The Pros And Cons Of An A/B Trust

This article discusses the new estate tax law and why it is important for people to keep updating their estate plans.  It explains how people have used the A/B Trust (also known as a spousal or family trust) to avoid or reduce estate tax liabilities.  There are also some downsides to these family trusts.  Most people do not have to worry about the estate tax because of the high tax exemption threshold of $5.45 million.  There are many inconveniences of setting up trusts and the incentive of avoiding estate taxes only exists for a small portion of society.  There are also the pains of capital gains tax that people would have to deal with when setting up an A/B Trust.  It is important for people to update their estate plans if they will be impacted by the changes in the law that this article discusses. 

See Arie Korving, Why It’s So Important to Update Your Estate Plan, Investopedia, May 12, 2016.