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Five Ways To Use Trusts

11/18/2020 - Investing for Life, Building a Portfolio

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1. Trusts to grow on.

Trusts can provide professional management for assets set aside for young beneficiaries. The management can continue, if desired, even after a beneficiary reaches age 18 or 21.

2. Continuing help for a disabled individual.

With proper planning (qualified legal guidance is a must), a trust can provide extra support and some of life’s comforts without disqualifying a disabled person from receiving government assistance.

3. Marital bequest to a noncitizen spouse.

Anything that a married person leaves directly to his or her spouse will qualify for the estate-tax marital deduction—unless that spouse is not a U.S. citizen. In that event, a special marital trust is required to preserve the marital deduction.

4. Gaining the marital deduction without disinheriting children.

Individuals with children from a prior marriage may qualify assets for the marital deduction by means of a trust that pays lifetime income to the surviving spouse, then passes its assets to the children.

5. True tax savings for the married.

The marital deduction only postpones estate taxation until the death of the surviving spouse. The precise potential for savings depends upon the years of death. For example, through 2025 every individual has $10 million worth of exemption from the federal estate and gift tax (plus inflation adjustments). In 2026 the exemption falls back to $5 million (plus inflation adjustments).

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© 2020 M.A. Co. All rights reserved.
Any developments occurring after February 1, 2020, are not reflected in this article.

Content is for informational purposes only and is not intended to provide legal or financial advice. The views and opinions expressed do not necessarily represent the views and opinions of WesBanco.

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