One of the other questions I get asked is whether you can avoid paying any kind of taxes if you have a trust. Well here in Illinois we have an estate tax, basically a tax that’s placed upon the estate of a deceased person that is around the $4 million mark. Federally, we have an estate tax level that’s around the $11 million mark. So what that means is if you’re under those levels, your estate won’t be taxed on those assets. However, if you are over those levels, a trust can help you out with possibly applying spousal exemptions with some tax preparation planning to avoid having to pay large penalties.
In general, though, the mere existence in merely having a revocable living trust doesn’t automatically make it so that you don’t have to pay taxes. You have to look at the size of the estate as you have it now, the size that you think the estate will be years down the road when it’s closer to your time of passing. Again, we can’t know that for sure, but we can take a good guess, and then we have to do some preparation and planning to make sure that everything is accounted for and we can lower your taxes to the minimum possible.
If you have any more questions about living trusts, trusts in general, or just need an estate plan set up, make sure to call me today. Thank you.