QUESTION
Should a spouse deed assets to a dying spouse in order to put in a trust?
Asked on Apr 21st, 2014 on Trusts and Estates - New Jersey
More details to this question:
My father's wife (who is dying) is telling him to deed all of his assets to her, and then she will put them in a trust to be managed. She has named me executor. This seems odd. I thought that typically a dying spouse is the one to transfer property/assets to the surviving spouse. She is also taking his name off of all polices as beneficiary. She says that she wants me to manage the assets for him. But, why wouldn't he just name the trust for his share of the assets.
1 ANSWER
2 Awards
The answer to this might depend on the size of the estate. In New Jersey there is an estate tax that applies to all estates over the amount of $675,000. However, there is no tax between a husband and wife. So usually one spouse dies, passes assets to the surviving spouse, and when the second spouse dies, the beneficiaries pay tax on whatever is over $675,000. There is a complex way to maximize the estate tax deduction by preserving the deduction of the first spouse, and then receiving two $675,000 deductions instead of just one by using a trust, but I'm not sure that is what is being proposed here.
Answered on Apr 22nd, 2014 at 1:28 PM
Diana L. Anderson, Certified Elder Law Attorney This response is not legal advice and does not establish any form of attorney/client relationship