How do we avoid taxes during a trust administration?
Now “avoid taxes” is a bit of an aggressive term, so why don’t we say, “How do we make it as tax advantaged as possible?”. That sounds a little bit more legal now at the outset.
This is an important reason why having a San Diego estate planning attorney help you through the trust administration process is very important. Whether we’re dealing with the passing of a first spouse or the passing of a final person to create a trust, it’s important that the trustee has some professional guidance from an estate planning attorney in San Diego to make sure things are done in the most tax efficient way possible.
Now, depending on the size of the person’s estate and the tax climate that we’re in at the time, there may be different exemption allocations. We can make one way or another to perhaps gain a tax benefit. Now, candidly in our current tax environment, this won’t apply to very many people other than those that are in a very high net worth bracket. However, if we find ourselves in a more aggressive tax climate, say like the early 2000s, having the proper tax planning put into the estate planning documents ahead of time and then carried out properly during the trust administration process will be very important to just about every family.
The one thing that we see that applies even in today’s climate, and that we consistently see botched, has to do with optimizing property taxes. Even in what most people call a “simple estate” just the home going to the kids there’s a multitude of ways that we can mess up that transfer and have the kids unnecessarily reassessed for property taxes. Unfortunately, once you make the mistake during that process, you can’t go back. You get one shot at doing it right so if you’re a successor trustee, and you’re wondering if you are setting everything up in the most tax advantage way possible, whether you’re in the middle of the process or just getting started, we always encourage you to sit down with a San Diego estate planning attorney and make sure that every step you’re taking is is done with the with taxes and tax planning.
If you have questions around what your step should be as a successor trustee, whether it has to do with taxes or just the process in general. Always feel free to get in touch with our estate planning attorneys in San Diego by giving us a call, send us an email, send us a text, we’re here and we’re always happy to answer any questions.
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