that goes along with A-B trusts. We’ll be happy to answer all of your questions, listen to your needs, and provide a plan of action that will work. We’ve built a reputation in San Jose and throughout California for providing superior estate planning legal guidance and we’ll apprise you of all of your options. Contact our office today to schedule a consultation and find out how we can build a simpler, safer, and more effective estate plan for the ones you love.

Avoid an A-B trust nightmare. Contact Diran & Grey in San Jose today!