The importance of will and trust reviews

A Georgia couple that has a bypass trust in place in order to minimize federal estate taxes may want to revisit their estate plan if there has not been a recent review. In some cases, this type of trust may be in place based on estate planning that took place during a time period that was known for high tax rates and low exemption levels. In the 1990s, only $675,000 per spouse was exempt from the extremely high federal estate tax rate of 50 percent.

Today, there are more generous exemptions available for couples in relation to an estate. Previously, a couple with an estate valued at more than $1.35 million might choose to protect any assets in excess of that amount with the use of a bypass trust, which allowed excess assets to be taxed and transferred into the trust at the time of an individual's death. The assets in the trust would then be considered free of estate tax liabilities. However, the exemptions began to increase in 2001, and now, assets of up to $10.9 million can be passed on by a married couple without being subject to federal estate tax.

A couple failing to review their estate plan consistently through the years could still have provisions in place for a bypass trust. Unfortunately, this is not advantageous for a couple whose assets are far less than the maximum that can be exempted. A review and possible modification could be important for ensuring that current options are used to maximize the value of an estate.

Estate planning attorneys typically recommend that a will be reviewed for possible modification if a major change such as divorce occurs. Additional matters that warrant review include the birth of a new family member.

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