A Perfectly Good Estate Plan Gone Awry

Estate Planning and Tax Advisor & Alert

 Share  print   Print     Subscribe      Download PDF

PUBLISHED ON: May 1, 2002

The estate plans of the new clients (a husband and wife) seemed to make perfect sense: each will established a credit shelter trust for the other, designed to take advantage of current law, which, in effect, does not tax the first $1,000,000 of property. The balance of each estate (called the “residuary estate”) would pass outright and free of trust to the surviving spouse. When we looked at how their assets were owned, however, it became very clear that, unless changes were made, the tax savings that their attorney had in mind would be impossible, and here is why.