The current Federal Estate Tax exemption equivalent is $2,000,000.00 ($3.5 million after January 1, 2009). Married individuals owning assets that exceed the Federal exemption equivalent should consider use of trust (in a Will or living trust) to shelter the exemption equivalent (“Bypass Trust”) for the benefit of spouse and children. Outright gifts to a spouse are also deductible for Federal Estate tax purposes, but leaving all of one’s estate to a spouse has the result of taxing all assets of the couple in the spouse’s estate. At the spouse’s subsequent death the entire amount over his or her own exemption will be taxed. The first spouse to die would have wasted his or her exemption and possibly subjected the assets to taxation at the death of the second spouse. By use of a Bypass Trust for the surviving spouse the first spouse to die will caused an amount up to the exemption equivalent to avoid tax at the death of the second spouse. The surviving spouse and children enjoy the benefits of the assets in trust during the life of the surviving spouse and the children receive the trust principal without tax at the death of the surviving spouse. Under current law it is possible for married individuals to avoid taxation on $4,000,000.00 ($7,000,000.00 after January 1, 2009).

Thomas E. Raines, PC represents clients throughout the Atlanta metro area: Fulton County, Cobb County, Clayton County, Dekalb County, Forsyth County, and Gwinnett County, including the cities of Norcross, Alpharetta, Roswell, Sandy Springs, Johns Creek, Marietta, Decatur, Lilburn, Lawrenceville, and Cumming. Contact Thomas E. Raines, PC today.