While it is true that married couples do not need to create a Trust in their Wills to optimize both spouses’ Federal estate exemptions, creating what is often called a “bypass trust” might have its advantages. Whether clients choose to rely on the “portability” of their exemptions or create a bypass trust should depend on their unique individual circumstances. A bypass trust can protect a client’s assets from things like depreciation, claims of creditors, and the uncertainty of possible changes in the circumstances of the surviving spouse. It is important to also consider some of the Cons of a bypass trust like the administrative costs and differing state laws before making a decision.
See Kelley Drye, Your Estate Planning—When Simpler May Not Be Better, Kelley Drye Client Advisory, June 30, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
