Estate Tax Shelter Trusts

If you have a sizeable estate, you may want to utilize estate tax shelter trusts in your estate planning. An estate tax shelter trust enables each individual to utilize his or her exemption amount so that less (or none) of the estate’s value is subject to federal estate taxes. Florida has no separate estate tax. It merely receives a portion of the federal estate tax. There are basically three ways to reduce estate taxes

Estate tax shelter trusts can be written into your Will or your revocable living trust. If in your revocable living trust, then you may achieve the added benefit of avoiding the unnecessary expense of probate.

If you are married, planning is more involved in order to ensure you and your spouse use your estate tax exemptions. A failure to plan to use the first-spouse-to-die’s estate tax exemption may mean estate taxes are paid upon the second spouse’s death.

We have some brief period of certainty for estate tax exemptions through the end of 2012. Each individual has a $5 million exemption. After 2012, we simply do not know.