Forbes’ recent article, “Guide To Marital Trusts,” explains multiple advantages to using this tool.
The main benefits are the following:
- You can double your estate tax exemption amount to $24.12 million
- Provide income and financial stability to the surviving spouse
- Keep assets within the family
- Protect assets from creditors and potential new spouses; and
- Provide financial stability to the remaining beneficiaries once the surviving spouse dies.
However, there are also downsides to using a marital trust. Those downsides include:
- Are irrevocable, so once they’re established, it’s extremely hard to dissolve or change them
- Only offer up to $24.12 million in estate tax exemption; and
- Require transferring assets into the trust, which can be a lengthy process.
A marital trust will lay out the grantor (you), the trustee (who will manage the trust) and the beneficiaries.
It is a beneficial estate planning tool that will take care of your surviving spouse after you’ve passed away.
By using this strategic tool, you can essentially double the amount of your estate that won’t be taxed at a federal level.
You can also ensure that your wealth stays within your family by transferring assets into a marital trust.
Reference: Forbes (June 30, 2022) “Guide To Marital Trusts”