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What are Pros and Cons of a Marital Trust?

What are Pros and Cons of a Marital Trust?
A marital trust is a complex estate planning tool that should be crafted carefully. Because of its tax benefits, you should work closely with an experienced estate planning attorney to ensure that the marital trust is established properly.

Brought to you by Beck, Lenox & Stolzer Estate Planning and Elder Law, Forbes’ recent article, “Guide To Marital Trusts,” explains what are the pros and cons of a marital trust.

The main benefits are the following:

  • You can double your estate tax exemption amount to $24.12 million
  • Provide income and financial stability to the surviving spouse
  • Keep assets within the family
  • Protect assets from creditors and potential new spouses; and
  • Provide financial stability to the remaining beneficiaries once the surviving spouse dies.

However, there are also downsides to using a marital trust. Those downsides include:

  • Are irrevocable, so once they’re established, it’s extremely hard to dissolve or change them
  • Only offer up to $24.12 million in estate tax exemption; and
  • Require transferring assets into the trust, which can be a lengthy process.

A marital trust will lay out the grantor (you), the trustee (who will manage the trust) and the beneficiaries.

A marital trust is a beneficial estate planning tool that will take care of your surviving spouse after you’ve passed away.

By using this strategic tool, you can essentially double the amount of your estate that won’t be taxed at a federal level.

You can also ensure that your wealth stays within your family by transferring assets into a marital trust.

For all your estate planning questions and needs, including the pros and cons of a marital trust, contact our experienced attorneys at Beck, Lenox & Stolzer. A phone conversation with one can be scheduled at no cost here.

Reference: Forbes (June 30, 2022) “Guide To Marital Trusts”

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