Can my Will take care of estate taxes for me?

The answer to this question is kind of tricky. The bottom line is that a Will without any Trust does not do anything in and of itself to help you avoid taxes. So what can be done with your Will to help ensure taxes are avoided?

  1. If you have a testamentary credit shelter trust within your will, you can use it to avoid taxes up to the amount of your exemption (currently $2 million in Connecticut/$5 million Federal), AND to ensure that your spouse isn't stuck dealing with your tax problem when you pass away.

  2. If you don't have a credit shelter trust in your Will, then you will have to rely on disclaimer law to avoid taxation up to the amount of the exemption. This should never be done without the advice of a qualified attorney, and is in my opinion a very inefficient and potentially dangerous (financially) method for tax planning.

So, for those of you wondering if your Will properly creates a Trust for you in the event that you have (or end up having) a taxable estate, feel free to contact us and we will set up some time to review this with you. Click here for the contact info for a Connecticut Estate Planning Attorney.

Categories: Estate Planning, Taxes, Wills