Barron’s on Why You Should Gift Now

Great article from Barron’s explaining the lifetime bypass trust and how couples can gift over $10,000,000 to each other (although most gift much less) and avoid estate tax if they act by December 31.

For married couples, a popular strategy is for each spouse to create a trust that will ultimately provide for heirs, but that also names the other spouse as a beneficiary. The advantages are clear: Couples can move as much as $10.24 million out of their combined estate, while retaining rights to draw income if they need to. The one hurdle is that the Internal Revenue Service could void your careful planning if you and your spouse create trusts that are too similar. This poses particular problems for procrastinators, since creating the two trusts in rapid succession heightens the risk of raising IRS eyebrows. “The less time you have, the more conservative you need to be about making them very, very different,” says Diana Zeydel, national chair of the trusts and estates department of Greenberg Traurig in Miami.

 

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