Wills & Trusts - Estate Tax Planning

One of the main reasons that individuals engage in estate planning is to reduce and eliminate the effect of the estate tax or “death tax.” A trust containing exemption equivalent trust language works to preserve each individual’s estate tax exemption so that the estate at the death of the individual doesn’t pay unnecessary taxes to the IRS. The amount of the exemption as this time varies depending on the year in which the individual passes. Failure to preserve the estate tax exemption can be catastrophic in that amounts exceeding the exemption are taxed currently at forty-five (45) percent. Thus, proper utilization of a trust can prevent unnecessary taxes and help individuals make sure that their beneficiaries receive as much of their estate as possible without unwanted waste or loss.