{"id":885,"date":"2012-02-29T15:48:32","date_gmt":"2012-02-29T15:48:32","guid":{"rendered":"http:\/\/blog.topbev.com\/?p=885"},"modified":"2012-02-29T16:04:11","modified_gmt":"2012-02-29T16:04:11","slug":"as-easy-as-a-b-and-c","status":"publish","type":"post","link":"https:\/\/blog.topbev.com\/?p=885","title":{"rendered":"As Easy as A, B, and C"},"content":{"rendered":"

2011 and 2012 are strange years because the US Congress has made an unprecedented move to eliminate Federal Estate taxes for all but the really privileged few. The threshold level of assets in your gross estate must exceed $5,000,000.00, if you pass away in either of those years, before you will need to pay any Federal Estate Taxes. That being the case, at least for Federal Estate tax purposes, the allure of the Revocable Trust, which was a standby for many middle and upper middle class individuals, has begun to lose its allure.<\/p>\n

Briefly described, the Revocable Trust, especially when the person involved took the additional step after signing to put his or her assets into same was a vehicle which gave tax advantages and almost always reduced the expense and frustration of Probate. People used Revocable Trusts to take advantage of the then current Federal Estate tax exemption, which up until 2011 and 2012 was in the $3,000,000 range.<\/p>\n

The post is written to express my view that the news of the death of the Revocable Trust as a valuable Estate Planning tool is extremely premature. I frequently recommend to my clients with estates over $1,000,000 that they consider putting Revocable Trusts into place. These are my reasons:<\/p>\n

    \n
  1. Massachusetts Inheritance Tax starts at $1,000,000. That being said, there is no Inheritance Tax when a husband passes his assets to his wife, or a wife passes her assets to her husband. The tax only impacts people upon the death of the second to die. This follows the pattern utilized in the Federal Estate Tax system exactly. The problem of Massachusetts Inheritance Tax arises upon the death of the surviving spouse. There is no unlimited exemption, and all assets over $1,000,000 will be taxed by Massachusetts. The C Trust capture the credit.<\/li>\n
  2. There is another, more practical advantage to the A, B and C Revocable Trust. The Trust can be used as a vehicle to accept the life insurance proceeds of the person who establishes the Trust. You may wonder why this is advantageous. For one thing, many people with younger children have life insurance for their family. The primary beneficiary is almost always the surviving spouse, and that makes perfect sense. What if a couple with adequate life insurance and small children was on a plane headed for California on September 11, 2011? Both spouses perish, and the young children come into a small fortune at the age of 18. My experience tells me that 18 is too young an age for children to have a lot of money. If the life insurance beneficiary is the Revocable Trust, the surviving spouse still gets use of the insurance proceeds, but the children do not get their principal until they are older and more mature.<\/li>\n<\/ol>\n

    Drafting an A, B, C Trust is not super-complicated or super expensive. If any of the situations I have described to you apply to your situation, speak to your attorney or trusted advisor about setting up the Trust. You will be doing a lot of people whom you love a wonderful service.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    2011 and 2012 are strange years because the US Congress has made an unprecedented move to eliminate Federal Estate taxes for all but the really privileged few<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[4,145,306,1],"tags":[],"class_list":["post-885","post","type-post","status-publish","format-standard","hentry","category-estate-planning","category-health-care-proxyhippa","category-trusts","category-uncategorized"],"jetpack_featured_media_url":"","jetpack-related-posts":[{"id":899,"url":"https:\/\/blog.topbev.com\/?p=899","url_meta":{"origin":885,"position":0},"title":"Should I draft a Will or should I be placing my assets in a Trust?","date":"March 9, 2012","format":false,"excerpt":"When it comes time for you to devise your assets, you may be asking yourself, \"Should I draft a Will or should I be placing my assets in a Trust?\" A Trust in most instances does not replace a Will. An effective Estate Plan requires a Will. Whether there is\u2026","rel":"","context":"In "Estate Planning"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":37472,"url":"https:\/\/blog.topbev.com\/?p=37472","url_meta":{"origin":885,"position":1},"title":"Your trust might be OK after all","date":"March 4, 2021","format":false,"excerpt":"There is a constant battle between Medicaid applicants and MassHealth that is \u201cDavid-and-Goliath-Like\u201d. The applicant wants to minimize the amount of assets included in their application so they can qualify for Medicaid Assistance and have their long-term care paid for by the government and MassHealth wants to include as many\u2026","rel":"","context":"In "Estate Planning"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/blog.topbev.com\/wp-content\/uploads\/2021\/03\/State-House.jpg?fit=500%2C326&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":37401,"url":"https:\/\/blog.topbev.com\/?p=37401","url_meta":{"origin":885,"position":2},"title":"Homestead Protection for Trusts","date":"July 10, 2017","format":false,"excerpt":"A common misconception regarding a Revocable Trust, however, is that they have some ability to protect your assets from creditors.","rel":"","context":"In "Home Ownership"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":165,"url":"https:\/\/blog.topbev.com\/?p=165","url_meta":{"origin":885,"position":3},"title":"Where There’s No Will, There’s No Way","date":"June 24, 2010","format":false,"excerpt":"There always seems to be an excuse why we cannot sit down, organize our priorities, settle on the right set of fiduciaries and get our estate plans in order.\u00a0 What most people do not seem to realize, however, is that permitting the state to use its formulae to settle your\u2026","rel":"","context":"In "Estate Planning"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3745,"url":"https:\/\/blog.topbev.com\/?p=3745","url_meta":{"origin":885,"position":4},"title":"Estate Planning Essentials: Your Age Doesn\u2019t Matter","date":"December 9, 2014","format":false,"excerpt":"The current pace of our lives makes finding time to develop an Estate Plan more and more difficult.","rel":"","context":"In "Estate Planning"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":28355,"url":"https:\/\/blog.topbev.com\/?p=28355","url_meta":{"origin":885,"position":5},"title":"Tax Time Considerations: Estate Plan? Yes","date":"March 18, 2015","format":false,"excerpt":"This is the time of the year when all of us have no choice but to pour through our bank statements, credit card statements, checks and acknowledgments from charities regarding contributions. ... While you are going through this data-producing exercise, you might want to consider your Will, and other elements\u2026","rel":"","context":"In "Estate Planning"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/885","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=885"}],"version-history":[{"count":2,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/885\/revisions"}],"predecessor-version":[{"id":891,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=\/wp\/v2\/posts\/885\/revisions\/891"}],"wp:attachment":[{"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.topbev.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}