How can a living trust save on estate taxes?
If you die in 2008 and the net value of your estate (assets less debts) is more than $2 million, federal estate taxes (starting at 45%) must be paid. If you are married, your living trust can include a provision that will let you and your spouse leave up to $3 million estate tax-free to your loved ones, saving $705,000.
If you die in 2002 or 2003 and the net value of your estate (assets less debts) is more than $1,000,000, federal estate taxes (starting at 41%) must be paid. If you are married, your living trust can include a provision that will let you and your spouse leave up to $2 million estate tax-free to your loved ones, saving $435,000.
If you die in 2007 or 2008 and the net value of your estate (assets minus debts) is more than $2 million, federal estate taxes must be paid on the excess at a rate of 45%. If you are married, your living trust can include a provision that will let you and your spouse leave up to $4 million estate tax-free to your loved ones, saving up to $900,000 in taxes.
If you die in 2000 and the net value of your estate is more than $675,000, federal estate taxes (starting at 37%) must be paid. If married, in 2000 your living trust can include a provision that will let you and your spouse leave up to $1,350,000 estate tax-free. The exemption will gradually increase to $1 million by 2006. Family businesses and farms that qualify an get a $1.3 million exemption. Provisions can be inserted in a living trust to allow you to take advantage of those estate tax savings.
If you die in 2007 or 2008 and the net value of your estate (assets less debts) is more than $2,000,000, federal estate taxes (starting at 41%) must be paid. If you are married, your living trust can include a provision that will let you and your spouse leave up to $2 million estate tax-free to your loved ones, saving $435,000.
