• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Nirenstein, Horowitz & Associates P.C.

Estate Planning | Making a Difference One Family at a Time

An Estate Planning Law Firm
Making a Difference One Family at a Time

Call Now: (860) 548-1000

Attend a Complimentary Seminar
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • RSS
  • Twitter
  • YouTube
  • Home
  • Our Firm
    • About Our Firm
    • Careers
    • Client Testimonials
    • Meet Our Team
  • Services
    • Asset Protection & Business Planning
    • Estate And Gift Tax Figures
    • Estate Planning
    • LGBTQ Estate Planning
    • Loss of a Loved One
    • Pet Planning
    • Powers of Attorney
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
  • Elder Law
    • Alzheimer’s Disease
    • Caregiver Information
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
  • Resources
    • Complimentary Estate Planning Worksheet
    • Complimentary Medicaid/Long-Term Care Calculator
    • DocuBank
    • Elder Law Resources
      • Glastonbury Elder Law Resources
    • Estate Planning Articles
    • Estate Planning Checkup
    • Estate Planning Definitions
    • Estate Planning Presentations
    • Estate Planning Seminars
    • Estate Planning Techniques
    • Frequently Asked Questions
      • Asset Protection and Business Planning
      • Elder Law & Medicaid
      • Estate Administration
      • Estate and Gift Tax
      • Estate Planning
      • Frequently Asked Questions for Families Without an Estate Plan
      • Incapacity Planning
      • In-Home Elder Care
      • Irrevocable Trusts
      • LGBTQ Estate Planning
      • Living Trust
      • Medicaid Planning
      • Nursing Home Asset Protection FAQs
      • Probate
      • Probate Avoidance
      • SECURE Act 2.0
      • Trust Administration
      • Wills
    • Newsletters
    • Probate Resources
      • Probate Resources
    • Published Books
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
  • Seminars
  • Communities We Serve
    • Fairfield County
      • Darien
      • Fairfield
      • Stamford
    • Hartford County
      • Avon
      • Hartford
      • Simsbury
      • West Hartford
    • Litchfield County
      • Watertown
    • Middlesex County
      • Middletown
      • Old Saybrook
    • New Haven County
      • Middlebury
      • New Haven
    • New London County
      • Groton
      • Old Lyme
      • Stonington
    • Tolland County
      • Mansfield
    • Windham County
      • Woodstock
  • REVIEW US
  • Blog
  • Contact Us
Home » Estate Planning » Can a Trust Provide Estate Tax Efficiency?

Can a Trust Provide Estate Tax Efficiency?

August 1, 2015 by Barry D. Horowitz, Estate Planning Attorney

Can a Trust Provide Estate Tax Efficiency?Estate tax efficiency is very important for some people. There is an estate tax on the federal level, and it can have a significant impact on your financial legacy.

This tax carries a 40 percent maximum rate, so we are talking about a noticeable bite.

At the time of this writing in 2014, the estate tax exclusion is $5.34 million. The first $5.34 million that you transfer to people other than your spouse can be transferred tax-free.

There is an unlimited marital estate tax deduction. This allows you to leave any amount of money to your spouse free of the estate tax. You would be using a portion of your $5.34 million exclusion to leave tax-free bequests to people other than your spouse.

Trusts and Estate Tax Efficiency

There are different types of trusts that are used in the field of estate planning. Some trusts are useful for people who want to gain estate tax efficiency, and some are not.

Revocable living trusts are very widely utilized by a wide range people. These trusts facilitate asset transfers outside of the legal process of probate. This process can be time-consuming and expensive, so people sometimes take steps to avoid it.

When you have a revocable living trust in place, you can in fact revoke or rescind the trust at any time. If you were to revoke the trust, the assets would once again become your direct personal property.

The person who creates a revocable living trust can actually act as the trustee and the beneficiary, so total control is retained.

Because you do not surrender control of assets that you place into a revocable living trust, this type of trust does not provide estate tax efficiency. Assets that are contained in a revocable living trust would be part of your taxable estate.

In addition to revocable trusts, there are also irrevocable trusts. If you were to create an an irrevocable trust, you would be surrendering incidents of ownership, because you cannot revoke the trust. The assets are owned by the trust.

Because you no longer control the assets in this type of trust, they do provide estate tax efficiency. Generally speaking, assets that have been conveyed into an irrevocable trust would not be looked upon as part of your estate for tax purposes.

Generation-skipping trusts, qualified personal residence trusts, grantor retained annuity trusts, charitable lead trusts, and charitable remainder trusts are some of the irrevocable trusts that are used for estate tax efficiency purposes.

Schedule a Free Consultation

In addition to the federal estate tax, we have a state-level estate tax in the state of Connecticut. The Connecticut estate tax exclusion is just $2 million, so you could be exempt from the federal tax and exposed to the state death tax.

If you would like to discuss tax efficiency strategies with a licensed professional, contact us through this link to schedule a free consultation: Hartford CT Estate Planning.

 

  • Author
  • Recent Posts
Barry D. Horowitz, Estate Planning Attorney
Barry D. Horowitz, Estate Planning Attorney
Founding Partner and President at Nirenstein, Horowitz & Associates PC
Barry D. Horowitz is a founding partner and president of the law firm of Nirenstein, Horowitz & Associates, P.C. He received his diploma from the Loomis Chaffee School and his Bachelor of Arts from Bennington College, where he dual majored in philosophy and music.

Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.

After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.

Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.

Mr. Horowitz was selected for Super Lawyers in 2021.
Barry D. Horowitz, Estate Planning Attorney
Latest posts by Barry D. Horowitz, Estate Planning Attorney (see all)
  • Take Precautions to Protect Your Legacy - September 12, 2023
  • Regular Reviews and Updates of Your Estate Plan Are Essential - August 24, 2023
  • Estate Planning Tips to Help You Protect Your Family - August 8, 2023
Share our Content:

Filed Under: Estate Planning

Other Articles You May Find Useful

estate planning for single seniors
Tackling Unique Estate Planning Challenges for Single Seniors
letter of last instructions
The Last Note: Crafting a Comprehensive Letter of Final Instructions
charitable trusts
Exploring the Tax Benefits of Charitable Trusts
incentive trust
A Trust Can Provide Incentives
estate planning tips
Estate Planning Tips to Help You Protect Your Family
estate planning myths
Debunking 5 Common Estate Planning Myths: Protecting Your Future with Facts

Primary Sidebar

Nirenstein, Horowitz & Associates

Upcoming Seminars

Estate Planning Seminar

Date: October 17

Venue: Canton Community Center, 40 Dyer Avenue, Collinsville, CT, 06019, United States

Estate Planning Seminar

Date: October 18

Venue: Cheshire Public Library, 104 Main Street, Cheshire, CT, 06410, United States

See all Seminars

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

TESTIMONIALS

Blog Subscription

Our blog gives you the most up-to-date estate planning news. Sign up today to receive our regular updates!

  • This field is for validation purposes and should be left unchanged.

WESTPORT OFFICE

8 Wright Street, Suite 107
Westport, CT 06880
Phone: (860) 548-1000
Fax: (860) 761-1070
preserveyourestate_sidbr_map

Somerset Square

200 Glastonbury Boulevard, Suite 202
Glastonbury, CT 06033-4418
Phone: (860) 548-1000
Fax: (860) 761-1070
preserveyourestate_sidbr1_map

Office Hours

Monday8:30 AM - 5:00 PM
Tuesday8:30 AM - 5:00 PM
Wednesday8:30 AM - 5:00 PM
Thursday8:30 AM - 5:00 PM
Friday8:30 AM - 5:00 PM

Footer

footer-logo
  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

© 2023 American Academy of Estate Planning Attorneys, Inc.