Annapolis Irrevocable Trusts Lawyers

Avoiding High Taxation Through Irrevocable Trusts

Federal estate taxes today are as high as 45 percent. State estate taxes can also apply. When it comes time for you to transfer your wealth to your loved ones, do you really want Uncle Sam to get nearly half? At the Law Offices of Merrill, Cruttenden & Collinson, P.A., we help people avoid these high taxes by helping them plan gifts and establish irrevocable trusts. We know how to use the law to make sure more of your money goes where you want it to.

Why Gift?

Annual gifting is a good way to transfer family wealth to loved ones. A gift of cash or property made each year which does not exceed the annual exclusion amount (presently $13,000) is a tax free transfer of wealth. A husband and wife can join their annual exclusion gifts to pass greater wealth. In addition to annual exclusion gifts, medical bills and tuition payments paid directly to the provider or school are also an excellent way to transfer wealth.

Making use of one’s lifetime gift exclusion (presently $1,000,000) is also a good way to reduce estate taxes at death. This is usually done when there is a reasonable expectation that the assets you gift will appreciate in value over time. This is because the appreciation on the gifted asset will be excluded from your taxable estate. Gifting can occur simply by the transfer of the asset immediately to the loved one, or it can occur through an irrevocable trust.

What is an Irrevocable Trust?

An irrevocable trust is a type of trust that cannot be amended without the consent of the beneficiary. The trustor or grantor (the person establishing the trust) cannot take anything out of the trust or make any changes. The main advantage of an irrevocable trust is the tax advantage it has over a revocable trust. At the Law Offices of Merrill, Cruttenden & Collinson, we help our clients establish a wide range of irrevocable trusts, including:

• Life insurance trusts: This type of trust transfers ownership of a life insurance policy. It keeps life insurance death benefits from being subject to high estate taxes.
• Qualified personal residence trusts: A tax-efficient way to give a house to your beneficiaries while still retaining the right to live in the house.
• Charitable remainder trusts: This type of trust allows grantors to donate money to a charity after a defined set of years or after they die. But while still alive, the grantor or another beneficiary would generate income from that trust.
• There are also tax benefits from Charitable Lead Trusts, Generation Skipping Trusts, Grantor Retained Annuity Trusts and Unitrusts, and Intentionally Defective Grantor Trusts among others.

Our estate planning attorneys have extensive experience preparing irrevocable trusts as well as wills and revocable trusts. We can help you determine your estate planning needs and take care of all of the required documents and legal details.

If you need assistance setting up a trust fund or any other estate planning goals, we can answer your questions and help you seek results. Please contact us online or by phone at 410.881.0355 to speak with an experienced Maryland lawyer. We offer our estate planning and business law clients free initial consultations.