FSP Article 2014 Jan

Estate Plans Reconsidered with New Tax Rates

When avoiding estate taxation as the primary objective of the trust, the trustee with discretionary control over income might not distribute income to a beneficiary if the income was unlikely to be spent. Making distributions to a beneficiary who would keep the income would defeat the purpose of the trust to shelter funds from estate taxation. That dynamic may be altogether changed by the expended estate tax exemption and higher income tax rates. Now it’s often better to distribute income to the trust beneficiary to avoid the greater tax costs incurred when the highest tax bracket applies to the trust.

FSP Article 2014 Jan (Click here to download PDF)