DEAR TRUST OFFICER: Now that the federal estate tax exemption is over $10 million, do I still need a marital deduction trust in my will for my wife?
— CONCERNED HUSBAND
DEAR CONCERNED HUSBAND:
Most likely, yes. If your current will includes a trust for a surviving spouse, you probably will want to keep it.
A trust for a surviving spouse provides important asset management benefits that can be vitally important to a person who is entering widowhood. For most affluent families, a marital trust is the way to go.
Blended families are a special case for which provision may be made for a spouse and children from an earlier marriage. The tool is called the Qualified Terminable Interest Property Trust, or QTIP trust. Even if the marital deduction allowed for the QTIP trust is not needed, securing the inheritance for all beneficiaries may be an important enough consideration to employ the trust in wealth management.
If you live in one of the states that still imposes an estate or inheritance tax, you may want a marital deduction trust even if the estate isn’t large enough to incur a federal estate tax.
Finally, keep in mind that the larger exemption expires after 2025.
If you are married and don’t yet have a will, make an appointment to see an estate planning attorney soon. Your spouse will thank you for it. We are happy to make a referral for an estate planning attorney, if you would like one.
Do you have a question concerning wealth management or trusts? Send your inquiry to Dan Brogren at firstname.lastname@example.org.