Berman & Asbel, LLP

Why it's a good idea to review trusts

Many Pennsylvanians have established trusts as a part of their overall estate plans. The issue is that some laws have changed substantially in the past few years, making it a good idea to review trusts and to try to alter them to reflect the current legal and financial environment.

A major issue is federal taxes. While the estate tax exemption has dramatically increased, trusts are taxed on their income when the income exceeds $12,300 in a year. The tax rate is set at the top marginal rate of 39.6 percent. A combination of these two factors may mean that the trust is unnecessary. That rate is only assessed upon married couples when they have a combined annual income greater than $464,850. Some estate planners are thus modifying existing trusts in order to tax income from them to either the grantor or to the named beneficiaries to avoid this problem.

Another problem may arise when the trust language mandates the trustee invest in certain types of stocks, especially if those stocks are no longer valued as highly due to technological advances. States are recognizing that people need to have a better ability to alter unwieldy trust language, and many are passing laws allowing corrections to be made to irrevocable trusts.

A person who established a trust a few years ago may want to meet with an estate planning lawyer so that the document can be reviewed. The attorney may be able to make modifications to the trust that helps clients better protect their assets. In some cases, the attorney may recommend getting rid of the trust altogether in favor of a different and more beneficial estate planning tool.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

attorney image