Trusts are used for various financial reasons and can be created for both personal and business purposes. There are living trusts and testamentary trusts, revocable trusts and irrevocable trusts. They can be helpful for asset protection, tax savings, probate avoidance, etc. For each trust, there is a trustee who is designated to manage and safeguard assets for the beneficiary of the trust. The trustee must act in the beneficiary’s best interest. All trusts are considered a legal document and therefore, should be monitored and reviewed as the law is continuously changing. Because trust laws are often changing, it is important to have your trust reviewed to make sure that the wording is still relevant and that the trust is designed in the most optimal way.
An article on Forbes.com notes that one change is within income tax laws, which have changed significantly over the years: trusts are potentially paying higher taxes than individuals. In 2016, a trust with a gross adjusted income exceeding $12,300 falls into the top marginal tax bracket. A married couple, on the other hand, does not enter the top tax bracket until their adjusted income exceeds $464,850. This is a critical factor to consider, and a knowledgeable estate planning lawyer can design or perhaps change the trust to accommodate tax laws in the most optimal way. Forbes also mentions how the estate tax thresholds have increased significantly in New York thereby possibly reducing the need for estate tax planning. Meeting with an expert to review your trust or create a new trust may save you tax dollars in the future.
In addition, state legislators and courts are recognizing that the ever changing laws are impacting previously created trusts and are therefore allowing steps to be taken to make it easier to fix and redeem older ones. If you have any questions or concerns about your existing trust or wish to talk about adding a trust to your estate plan, please do not hesitate to contact a Long Island estate and trust administration attorney at Tully Law, P.C.