by Andrea Rutherford, Esq.
If you have a trust drafted by Dalton & Finegold, YOU ARE OKAY! We anticipated this and our trusts are in compliance with the new IRS ruling. This ruling affects only Irrevocable Trusts – if you have a Bypass Trust or a Revocable Trust that becomes irrevocable when you are deceased, you aren’t affected by this.
Irrevocable Trusts are a terrific way to protect your home from long-term care expenses, such as nursing homes. But they must be carefully drafted. There are two ways to draft this kind of trust.
When we draft Irrevocable Trusts, we help our clients to choose one or the other – the estate tax or the higher capital gains tax. Usually, it’s a simple math calculation to decide which is best.
The new IRS ruling confirms that you have to choose – you can’t claim BOTH the estate tax exemption and the favorable capital gains treatment (and a warning to creative attorneys who are trying to draft trusts that accomplish both!).
If you are worried about your Trust, our attorneys would be happy to review it for you. If you don’t have an Estate Plan yet, call us to schedule a free consultation. The first consultation is always free of charge and our Attorneys are ready to assist you!