I was recently in a conversation over chips and salsa with a financial advisor who asked me about A-B trusts in light of the new interim federal estate tax laws which establish the exemptions for estate and gift taxes at 5 million dollars.
As I shared with him, this is a very tricky question because we don't know what will happen next year as the Federal government has declined to inform the public as to what direction they will go? I attribute this lack of information to the ideological battle that is currently waging in Washington.
In any event, it appears that the A-B trust may become useful for those with moderate to large estates in the near future but we cannot be sure for now. In any event, an A-B trust can be implemented effectively within a joint trust so for those of you with 1-5 million dollar estates who have separate A-B trusts, you might consider speaking with your estate planning attorney about updating your plan.
Until next time.
SJG
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