Trusts are often touted as smart estate planning tools, but could they actually reduce taxes for your heirs? In this listener mailbag episode, Frank responds to a question from Roger, who asks whether setting up a trust could help his children save on taxes when inheriting investment accounts.
Frank clarifies common misconceptions about trusts and tax savings. You’ll learn why most family trusts do not provide tax benefits for typical estates and how, in some cases, trusts can even lead to higher taxes due to state-specific rules and IRS tax brackets. The episode also highlights when trusts might make sense for estate planning purposes, especially for families with complex situations or multi-state assets.
Tune in to hear why estate planning isn’t one-size-fits-all, and why good planning starts with talking to the right professionals!
Here’s what we discuss in this episode:
🤔Why many trusts don’t provide tax savings for the average estate
🧾 The current federal estate tax exemption threshold
🏛️ When trusts could be valuable estate planning tools beyond tax savings
⚖️ Working with an advisor AND attorney before making estate planning decisions
0:00 – Intro
1:38 – Estate Tax Thresholds
2:32 – Why Trusts Usually Don’t Save on Taxes
3:31 – Benefits of Trusts
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