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Is my existing Trust too complicated?

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dsttexas

Junior Member
What is the name of your state (only U.S. law)? Texas

Our Family Trust was setup back when Estate Taxes were quite different (2001), and expectations of future growth were exaggerated. Upon the 1st death it splits the deceased's share into two trusts - a Tax Shelter Trust up to the current IRS limits, and a Marital Deduction Trust for the remainder. The survivor's share goes into a Survivor Grantor's Trust. Currently the entire joint estate, including real estate titled to the Trust, is about $2 million, well below the current $5 million+ individual exemption. That does not include IRA's that will pass outside the Trust directly to named beneficiaries. So it would appear to be an unwieldly and unnecessary structure for our current situation and Estate Tax laws. I have no idea how to split a single piece of real estate across multiple trusts.

Is there a simpler structure that just leaves everything in the one Family Trust, to be managed by the surviving grantor? Other than for probate avoidance purposes, we may not even need a Trust structure of any kind?
 


tranquility

Senior Member
What is the name of your state (only U.S. law)? Texas

Our Family Trust was setup back when Estate Taxes were quite different (2001), and expectations of future growth were exaggerated. Upon the 1st death it splits the deceased's share into two trusts - a Tax Shelter Trust up to the current IRS limits, and a Marital Deduction Trust for the remainder. The survivor's share goes into a Survivor Grantor's Trust. Currently the entire joint estate, including real estate titled to the Trust, is about $2 million, well below the current $5 million+ individual exemption. That does not include IRA's that will pass outside the Trust directly to named beneficiaries. So it would appear to be an unwieldly and unnecessary structure for our current situation and Estate Tax laws. I have no idea how to split a single piece of real estate across multiple trusts.

Is there a simpler structure that just leaves everything in the one Family Trust, to be managed by the surviving grantor? Other than for probate avoidance purposes, we may not even need a Trust structure of any kind?
With portability, there is less need for the more traditional A/B trust. For an estate of your size, even that is not an issue with today's exemption. Many people don't strictly follow the funding of the B trust on the death of the first spouse. There are a ton of unfunded trusts out there. That is not legal and could cause a problem, but...since the beneficiaries are usually the same, no one forces the issue. The main reason (modernly) for the traditional trust plan is to lock in at least some beneficiaries at the death of the first spouse.

See an attorney. There are enough changes in the law to restate, amend or otherwise change your trust structure to make things easier.
 

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