With the passage of the American Taxpayer Relief Act of 2012 (“ATRA”) estate tax planning has fundamentally changed for the vast majority of my clients. Thanks to ALTRA, with only a modicum of tax planning, married couples can transfer up to $10.98 million (as of 2017) worth of property upon death without triggering federal wealth transfer taxes. Therefore, most married copies are free to transfer their property to their spouse based on personal preference (and income tax considerations) rather than the avoidance of estate taxes. For the vast majority of couples there are basically two choices for passing the assets to the surviving spouse: (1) by outright gift so that the surviving spouse owns the property free and clear or (2) leaving the property in a trust for the benefit of the surviving spouse. Each has there pros and cons as discussed below.
To learn more about all of your options when it comes to leaving property to your spouse I invite you to schedule your free initial consultation today.
John Thompson is a shareholder with Kennedy Berkley Yarnevich & Williamson, Chartered assisting entrepreneurs, families and farmers in the areas of estate and business planning.