HOW DOES A LIVING TRUST REDUCE/ELIMINATE ESTATE TAXES?
If the value of your Estate when you die is greater than the amounts shown below for the year of death, Federal Estate taxes will be owed in your Estate (some exceptions), starting at a rate of 37% and going up from that point depending on the total valueof your Estate. Note that an Estate Tax is different from an Income Tax.Even if your Estate now is under those exemption amounts shown below,and if you anticipate that itmay increase beyond this amount, you may wish to consider obtaining a Trust now since there are other advantages to having a Living Trust which may apply to you now. If you die without a trust, you can leave an unlimited amount to your Spouse tax free, and you may be able to escape Federal Estate tax on the first death that way. This is called the Marital Deduction. Upon your Spouse death, the Estate will be entitled to an Estate Exemption (in an amount described hearafter), so the exemption amount will go to your Beneficiarie tax free and the rest will be taxed. But w
