When considering having a trust prepared, it is wise to be aware of the tax consequences. Tax laws often change, which would mean you may need a new trust drafted each time the tax consequences are changed to effect your estate. California currently has no estate or inheritance tax. Federal taxation rules are currently unstable. In 2012, for example, the Federal exemption on estate, gift, and generation-skipping transfers was increased from 2011 from $5,000,000 to $5,120,000.
In 2013, the tax rules are scheduled to return to the prior rule of 2001, which sets the exemption at $1,000,000. Congress has been reluctant to permanently change the exemption of 2001, and they have resorted to passing only stop-gap measures that make long term estate planning very difficult. Given this environment, it is wise to make sure your trust is reviewed on a yearly basis to determine if any changes are necessary.
For further information regarding estate taxation and more please contact the Family Law Lawyers for Irvine, California at 714-971-8000. Call today for your free 60-minute consultation!