QUESTION
My husband and I, who live in the state of Pa, have established a revocable trust, using exclusively his SS# as our ''tax number'' for each asset
Asked on Aug 25th, 2011 on Trusts and Estates - Pennsylvania
More details to this question:
funded into the trust. My mother, an Ohio resident, said that if we do not have an ''AB'' trust,i.e., my SS# also included in the trust, and ( therefore?) all assets within the trust ''equally divided'' /''half&half, we will have ''undue'' taxation problems. We contacted the lawyer who prepared our trust in Pittsburgh who said an AB trust is only ''applicable'' for estates of $5 million +. My mother intends to ''gift'' to me annually to pay down her estate, which is currently $1 to $2 million. She ia ADAMANT that our attorney has not prepared us correctly , and because we don''t have an ''AB'' trust, and without my ss# on the ''funded assets'', we actually don''t really have a trust at all. She says we should ''get a lawyer who ''knows how to prepare a trust correctly''. Our lawyer ''specializes'' ''elder law and estates, has written ''books'' , and is a law professor . Are we ''protected''?
1 ANSWER
Your attorney is referring to the $5 million exemption in the current "new" federal estate tax law, which also provides for "portability" where the second spouse to die can take advantage of the first spouse's exemption even if the assets are in his or her name. However, aspects of this law including the $5 million exemption sunset in two years; also although I don't know the PA estate tax exemption, you might end up in a state that has a smaller exemption (for example NY has only a $1 million estate tax exemption). You might want to ask your attorney to review your plan and consider two trusts or an AB trust in light of the possible change in the law and the various state estate tax exemptions.
Answered on Aug 25th, 2011 at 2:23 PM