How is a living trust viewed for estate tax purposes?
A living trust is also disregarded for estate tax purposes. Just because assets held in trust avoid probate does not mean they avoid estate taxes. The assets of your living trust will be included in your estate for the purpose of determining if any estate taxes are owed. It is possible for a pair of living trusts to be set up to minimize estate taxes for married couples, but this makes for a highly complex and technical living trust agreement which is only required for people having an estate in excess of the federal unified credit against estate taxes. The amount of this credit is $2,000,000 in 2007 and 2008, and $3,500,000 in 2009. The living trust agreement we provide does not include any estate tax planning, so it is not designed for people who have estates larger than the credit against estate taxes.
