Morris Hall, PLLC

Estate Planning Attorneys

MakePayment with multiple options
CALL NOW: 1 (888) 222-1328
  • Home
  • Our Firm
    • About Morris Hall
    • Attorneys
    • Our Team
    • Morris Hall Core Values
    • Communities We Serve
      • Arizona
        • Carefree
        • Flagstaff
        • Mesa
        • Oro Valley
        • Phoenix
        • Prescott
        • Scottsdale
        • Sedona
        • Tucson
    • Career Opportunities
  • Our Services
    • Asset Protection
    • Probate
    • Tax Planning
    • Trusts
    • Trust Administration
    • Wills
  • Resources
    • Blog
    • Do I Need an Estate Plan?
    • Elder Law Reports
    • Elder Law Resources
      • Phoenix Elder Law
      • Tucson Elder Law
    • Estate Planning Problems
    • FAQs
    • Probate Resources
      • Probate
      • Flagstaff Probate
      • Phoenix Probate
      • Sedona Probate
      • Tucson Probate
    • Published Books
      • Don’t Go Broke in a Nursing home
      • Tax Free Money for Long-Term Care!
    • Recent Law Changes and Improvements Affecting Arizona
      • Update My Living Trust
    • Reports
    • Videos
    • What to Do When Death Occurs
      • What Not To Do When Someone Dies
      • Who To Contact After A Loved Ones Death
  • Reviews
    • Testimonials
    • Review Us
  • Locations
  • Events
    • Seminars / Webinars
    • Past Webinar Recordings
  • Contact
    • Consultation Policy
    • Contact Us
    • Discounts

Trusts to Reduce Estate Taxes

How to Use Trusts to Reduce Estate Taxes

Trusts to Reduce Estate Taxes

Many people know that when President Obama signed the American Taxpayer Relief Act on January 2, 2013, the estate tax exemption amount was permanently increased to $5.0 million dollars, indexed for inflation. This new act set the tax rate for an estate over this amount at a staggering 40%, which was much better than a $1.0 million exemption and 55% top rate which we would have had had the law not been changed.

While the increased exemption amount is good news for many families, not everyone is resting easily. Many people believe the exemption amount will be significantly reduced in later years, as President Obama has proposed in the budget he submitted to Congress. What if the estate tax exemption is reduced? Strategies for eliminating or reducing estate taxes will be a priority not only for the wealthy but for anyone who has significant assets. With retirement plans, homes and life insurance assets included in the estate, many beneficiaries could end up paying a significant amount of their inheritance in taxes.

At Morris Hall, PLLC, our lawyers offer a broad range of planning services to minimize or eliminate estate taxes. With devices such as AB and ABC trusts, irrevocable life insurance trusts (ILITs), family limited partnerships (FLPs), grantor retained annuity trusts (GRATs), qualified personal residence trusts (QPRTs) and charitable remainder trusts (CRTs), you can remove assets from the taxable estate.

Planning for the Portability Rules Change

Other changes made by the American Taxpayer Relief Act require new planning strategies. The new law makes permanent a portability feature that allows the exemption to pass from one spouse to the surviving spouse. For example, if the deceased husband didn’t use the $5 million exemption, that exemption goes to the wife. But you have to be careful to rely on this provision for estate tax planning, though, because the portability feature is only available if the surviving spouse takes certain actions immediately after the death of the first spouse. In addition, it is impossible to know if this portability feature will in the law when you or your spouse passes away.

Our lawyers craft AB trusts that will pass the estate plan exemption from the deceased spouse to the surviving spouse even if the portability feature goes away. We also set up ABC trusts, in which the C trust (marital trust) not only reduces estate taxes but also provides additional protection to the spouse. Assets placed in the martial trust, are protected from creditors, long-term care expenses and devastating tax consequences.

When creating an AB or ABC trust, it’s essential to properly set up the distribution formula from the B and C trusts to the surviving spouse. Our attorneys have reviewed hundreds AB and ABC trusts and find that many contain errors that could result in a loss of protection for the surviving spouse.

To talk to a lawyer at our firm about how to minimize estate taxes, contact us to arrange a consultation with an experienced lawyer today. We have offices in Phoenix, Tucson, and communities throughout Arizona.

MH logo

Main Office

7600 N 16th St, Ste 105

Phoenix, AZ 85020

Phone: 602-249-1328

Fax: 602-248-2887

Subscribe to Our Newsletter

For a sample Click Here

Offices

Our law firm proudly serves many areas in Arizona. See all of our locations here.

Our law firm proudly serves the state of Arizona.  See all of our locations here.

Toll Free: 888-222-1328

Mon-Thur: 8:00am – 5:00pm
Fri: 8:00am – 4:00pm

  • Linkedin
  • Twitter
  • Facebook
  • Youtube
  • Instagram

Need an Estate Planning Lawyer in Arizona?

Looking for an estate planning attorney near you? We have office locations in Phoenix, Mesa, Chandler, Scottsdale, West Valley, Carefree, Prescott, Sedona, Flagstaff, Tucson, and Oro Valley in Arizona so please visit us at the location that is closest to you.

  • © 2023 American Academy of Estate Planning Attorneys, Inc All rights reserved.
  • Disclaimer