The Martin Law Firm, located in Montgomery County, PA, provides estate planning services for individuals, partners, and families, including Wills, Durable Powers of Attorney, Advance Health Care Directives, and Trusts, including Disclaimer Trusts. For over 10 years, Wills and Trusts attorneys at The Martin Law Firm have served the residents of Montgomery County, PA, as well as the surrounding areas of Philadelphia County, Bucks County, Chester County and Delaware County.
Disclaimer Trust for PA Estate Planning
For married couples in PA, federal estate taxes are an important consideration in any estate plan. A careful review of the federal estate tax rate, the amount of the lifetime exemption, and the size of the combined marital assets are all important factors to consider. For example, if your combined marital assets are greater than the lifetime exemption for one spouse, the excess amount could be subject to federal estate tax upon the death of the second spouse.
One method of handling this situation and preserving additional assets is through the use of a Disclaimer Trust as part of a comprehensive PA estate plan. The Disclaimer Trust employs a similar concept as the Credit Shelter Trust, but the Disclaimer Trust provides greater flexibility for a changing tax system.
Proper Pennsylvania estate planning for married couples with sizable estates should always consider tax planning. A Disclaimer Trust allows assets to pass outright to a surviving spouse, but provides the surviving spouse with the ability to disclaim any portion of the marital share into a Credit Shelter Trust to take advantage of some or all of the estate tax exemption of the first spouse to die.
When a married couple in PA utilizes a Disclaimer Trust plan, it is advisable for a surviving spouse to promptly consult with an advisor upon the first spouse’s death to consider whether a disclaimer is necessary. Considerations include the size of the first spouse’s estate, the value of the surviving spouse’s own assets, including survivorship joint property and retirement plans and life insurance received on account of the first spouse’s death, the size of the estate tax exemption in that year, and the financial needs of the surviving spouse, children and grandchildren.
If assets are disclaimed, the assets in the trust are sheltered from federal estate tax by utilizing the first spouse’s exemption, and the assets will eventually pass free of estate tax to descendants at the death of the surviving spouse. It is possible under PA law to disclaim some types of jointly held property as well as life insurance and retirement benefits, permitting such assets to pass to the Credit Shelter Trust instead of the surviving spouse.
Disclaimer Trust Attorneys – Montgomery County, PA
The experienced Disclaimer Trust attorneys at The Martin Law Firm regularly assist married couples with the preparation and implementation of a Disclaimer Trust as part of a comprehensive Pennsylvania estate plan. Our Disclaimer Trust attorneys represent clients in Montgomery County, PA, and the surrounding areas. Contact an experienced Disclaimer Trust attorney at The Martin Law Firm for a free case evaluation at 215-646-3980.