Updating estate documents, the bypass trust

Some Florida residents might regard estate planning as a one-time thing that they don’t have to think about again. However, there are multiple reasons that people may need to update their wills. Common reasons include major life changes like divorce or new members joining the family. Changes are also needed if a beneficiary predeceases the testator.

Many people name their spouses as heirs followed by children and grandchildren. However, testators could also choose to leave an estate to charity. The way one wants assets to be divided may change, which would require updating a will.

Like with wills, trust reviews may be necessary as well. For example, those that do not update their estate planning documents could still have a bypass trust even though one might no longer be needed. During the late 1990’s, some married couples used bypass trusts to avoid or lower large federal estate taxes. The tax exemption amount was around $675,000 at this time, so those with a larger estate value could have an estate tax rate of 50 percent. The bypass trust is no longer needed in many cases as the current exemption amount is now $5.45 million or $10.9 million for married couples.

Finding ways to use tax laws to one’s advantage and ensure that heirs get the most benefit from one’s estate can be a large part of estate planning. Putting assets in a trust instead of a will could help, and an estate planning and administration attorney can often make other suggestions as well.