Does a Living Trust Avoid Estate Taxes?

Does a Living Trust Avoid Estate Taxes?
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A living trust does not avoid estate taxes, although certain measures could reduce how much your assets are taxed. The goal of a living trust is to keep your heirs from having to go to probate court, a lengthy process in which your assets are reviewed and distributed. 

However, when married couples are transferring property to one another, they can avoid estate taxes by filing an AB trust (also known as a bypass trust). This allows them to give assets to each other without being subject to gift or estate taxes. You can read more about how Florida calculates estate tax under Florida Statutes § 733.817

Your Inheritance May Not Be Subject to Excessive Estate Taxes

When a person passes away, an estate tax may be imposed, meaning that a portion of the money that is awarded to an heir may be taken out through taxes. Most properties are not subject to estate taxes. 

Whether or not estate taxes apply in your situation largely depends on: 

  • The value of property being handed down 
  • How much money is involved 

The Florida Bar says that if your assets are subject to estate taxes, you can minimize this amount through your living trust. You can work with a lawyer from our firm who can help write your living trust and use language that minimizes estate taxes. 

To consult with an experienced trusts and probate lawyer today, call 855-780-9986

What is a Living Trust?

A living trust is created by its grantor while they are still alive. They can make all sorts of changes before their passing. The living trust becomes active from the moment that it is created, unlike a will that only becomes active after the grantor’s passing. 

A Living Trust Bypasses Probate Court

Nobody wants to go to probate court. This cumbersome, often time-consuming process analyzes the decedent’s debts, resolves disputes over who should get what, and awards property accordingly. 

Between filing fees, legal representation, and other factors, probate court can also be expensive. While people can use the money from their inheritance to pay these costs, this can ultimately take away from the funds they get. 

What Property Can You Include in Your Living Trust?

Many things that you want to bequeath to other people, businesses, and charities after your passing can be included in your living trust. Some examples include: 

  • Personal possessions, like jewelry, artwork, coin collections, and gemstones 
  • Houses and land 
  • Stocks and bonds 
  • Vehicles 
  • Retirement benefits 

You can make changes to your living trust at any time. It only becomes finalized upon your passing. 

How a Lawyer Can Help You with Your Living Trust

Our firm understands what goes into drafting and filing a comprehensive living trust. When you partner with our team, we will first start by: 

Determining the Value of Your Properties and Assets

Before we write your living trust, we will need to examine the value of your assets. This will give you better insight into who should receive what properties. We can do this by: 

  • Looking at your tax returns 
  • Examining any deeds 
  • Analyzing proof of purchase statements 
  • Consulting with real estate experts 

We can also work with stockbrokers to review the cost of any stocks or bonds that you may have. 

Writing Your Living Trust

It will help to have someone put your wishes in writing. They will be able to put this information in the proper format with the correct terminology. 

In this document, you can: 

  • Give possessions and properties to people after your passing
  • Minimize the estate taxes on your assets 
  • List any conditions or give certain instructions 

There are different types of trusts. Some trusts outline what should happen to minor children after their parents’ passing, while others are purely financial in nature. Our team can decide which trust (or trusts) match your situation and fulfill your final wishes. 

Resolving Any Potential Disputes

After your passing, you do not want your friends and family arguing about pieces of property and money. If you anticipate that problems with your trust will arise after your passing, we can address those potential complications.

This can avoid any delays to your beneficiaries getting their benefits. 

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Call Bogin, Munns & Munns to Learn More

While living trusts do not avoid estate taxes, there are still many benefits to having one. Your beneficiaries will not have to go to probate, and writing a living trust gives you the last say over who receives your assets. 

Bogin, Munns & Munns can explain your legal options and help you create a living trust. We can also help you with any other estate planning documents, such as a last will and testament. 

When you contact us for your free call, you can ask us:

  • Whether or not your estate may be affected by estate taxes
  • How we can help you minimize estate taxes through a living trust
  • What you can include in a living trust
  • And more

To learn more, call (407) 578-1334

Call or text 855-780-9986 or submit our Consultation Request form today



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