If you have an AB living trust find out why it should be amendment to save money:
1. The law used to say you could give away $600,000 without Federal Estate Taxes.
2. That’s why you have an “AB” trust so you could double that amount by preserving the “credit” of the first spouse to die.
3. The problem is this would cause trouble for the surviving spouse because she would have to:
*pay for legal and accounting advice on “splitting” the trust into two parts (this could cost $2,000 to $20,000)
*account to the beneficiaries every year until her death ($100 to 500 per year), and
*file a second tax return every year until her death ($500 to $5,000 per year).
4. THIS WAS THE BEST ADVICE AT THE TIME BUT ALL OF THESE COSTS CAN NOW BE AVOIDED because the law changed so that you can NOW give away $5,490,000 (and growing each year) without paying Federal Estate Taxes.
5. We can AVOID THESE COSTS for the surviving spouse by amending your trust (BUT ONLY WHILE YOU ARE BOTH STILL ALIVE) so that it does not have to be split.
CONCLUSION: IF you expect your estate to be worth less than $5,490,000 (and growing each year) you can amend your AB living trust to avoid splitting the trust which is costly and unnecessary.