If AB trust planning isn’t right for us as a married couple, what other estate planning options are available?
The current federal portability provision has facilitated a more simplified approach to trust planning. A couple can protect $10.98 million without using AB trust planning at today’s $5.49 million exemption amount.
Most clients who adopt this simplified approach use a joint trust rather than two separate trusts for each spouse. The advantage is that the entirety of the couple’s assets — after the death of a spouse — will receive a basis adjustment.
Many attorneys draft more flexibility into a trust by using a disclaimer provision for federal tax planning. With a disclaimer trust, the surviving spouse uses all or a portion of the deceased spouse’s estate tax applicable exclusion amount and gets the total of the assets in the trust.