Will a Living Trust Result in Estate Tax Reduction?
The use of a living trust itself provides no special estate tax savings over disposing of your property by a will. Ads are run in the newspapers almost every day in the United States claiming that a particular form of revocable trust will save taxes when you die. The implication is that the living trust will save more than if you dispose of your assets in another way, such as by will. Those claims are false. Any estate savings achievable with a living trust can be achieved by a will alone. Although your lawyer can incorporate tax-saving measures into your living trust, such as charitable gifts, a marital deduction trust and a credit-shelter trust, these can be included in a will, too. While there are many valid reasons for setting up a living trust, you should not set up a living trust just to save taxes.
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